Where do I go to invest?

Question

I have been reading up on investing my spare savings in index funds/bonds and so forth and I am very interested in saving my money for long term use.

But all the sources are not clear on what and where I can exactly go to do this.

Do people use websites? Or can I just walk into my local bank? Do people still use stock brokers?

Will a bank take me (a 20 year old university student with 2000 euro in excess savings) seriously?

Thanks for any help. Preferably European or UK based please as I am not from the US.

Answer 1

Or can I just walk into my local bank?

Yes, you would usually approach your bank. However, you wouldn't just "walk in", you would ask for an appointment with a financial advisor.

Will a bank take me (a 20 year old university student with 2000 euro in excess savings) seriously?

Of course they will. Most people pick their bank at your age and then stick with it for the rest of their life. If they advise you well, then there is a good chance that in 5 years from now you will open a retirement savings account with them and in 10 years from now you will ask them for a real estate loan. So banks are very eager to acquire new customers in your age bracket.

Just make sure they don't try to sell you things you don't actually need. If the banker happens to be a good salesperson and you say yes to everything, you might walk out with a couple insurances and saving contracts and student loans you didn't actually want or need. Don't sign anything yet. Ask to take the information material home with you. Study it, do some Internet research to find out what they are actually offering you and if it's a good deal compared to what other banks offer, talk about it with people around you and ask them what they think about it. If you are totally confused about the implications of a financial product you are being offered, feel free to ask another question here.

Then, when you are sure you know what you are signing and that it is the right thing for you, make another appointment to sign.

Answer 2

The first step of investment is investing in yourself, i.e.curb you urge on getting money back and aware of the cost, cost, cost! Benjamin Graham's book The intelligent investor is a good start. Behavior economics books like Daniel Kahneman Thinking, fast and slow, Richard Thaler Misbehaving will help you avoid many irrational investment pitfalls.

1. Do people use websites? You can hunt around and compare various online website charges and register by submitting signed form and bank accounts. First-time retail-trader is not allowed to trade in the margin and you need to deposit the money. You can use your local bank only if they have a trading house. Stockbrokers are deemed obsolete, though, in the old day, some broker will warn the client about the potential risk for a particular stock. Many online trading tools do provide some sort of investment heuristic and let you define your acceptable portfolio risk level. From there, those tools will warn you when a particular stock is deemed a high risk to your portfolio. As long as you control the cost and targeting the basic long term (using the PE) than speculation(rapid trading), you are safe.

2. Will a bank take me seriously? This has nothing to do with the bank, but the trading house business. The trading house earns a commission from the trade and it is all done through electronic. To them, a retail investor with $2k is no different than one with $100k on hand.