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I am looking to start an investment portfolio with around £1000 of my savings going into the stock market and was wondering how I would go about doing this.

I would like to spread this money across a few moderate to high risk investments with the hope of high returns, I also will be placing around £4000 into an ISA to maximise savings.

My current financial situation is fairly stable, I don't have debt other than a student loan but I also don't own property. I will be setting up a pension plan within a couple of months and my employer will also contribute to that.

My aim is to be able to save using the ISA for the deposit on a house, and if needed have investments I can sell off to contribute to this.

My main questions are:

  1. Is this amount an adequate starting amount to begin investing with?
  2. Which services should I use to start buying shares? (Currently my bank offers this service but I'm willing to use other sources)
  3. I would like to regularly increase the amount invested in shares. Is it worth doing this in say £200 increments?
  4. When buying shares should I focus on say two or three companies, or diversify more?

But any other advice would be appreciated Thanks

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Is this amount an adequate starting amount to begin investing with?

Yes. You can open an account at a brokerage with this amount.

I'm not sure I would invest in individual stocks at this point.

Which services should I use to start buying shares? (Currently my bank offers this service but I'm willing to use other sources)

I can't make UK-specific recommendations, but I'd compare your bank's fees to those of a discount broker -- as well as the variety and level of service available.

I would like to regularly increase the amount invested in shares. Is it worth doing this in say £200 increments?

Take a look at the fees associated with each investment. Divide the fee by the increment to see what percent you'll lose to fees/commissions. Keep in mind that you have to gain more than that percentage to start earning a positive return on your investment.

If you have access to fee-free automatic mutual fund investments, and you can commit to the £200 amount on a regular basis going forward, then this can be a completely free way of making these incremental investments.

See also this answer on dollar cost averaging, and my comment on the other answer on that question for how fees impact returns.

When buying shares should I focus on say two or three companies, or diversify more?

I would diversify into two or three different index funds. Read up on asset allocation. For example, you might invest 1/3 of your balance into S&P 500 index fund, bond index fund, and MSCI EAFE index fund (but that's just a rough example, and not necessarily good for you). I highly recommend "The Intelligent Asset Allocator" by William Bernstein for excellent info on diversification and asset allocation.

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Maybe it is enough on FX market - you can buy indices starting from 1/10 @ some brokers - for example famous S&P500 worth aprox. $2900, so smallest amount would be $290 and @ leverage 20 you need around $15 to open this position (you may have account in GPB and do not care about exchange rates).
Yes it is very dangerous market, but if you buy ETF similar to CFD, think you pay much more on fixed fees or spreads and will not get such good performance (very similar to real index with some shift sometimes).
So in case you know what you are doing and keep in mind you pay or get interests (swaps around 1-5% p.a.) and dividends, you can "play" with ;-)
But do not trade currencies unless you need to fix exchange rate - they are very wild and move quite random.
And be prepared you can lost whole your account...

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