I have some cash on which I am not currently earning any interest, and with savings rates as low as they currently are, I am thinking about investing in the stock market to try and make the most of the money that I currently have available.

I don't know enough about stocks & shares/ market trends, etc to be able to invest in individual companies for myself, and so I was thinking about opening a stocks & shares ISA (for example, with Hargreaves Lansdown).

I am currently paying into a HTB ISA, so cannot pay into any other Cash ISAs this tax year, although, even if I wanted to, the rates are generally pretty poor.

What I am wondering is- is it better to invest in a stocks & shares ISA with a lump sum (for example, say, £5k), or to drip feed in a certain amount every month...? Are there particular reasons for/ against investing all at once, or a bit each month? What are the advantages/ disadvantages of either approach?

My investment goal (if you can call it that) is to save towards a deposit for a house- I currently live in rented accommodation, and am self-employed, doing contract work for a client, so I don't have a specific timeline in sight, given that my situation is somewhat less stable/ certain than it could be... but ideally, I would like to be in the position to be able to buy a house within the next five years or so.

I appreciate that I will probably need a much larger deposit for a mortgage if I was to take one out while self-employed, but I don't envisage being self-employed for the rest of my life... I would be happy to consider going permanent again when my current contract ends- it will just depend on what opportunities are out there.

I have done some light research into investment, and what I've read appears to indicate that it is generally 'safer' to 'spread' your investments to minimise risk- which, as I understand, generally means investing in a wide range of stocks/ shares, and not concentrating all of your investments in a particular market/ company/ industry. Does spreading your investment over time also help to minimise risk/ increase your odds of achieving a positive return?

Given that this will be my first time investing in the stock market, I would say that I will be looking to use a more 'cautious' approach- does that affect what would be best for me to do?

  • When do you think you will need the money? A general rule of thumb is that if you need the money in less than 5 years, do not put it into the market as the market could be severely down when you need it. – zeta-band Dec 29 '16 at 22:30
  • It's difficult to say when I think I'll need it... my current contract with my client is set to run until April/ May- when I expect to complete the work I'm doing for them, and there is the possibility that they may have more work then, after this task is finished, but there's no guarantee. I would guess that I might need the money in about three and a half years- by that point I will have maxed out my HTB ISA, so it will be worth cashing in on that then. But if I was to be offered a permanent job tomorrow, I would consider it... in which case, I would then potentially be looking for a house.. – Noble-Surfer Dec 29 '16 at 23:08

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