Elliot Winner: Getting Into Stocks & How To Go About It

It seems like every man, woman and their dog are investing in stocks or assets these days. With the rise of the DIY investor, as well as the continuous snowball effect that crypto has had on bright-eyed investors, we wanted to break down the basics on how to get into stock investment and the ways to go about this.

We spoke to one of our financial partners, Elliott Winner of KWM Wealth Ltd., about the rise of stock investment, the type of software available to do this, and how financial advisers and accountants can help out…

In your experience, are more people entering the stocks and shares market over the past year? If so, why is this?

I would say there has definitely been an increase of participants to the financial markets for a number of reasons. People have had more time on their hands, through furlough or working at home and wanted an outlet to try and make some money. The pandemic brought a lot of market volatility with it, and people may have been seeing hospitality and airline companies falling and thought they might have been cheap investments to buy into.

Technology has definitely made it easier to sign up for a stock account and invest cheaply. The rise in popularity of crypto speculators trade on platforms that often cross sell into stock trading. This has also coincided with the rise of chat forums, resulting in armies of micro-investors going up against large institutional hedge fund managers in a kind of generational/social divide. Look at what happened with GameStop in early 2021, with Reddit investors taking on the juggernaut of Wall Street, which was huge, huge news.


What advice would you give to anyone who is looking to enter the stock market? Where do you start?

Don’t just buy because everyone says to, do your own research and due diligence before parting with any of your hard-earned money. Anyone who is looking to invest and comes to me for aid, I usually give them a few pointers to follow:

  • Invest with a plan of action – Ask yourself why you are investing, what do you want to achieve and what is your overall goal?
  • Diversify your investment – Don’t put all your eggs in one basket, i.e. think about different sectors (healthcare, technology) and different geographies (UK, USA, Europe etc.)
  • Be patient and stay committed – It’s easy to short term invest due to an increase in value but this is in fact trading and not investing. You’re in it for the long term so bide your time and trust your gut.
  • Be cool – Try not to panic if the markets become volatile over news/geopolitical events.
  • Understanding – Getting a grasp of exactly what you’re investing in and the strategy behind it is crucial. A good example right now is crypto, where many people are gambling on things they have heard as opposed to what they understand.
  • Systematic investment – By balancing your investment over time you have a higher probability of success.


What apps and software are popular when buying/selling stocks?

Trading 212EtoroIG Markets, and Interactive Investor are all popular platforms and are beneficial for the ‘DIY Investor’. This term is referred to because there is essentially no advice provided when using these platforms and it is therefore down to the investor to do their own due diligence and execution.

As an alternative, there are advisory or discretionary managed versions of the above, where investors would have a more personal, advisory-type relationship with a company. This can come in the form of a stockbroker offering perhaps via their bank, as well as some financial adviser firms also having a share dealing offering, as part of their holistic wealth management service.


Which markets are the most profitable and viable to buy into right now?

This is always the million-dollar question that all investors are trying to tap into. Most of the crypto markets are built on speculation. These are tradable instruments that we would argue are not investments, but speculative markets that are highly volatile with high risk/reward opportunities.

We recently saw in November, the 26th UN Climate Change Conference of the Parties (COP26) held in Glasgow. COP26 is a crucial event for addressing climate change and providing world leaders with a platform to come together to review commitments and strengthen ambition. Despite a short term drop in global emissions during the pandemic, longer-term action is needed to decarbonise the economy and reach net zero. Crucially for investors, this is becoming a key investment risk and opportunity, so the sustainability market is something to definitely keep an eye on.

Since successful vaccine developments were announced last year, stocks in sectors that suffered the most during the early stages of the pandemic have begun to enjoy a resurgence. Since last November, so-called ‘value’ stocks have begun to perform well compared to their ‘growth’ counterparts.

It is important to note that, following market news, geopolitical events, and other ‘noise’ which alters the markets, is a tricky thing to do. Investing for the medium to long-term in a well-diversified portfolio which obtains exposure to all sectors and geographies is a better strategy, as opposed to trying to speculate on the next big growth area. Of course, there are trends around investing more sustainably (e.g. EVs and trading cryptos), however, these should all play their own part in a balanced portfolio.


How can financial advisers and accountants aid users who are buying stocks/shares?

Financial advisers should follow some kind of structure that helps clients decide which stocks to be invested into. For example, start by understanding the client’s situation and focus on their life plans whether this be paying for a wedding, moving home, funding a child’s education, or retirement etc. Once a financial adviser knows what their client is planning for, it gives an idea for the investment time horizon for which an appropriate tax wrapper can be recommended (e.g ISA or pension). The more time the client has until they need the money for the life event they are planning for, generally the more risk they can take on with their money.

This then brings us to discussing the types of stocks/investment funds that will sit inside these tax wrappers. As an example, if somebody wishes to plan for retirement and has 25 years to invest, it may be agreed that the pension is the most appropriate tax wrapper, and because of their time horizon, they can take on more risk by investing into higher growth investment market areas i.e. emerging Markets, Asia Pacific. As an alternative example, if somebody has savings that they want to put towards a house deposit in 2 years’ time, the advice would be not to invest it and instead, to keep it as cash.

Accountants can generally help clients with the part that follows this, but are not qualified to give investment advice, only qualified FA (Financial Advisers) can do this. If there are any capital gains, or dividends that arise from the stocks, or income tax relief that needs to be claimed from investing into a pension, this is where an accountant can provide important advice to aid investments and future plans.

We hope this has outlined to you how to start off getting into stock investment and the parameters around this.  If you require any further information on getting into stocks, or anything accounting related for that matter, please don’t hesitate to get in contact with us at Nordens where one of our trusted advisors would be happy talking you through your query.