What are the investment options for young graduates in the first 2-3 years after graduation?

This question and answer originally appeared at Quora.

I’d firstly second the answer Solanki provided to you.

That would be a good first step – clarify your goals an what you wish to achieve and when etc., what are your milestones, how long you can put money aside for.

For long-term money – anything over 10 years you should invest into the stockmarket in a diversified range of companies. I feel you should take the time to just learn about investing before doing any active investing (you won’t get the answers from just one book – read many over a course of a year or so). In the meantime invest into a all market tracker – I’d suggest something like the FTSE All World Index (and you may well come to the conclusion to invest with a passive approach at all times).

Once you have built up some knowledge you will begin to understand what investment style suits your personality, what risks you would be comfortable taking etc.

Then once you begin to invest you may adapt your approach as real life experience is different from books – believe me when I say you will think you’re a genius when your stock purchase rises 30% in 6 months or so, and pig sick when it goes down 6 months or so. Try to ignore this – it’s the value in decades to come that counts.

Hope that helps

This answer first appeared here.

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Mark Underdown

Financial Planner, Small Acorn Money

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