Here’s how a stock market beginner can get started in 2025 with a spare £300!

Entering the stock market does not require investing large sums of money.

Here’s how someone who has never invested before can start buying shares this year, for just £300.

Big and small startups can cost in different ways

Another benefit of starting small is that any mistakes you make will hopefully be less costly if someone is investing thousands of pounds!

But there are also potential drawbacks. For example, some stockbrokers charge small commissions or fees, which can quickly add up to £300.

So I think it makes sense to do some research and compare the different options when choosing a trading account or a Stocks and Shares ISA.

Learning how to invest

Before entering the stock market, it is important to understand how it works.

For example, five years ago, chipmaker Nvidia saw the share price increase by 2,264%. That is a special performance. Can it last?

Past performance is not a guide to what may happen in the future.

Just because the share has done well does not mean that it will continue to do so. But the saying is also true: just because a stock has done well doesn’t mean it will do well in the years to come. Rolls-Royce Stocks have done very well in 2023. They did well again last year.

Therefore, even novice investors need to grasp concepts such as valuation.

Nvidia is very profitable, but its share price is equal to 57 years of the previous year’s earnings per share (this is known as the price-to-earnings ratio).

To me that seems like an expensive price. After all, the use of AI may decline and Nvidia’s competitive advantage may be eroded by increased competition in the field.

Clearly, however, not all investors see things that way, which helps explain the current valuation. Chips are a huge market and the market size is set to grow over time. Nvidia has proprietary technology and a large existing customer base of high-end customers. That could help raise wages in the coming years.

As with any investment case, there are two sides to Nvidia at its current price.

Personally I love business though not valuation, so I have no investment plans.

Each stock market investor needs to make a choice. But I think doing that well involves understanding how the stock market works and aiming to be a good investor from day one!

Finding stocks to buy

The key goal is diversification and even £300 is possible for a new investor to spread the risks.

For example, that might include buying a few stocks or buying an investment trust that itself has a diversified portfolio.

I think it’s also important to set realistic expectations. The stock market can be rewarding – but it also involves managing risk.

Entering in a realistic way that is compatible with one’s budget and capabilities is important if one is serious about trying to build wealth in the long term.