Is there ever a right time to start buying shares?

For some people, there is no time like the present. Others keep putting off getting into the stock market, hoping for better timing, whether in terms of market performance, their own finances, or both.

The reality, though, is that it need not take a lot of money to start investing.

In fact, I think there are some advantages to starting on a small scale.

It can mean moving from dreaming to doing faster, rather than spending a long time saving up funds to invest.

It should also mean that any beginners’ mistakes, although still painful, will at least hopefully be less costly than if bigger sums were involved.

What could someone do with a few hundred pounds?

For example, take someone who has a spare £500.

That would be plenty for them to start buying shares. It is enough for them to diversify across multiple shares, so they do not put all their eggs in one basket.

Still, minimum commissions, fees, account management fees, and the like can soon add up, potentially proportionately taking a much bigger bite out of a £500 portfolio than a far larger one.

It therefore pays to look carefully and compare options closely when choosing the right share-dealing account, Stocks and Shares ISA, or trading app.

Getting into the right way of thinking as an investor

To start buying shares, somebody does not need to know huge amounts about the stock market and how it works.

But they should know enough to be able to try and make smart choices about how to invest.

That can involve skills like valuing shares and thinking about how to construct a well-balanced portfolio.

It also involves more personal questions, such as what their objectives are, how much risk they are willing to tolerate, and what sorts of shares they are looking to own.

One share to consider

One share I think new investors ought to consider is City of London Investment Trust (LSE: CTY).

I do not think this share is likely to absolutely thrash the market in years to come. Then again, I would also be surprised if it far underperformed the market (though that is always a possibility with any share, I ought to note).

The reason for that belief is the nature of this investment trust. It invests in blue-chip UK shares, mainly from the FTSE 100. To some extent it is therefore a loose proxy for the British economy more broadly.

That geographic focus means that there is a risk any weakening in the UK economy could hurt the value of City of London’s portfolio and by extension its own share price.

Over the long run, though, I like the clear blue-chip focus the trust has. Its share price has grown 47% over the past five years.

It also offers a 3.8% dividend yield and has the distinction of having raised its dividend per share annually since 1966.

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Christopher Ruane does not hold any positions in the companies mentioned.