A Year of Trading 212 | Why Investing During the Lockdown Earned Me More Than Any Bank Could Offer

As we went into lockdown just over a year ago I was thinking of ways to improve my own financial health to reduce worries, and how I could make the money I had go further. At the time I had a traditional savings account and an ISA, but the interest rates were reduced a lot and the money was kind of sitting there not doing much. So I thought about investing in stocks and shares, and I found out about Trading212.

Trading 212 is is an app (although there’s also a desktop version!) which allows you to invest in multiple ways, in a variety of assets and industries. I started writing about my journey of investing small amounts every month last year too. The key selling point to me was that it allows you to buy and sell shares with no fees (except stamp duty reserve tax on UK shares) and it allows you to buy part shares.

Disclaimers

Before I go into all the details, I wanted to disclaim that I’m discussing my personal experience with this and I’m not a financial advisor. I’ve taken time to educate myself about investing, stocks and shares, and Trading 212 itself before I started this journey and even more during. However, trading will always have a risk attached and I can’t advise you as to what you should definitely do with your money. I’ve also budgeted my life to allow me to have the income to invest, and I left myself a safety net of money in my savings account and ISA in case the risk fell through.

Another thing to note, I started during lockdown and during the escalation of the pandemic in the UK and the US. Most of the stocks I invested in are within these two countries, and the prices were much lower during the time due to economic uncertainty. This also meant that the money I invested was money that I probably would have been spending elsewhere if we allowed out the house.

Then lastly, I’ve also used referral links to gain free shares throughout this time. This allowed me to gain approximately £30 worth of shares, without doing much at all. If you would like to start using Trading 212 and would like a free share (worth up to £100 potentially although mine were approx £10) you can use my referral link which allows both of us to receive a share.

All you need to do is sign up to the Invest account and deposit £1, it usually takes about a day for the share to arrive in your account. The money made off the free share is freely available to withdraw into your bank account after 30 days, although all other shares you invest in with your own money can be sold and money withdrawn straight away.

How Much I Earned Through Trading 212 in 1 Year

As of the end of March 2021 I’ve invested £300 in shares on Trading212 and my portfolio is currently worth £445.81. I’ve invested across 27 companies which are within multiple sectors as well as locations to further reduce risk (based on my own research).

The portfolio number also includes reinvested dividends which has been £5.22. To be completely transparent, I’ve also received free stocks from the referral link which has added up to be worth £55.10 when received and these have fluctuated but are mostly positive within my portfolio.

If I was to cash out right now, based on my initial investment I would have a 48.60% increase in my money which is a lot more than the interest rates of any bank here in the UK could offer. When looking at the actual stock increases, my portfolio is 23.73% more than the purchase price for all shares, including the ones I got for free. In terms of just dividends as a “profit” I’ve had an increase of 1.74%, but only if I’d cashed out rather than reinvested these.

Whilst some of the stocks I have invested in have been negative over the year, my portfolio as a whole has always balanced to be more than what I’ve invested. As of writing this, only 3 of the 27 companies I hold shares in are red, with most working well and bouncing back after the heavy decline of most share prices at the start of lockdown. Many of the companies I’ve invested in had slumps during the start of the pandemic, which rose gradually over the year.

Overall, whether you’re focused on total invested versus possible take home, or if you’re only focused on dividends or share increases – the % increase of all of these based on my investment was much higher than the interest rates of UK banks.

Learnings After a Year of Investing

One of the key things for me was to not overly worry or panic if one of the stocks I’d invested in had gone into decline. In general, it was a brief red number and it would start increasing after a few days anyway. Plus with multiple other companies that I bought shares in, my overall portfolio was increasing which was helpful for my own mindset. This also showed me the importance of not putting all my money into one company or even one industry.

Another thing that I started to learn was that I didn’t need to check the app every single day. At the start of the year I was checking multiple times a day for no real reason, and it made me worry if something dipped even a little bit.

Investing works for the long-term not short-term gain, and so you can give it the space it needs – especially since I don’t want to be in this to buy low and sell high as I personally don’t have the time or knowledge to monitor multiple stocks and know when the best times are. By halfway through the year I set up a recurring investment of £25 on the first of the month, jumped onto the app to look through which stocks I wanted to put money in and then mostly just left it alone.

One of the tools that Trading 212 has is it’s “pies” and that you can see the pies other people are choosing to invest in too. These “pies” are a selection of stocks chosen by either yourself or someone else, where you can invest in your money to split it out over multiple companies based on a percentage split. This was really helpful for me when I was looking for stocks which paid out dividends, or within a certain industry I knew I wanted to expand into (like banking and finance!).

I personally didn’t take someone else’s Trading 212 pie to replicate as there’s always a chance for human error, but I did look at them for research for myself and it did help. This was the same way I worked with all my research, using multiple sources throughout to ensure I was as knowledgeable as I could be, without putting all my faith in one other person for advice.

Will I Continue Investing Through Trading 212?

Overall Trading 212 has been super easy to use and to find new stocks to invest in. It’s also been a great way to learn the ropes of investing as it allows you to use small amounts of money and to purchase part-shares. This has meant even though there’s been risk, I’ve never felt like I’d be losing too much if everything went wrong tomorrow which was great.

I’ll probably keep investing the £25 a month that I have scheduled for now. Whilst I could potentially afford more a month I’ve just moved house and want to keep more money free in case I need to purchase more furniture, something breaks unexpectedly, and just general decorating funds. However, if I had money at the end of my budget, I may split it out so more money goes into stocks & shares over my savings accounts.

If you’re interested, I would recommend Trading 212 as an app. Plus, you can gain a free share worth up to £100 by using my referral link. All you need to do is sign up to the Invest account and deposit £1, it usually takes about a day for the share to arrive in your account.

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