Investment Plan

[irmclarke]

Hi,

As a new year resolution I've decided to try and get a little braver about how I save my money. Until now I have just been sticking a few £100 here and there into a cash ISA and have managed to save approx. £2k each year for the last couple of years.

I'm probably going to cash in £5k of ISA to make a payment on my mortgage when I re-negotiate in August.

So ... I'm now thinking I'd like to also save £50 monthly into something and I can't decide between a standard 'high interest' savings account or premium bonds (I have none at the moment).

Aditionally I'm thinking of opening a mini ISA for 'self select' shares of perhaps £1000 spread over 2-3 companies. The fees seem a little high when you are talking about a relativly small investment though.

Any thoughts on the above would be much appreciated.

[deemy2004]

Premium bonds looks good, thats £600 over a year , whcih would only give you about £20 from a high interest account anyway.

£1k spread between 3 companies is not going to prove very profitable, unless you find a cairn, i.e. the commission incurred from both dealing and the ISA will be a big % of the gain (if any). Say at £13 dealing thats £26 to buy / sell , ISA charge average £10 for the year on £350 thats over 10%

Best would be to take your time and find one good investment trust and put it all into that, and probably best outside the ISA wrapper.

I'm the process of conducting my end of year review, i.e. selling stocks / trusts that I don't see moving much next year, also looking into some trusts / stocks that look good fundementally and chart wise for 2005, so I'll post a couple in a few days time.

[irmclarke]

Our of interest why do you say 'best outside of the isa wrapper' ? I must admint I know very little about stock market investing.

[deemy2004]

Unless your holding fixed interest stock i.e. Corp Bonds and Gilts, its not going to be of much benefit for the extra charge per year, as highly unlikely at time of selling you will have used your CGT allowance.

Also I would not put more than about 20% of your liquid assets in the stock market, i.e. 80% in 100% safe products such as cash ISA's / Premium bonds and 20% in risky investments such as the stock market.