FTSE 100 newbie!

sarahtech

I currently have 10k US$, and possibly more coming in the next few months. (20-30k total) I am willing not to touch the money for up to 3 years.

The plan is to exchange it into GBPs and invest it in my HSBC regular at 8%.

But with those poor foreign exchange rates, I'm afraid I might lose in the end! :eek:

Right now, I exchanged 10K US and got 5K GBP, put the whole sum in HSBC and I'm currently investing 200 per month in HSBC's regular savings account at 8%. But is that the best way?

What's the buzz with ING? Why settle at 4.75% when I can get 8% at HSBC? Also, I hear of people getting 10-20% returns with tracker funds. Is that really possible? I've also always heard good things about the FTSE 100, although I'm clueless as to how to begin. Can I open an account online to invest in the FTSE 100 or should I contact my bank about it?


Any thoughts or help would be appreciated! :beer:

dunstonh

also, I hear of people getting 10-20% returns with tracker funds. Is that really possible?

More than that depending on what you are tracking. Less is some areas as well.

I've also always heard good things about the FTSE 100, although I'm clueless as to how to begin.

The general feeling that the FTSE 100, and therefore a FTSE100 tracker is one of the least attractive UK stockmarket investment sectors at the moment.

Can I open an account online to invest in the FTSE 100

You can if you really want to.

or should I contact my bank about it?

Never seek advice from a bank. Their advisors are tied (some may have a limited multi-tie) and they work with a salesforce mentality. Tied advisors (and multi-tied) are not allowed to give independent advice and cannot recommend investment funds. Only independent finanancial advisors are allowed to recommend investment funds.

Some points you need to consider about investing in stockmarket based funds is how long its going to be there and how much risk you want to take. The higher the risk, the higher the potential for growth but also the higher the potential for loss.

For example, when investing into UK funds, using a scale of 1 to 10 (1 being lowest risk, 10 being highest), you have can UK equity funds ranging from 5 to 10. A UK equity income fund will typically be around 5 (although some move into 6). A tracker will be 7, and smaller company funds moving towards 8 & 9. Specialist UK areas will move towards 10.

There are ample places to purchase online cheaply but they will not give advice. The minute you take advice, the charges go up. You need to decide if you want to go it alone and do it cheap or get advice and pay for it.

Also, you should never invest in just one area. Especially when you are looking at the UK. Many times this has been repeated, so I apologise to regulars.... The UK is the top performing sector about once every 5 to 7 years. So in a 15 year period you may get 2 or 3 years of top performance. Thats not very good if you have all your money invested in a UK fund.

cheerfulcat

Hi, sarahtech,

You could leave your money in US $ and hope for a better exchange rate to materialise but that's a bit of a gamble ( FWIW I think that it's probably going to get worse, from your point of view ). So best to bite the bullet now, perhaps.


The attraction of ING is that they have paid a consistent, comparatively high rate for a long time. You can get 7% - 8% on regular savings but for anyone with a lump sum who doesn't want to faff about the ING account is OK.

Stock market returns over time have been considerably higher than deposit account rates. Of course the stock market is a more volatile place to put your capital. If you are saving regularly, an index tracker is a good beginner's fund; you can monitor its progress easily, because you know what companies it's invested in and because TV, radio and newspapers report FTSE 100 results.

It's easy to invest in funds ( and shares ); just open an account with an online broker. Whatever you do, don't use your bank; they'll have your money off you and into some shoddy bank-type product before you know what's happened!

Cheerfulcat