Investing money reasonably safely.

tomstickland

I've sorted a mini cash isa and i have a savings account paying 5%, or possibly 5.1% once it's sorted, and also a plan to use a 10% regular savings account which will give me a true rate of 7.5% PA (because I can't move all of the money in in one go).

Anyway, the next logical step is to start paying £100 per month or so into some form of more risky but better paying investment.

I've been reading this site and it looks like a good plan is to take out an investment isa. Unit trust for example. I've read up on the money supermarket route, so I can avoid comission charges. Thing is, there's so many funds to choose from that it all seems a bit scattergun. I want to go reasonably safe and am prepared to accept a lower potential return. I remember when tracker funds were the in thing.

Hmm, maybe I should do some more reading. But am I right in thinking that I can set up an investment ISA and pay in £x per month and this will be invested. Ultimately with so many products to choose from I should just go for a well trusted name and get one with it?

dunstonh

Hmm, maybe I should do some more reading. But am I right in thinking that I can set up an investment ISA and pay in £x per month and this will be invested. Ultimately with so many products to choose from I should just go for a well trusted name and get one with it?

Most funds are risk rated so you can get an overall idea of where they are on the risk scale and whether it is appropriate for you. Things to consider when paying monthly is that you could invest in higher risk than you would normally with lump sums as you are averaging out those ups and downs with each monthly payment and in the early days, you havent exactly got much to lose or gain anyway as it takes many months to build up a decent value. Then as the lump sum value builds up, you can move some of it into lower risk funds to suit your goals/views. Ideally, use multiple funds covering different sectors so you dont put all your eggs into one basket.

Trusted brand named funds can be better choices. Although two things to consider there are that every brand will have its bad performing funds as well and what you may consider a trusted brand name may differ from what an industry professional would consider. For example, you generally wouldnt pick any funds from a bank or building society as they tend to be expensive and poor performing. Are fund manager names like Artemis, Newton, Jupiter, Invesco Perpetual etc known to you as trusted brand names?

tomstickland

Useful info there, thanks. Yes that all makes sense. Since this is an "add on" financial plan and is designed to not be a boring old savings account, I like the idea of spreading the risk and also including some riskier elements in the mix.
Jupiter is name I recognise. And IP, but not the others.