Time to start investing? £50pm

fimonkey

OK, 65 funds came up!! (eek).. so I guess I need to narrow it down a bit.

Investment types I chose shares, bonds and managed (are the latter funds? as in the type of funds I've been talking about)?

Level of risk I selected low to medium.

Investment region. I selected 'any' seeing as I have no knowledge of these. Given the UK volatility, is it good or bad to select Uk only?

Past performance, I selected %0% of funds.. Important.

Am i doinmg this right?

Many thanks again, you're a star!

fimonkey

Sorry for the million questions, am now looking at a list of 26 'funds'... what does 'yield' mean and what does the percent charge discount mean too please?

Also, can anyone answer my quesiton re: trackers Vs funds etc?

thanks

Lokolo

Yeh thats fine.

Ok well ivnestment types. Some funds put money into cash, so they reduce risk rather not in shares. Property, big companies buy property and rent it out or whatever in hope that the value of the property will raise. As with houses for example, house values usually raise, although lately not.

Past performance, ok this is okish to look at. But something you should know, which all investors go by, past performance is not an indication of future performance. So basically a fund could have risen 500% over the past 5 years, doesn't mean it is going to do the same other the next 5.

Ok n ow the funds should have some risk in them, look through the list. The name of the fund usually says what they invest in. This is the most important, the sector they go into. You can usually cut a few out from this.

Did you choose Growth, Income or Both for the first question by the way?

Ignore the percentage charge discount for now. Yeild, if this is an income paying fund (i.e. first question, income) thats the percentage they gave to y ou each year. So you put in £500 or whatever, you get 2% yeild which means you get some money (2% of £500) that year

cheerfulcat

fimonkey wrote: »

What's the difference between a 'fund' and an 'investment trust' or 'tracker fund' please? I was thinking of a 'fund' as that way someone is managing the risk by diversifying the stocks they hold, and I prefer the thought that someone somewhere is on the ball (seeing as I don't have the time or knowledge to be). Is a tracker a similar thing and can I drip feed a tracker?

Hi there,

There are various ways to hold collective investments. Unit trusts and OEICs are collective funds in which you buy units - the unit price is based on the value of the underlying assets, that is, the investments held by the fund manager on your behalf.

As a general rule, the UT/OEIC will have a theme of some sort - it may invest in a certain region, or in a certain style. Many - possibly most - active managers have a benchmark by which they are constrained; this is usually an index. What you can do rather than invest in an actively managed fund which is benchmarked is invest in the index itself. Exchange traded funds are cheap index trackers - more here.

Alternative collective investments are investment trusts - these differ from unit trusts in that they are investment companies, so rather than units you buy shares, and the price is not directly based on the underlying value of investments held. This means that they can trade at a discount or premium.

ITs also differ from UTs in that the fund managers may be allowed to borrow money to invest.

The beauty of ITs in my opinion is that the big global generalist ones can function as an entire portfolio in one share. The Rothschild investment trust, for example, holds unquoted equities, hedge funds, gold, cash...it's very well diversified, and one of my favourite holdings.

sabretoothtigger

You should really be investing this money in a normal regular saver account, they give upto 10% now and thats hard to beat really. While you do that you should decide what you would have invested in, follow its progress and learn about what you are proposing to spend money on

Read this entire site
http://www.finance-glossary.com/terms/bond-yield.htm?ginPtrCode=00000&id=166&PopupMode=false

fimonkey

Wow great advice again. Thanks all.

Sabre, i already hold a regular savings account (Halifax) to which I pay the pamximum each month (£500), this is for the eventual house deposit fund so cannot afford to take any risk in this whatsoever.

The £50 extra is what I'm saving by not drinking so this is what I can afford to 'punt' with, and seeing as I want to learn more about S&S, and keep as much away from the tax man as possible, I want to 'invest' this in an S&S ISA, hence these questions here (with many more to come I'm sure). Defo want to do this myself as much as possible as I find 'doing' is the best way to learn.

Lokolo, I chose Growth, as don't need income at the moment.

sabretoothtigger

Sounds good, is that the 10% one. I used to think growth is best but now I think an income option is good as it encourages you to diversify, take profits and not just hold one fund for too long.

cheerfulcat

Have to agree with sttigger here; if I had to choose between income and growth, I would tend to go for income-oriented funds. The income can be rolled up within the ISA and used to invest elsewhere eventually.

Lokolo

cheerfulcat wrote: »

Have to agree with sttigger here; if I had to choose between income and growth, I would tend to go for income-oriented funds. The income can be rolled up within the ISA and used to invest elsewhere eventually.

But with such little money it would take a longtime before you could then buy into another fund...

Say £1000, yeild of 10%, thats £100 a year. You need at least £1k to invest elsewhere as a one off with HL for example, thats 10 years before you go elsewhere...

Obviously if we talk about £50k+ etc. it makes more sense to..

sabretoothtigger

Should be possible to combine those cash funds with other sources to buy into other sectors.

I just wish I had received a bit more income instead of reinvesting at the top of the market. Its good to get some money back and maintain a constant feedback on your investments and actively decide where that money should go next rather then leaving it on auto. You could just decide anyway to put it right back in