£100 per month to invest. Where?

Sulli

I guess now might be a good time to start buying shares, which I've never done before, saying as they aren't worth much at present. I reckon I can spare £100 a month.
Is this a good idea, and where should I start?

opinions4u

A low charge tracker fund may be appropriate, within an ISA.

Register with Quidco and visit their link to Legal and General who have a lowish charge option that will spread the risk across the whole of the FTSE.

Is it a good idea? If the market's near its low point, an excellent idea. Just don't know if it is!

If you still have uncertainties, look at good old regular saver accounts such as Halifax (7%) or check out if your current account provider has anything exciting to go at.

Perhaps do £50 in a Regular Saver and £50 in a tracker fund?

jon3001

Sulli wrote: »

I guess now might be a good time to start buying shares, which I've never done before, saying as they aren't worth much at present. I reckon I can spare £100 a month.
Is this a good idea, and where should I start?

Avoid buying shares directly. As you say - you're new to this and the trading costs would really eat into your £100 unless you used Halifax sharebuilder or similar.

I'd second the use of Legal and General. You can use a mix of their index trackers to spread your investments over thousands of companies and many geographic regions to diversify your risk.

http://www.legalandgeneral.com/investments/isas/index-tracking-isa/the-charges.html

• UK Index
• European Index
• US Index
• Japan Index
• Pacific Index

Since you're investing on a monthly basis (rather than a lump sum) you can mitigate some of the risk of any further downturn. You should be looking to invest for at least 5 years.

ebyard

Great info, thanks to all.

I should be getting about £2k soon (back from Icesave, ho ho ho). Any thoughts on putting this into an L&G FTSE all share tracker?

dunstonh

Before you even consider what funds, you need to consider your risk profile. Its no point picking a medium/high risk tracker fund (potential of 50% losses in 12 months) when your profile is one closer to cautious or medium risk.

jon3001

dunstonh wrote: »

Before you even consider what funds, you need to consider your risk profile. Its no point picking a medium/high risk tracker fund (potential of 50% losses in 12 months) when your profile is one closer to cautious or medium risk.

Not just potential.

From William Bernstein's "Intellligent Asset Allocater":

I can tolerate losing X% of my portfolio in the course of earning higher returns.
Recommended percent (Y%) of portfolio invested in stocks

[B]X%    Y%[/B]
35    80
30    70
25    60
20    50
15    40
10    30
5     20
0     10

Stick the remainer in bonds:

Fixed Interest Trust
http://www.legalandgeneral.com/investments/isas/income-isa/view-all.html

Voila! Risk-adjusted portfolio with domestic and international exposure for £100/month.

Remember to rebalance your portofolio once a year I.e. buy/sell appropriate amounts of each fund to reset your percentages to the same as your monthly targets and risk profile.

If you don't want to build your own portfolio then investigate things like:

• Balanced Managed funds
• Cautious Managed funds
• Multi-manager funds

Pick one or two to stick your £100/month in via a discount broker like http://www.h-l.co.uk/. Hopefully there'd be something suitable in terms of investment spread, good diversification, risk and charges.

Paul_Herring

Sulli wrote: »

I guess now might be a good time to start buying shares, which I've never done before, saying as they aren't worth much at present. I reckon I can spare £100 a month.
Is this a good idea, and where should I start?

What debts do you currently have?

What (cash) savings do you currently have?

Are you saving into any sort of pension at the moment?

Sulli

High risk would be my preference, potential to make some gains on the relatively small amount of £50 per month, and an amount which I won't miss too much.

dunstonh

High risk would mean trackers are below your risk profile as they are medium/high risk (unless you use overseas trackers). high risk also means you start getting into minus 70% potential.