Time to get started on an investment ISA.

tomstickland

I've started to read up on buying a fund via a internet broker. All great stuff, but I've realised that there's a lot of research to be done. So, in the interest of getting on with it, then I'm going to go for a big name tracker fund and get paying monthly amounts into it.
Can you recoommend and further internet sites so I can read up on this. I've looked at Motley Fool so far, plus Martins article on the main MSE site.

al_yrpal

https://www.trustnet.com - useful investment choosing tools, detailed performance data and educational pages
https://www.morningstar.co.uk - lets you 'drill down' into your fund within a portfolio to see what its made of.
https://www.bestinvest.co.uk, a useful brokers site with which recommends how you can build a portfolio of funds, trusts, bonds and cash in line with your desired degree of risk.

Here's some ideas on momentum investing that has proved so profitable for me in 2005.

http://www.moneyshowdigest.com/Digest/article.asp?aid=SFMS-2004-1-1842&iid=SFMS-2004-1&scode=MSDweb&spn=
http://www.soundmindinvesting.com/faq/s_upgrading.htm#whatisthesmi
http://www.thegoodsteward.com/article.php3?articleID=2314
http://www.phptr.com/articles/article.asp?p=374500&seqNum=4&rl=1

The Motley Fool is wholy dedicated to trackers and shares, which are not the only investments out there.

Good Luck!

tomstickland

Right, thanks for that, I'll get cracking.

al_yrpal

http://www.trustnet.com/ut/funds/perf.asp?sort=29&ss=0&txtS=&txtSS=&columns=&page=0&booIMA=1&reg=all&sec=all&ima=ukalltrk&unit=all&type=all

A list of various trackers

EdInvestor

tomstickland wrote:

I've started to read up on buying a fund via a internet broker. All great stuff, but I've realised that there's a lot of research to be done. So, in the interest of getting on with it, then I'm going to go for a big name tracker fund and get paying monthly amounts into it.
Can you recoommend and further internet sites so I can read up on this. I've looked at Motley Fool so far, plus Martins article on the main MSE site.

When choosing a tracker, apart from comparing the charges ( key factor) watch the dividend yield as well.There can be surprisingly big variations. Some companies are making extra profit there at your expense.Trustnet has the figures. All Share trackers seem to be better than FTSE100 trackers.

An alternative way of doing trackers is to by an "I-share" otherwise known as an Exchange Traded fund (ETF). These are cheaper than the tracker funds and much more liquid, as you buy and sell them like a share.

You'd need to open an account with a cheap online broker to buy and sell them. These brokers ( eg Hoodless Brennan, Squaregain etc) usually have no annual fee and charge by the trade.There is no stamp duty payable on ETFs.

You can also use your broker account to buy other types of funds (they will usually rebate the charges) and also shares, of course.Everything is easily organised and checked online.

IMHO if you are starting out with investing it's good to open one of these accounts first, so you can keep everything together in one spot.These brokers also offer ISAs and SIPP (pension) tax wrappers as well,with low charges.

tomstickland

OK, so you're saying that a good idea is to choose a broker, then open up an account with them and then sort the trust fund of choice and/or buy/sell using "I-Share".

paul666

I-Shares / ETF can be good but they have a huge drawback in that they pay dividends four times a year that must be re-invested (with associated trading costs) and attention from you whereas a unit trust can bought as an 'Acc' or Accumulation version that does this automatically. They're not always the cheapest TER wise either...

ETFs are good for people who speculate or trade but *not* neccessarily for your average investor and I wish people would stop always suggesting ETFs the instant the word 'tracker' or 'FTSE' is mentioned as better in all respects.

EdInvestor

they pay dividends four times a year that must be re-invested (with associated trading costs)

It's probably best to save them up and reinvest them all at once to save on costs.Personally I like to see my dividends popping into my account. Strangely they often seem to disappear in funds, or shrivel in transit.

If you're doing regular saving into funds or ETFs, Hargreaves Lansdown is probably the best online broker, they are set up for this, I believe ( and also will rebate charges).

cheerfulcat

paul666 wrote:

I-Shares / ETF can be good but they have a huge drawback in that they pay dividends four times a year that must be re-invested (with associated trading costs) and attention from you whereas a unit trust can bought as an 'Acc' or Accumulation version that does this automatically. They're not always the cheapest TER wise either...

ETFs are good for people who speculate or trade but *not* neccessarily for your average investor and I wish people would stop always suggesting ETFs the instant the word 'tracker' or 'FTSE' is mentioned as better in all respects.

They are mentioned for good reason - ETFs *are* trackers. If they are kept in a Squaregain ISA, there are no commission or stamp duty charges so re-investing dividends doesn't cost anything. I doubt that dividends in a unit trust are re-invested free of charge, btw...

People's_Will

cheerfulcat wrote:

I doubt that dividends in a unit trust are re-invested free of charge, btw...

Some are better than others.

But popular providers InvescoPerpetual and Jupiter will still take the full 5%+ charges even if you have bought the original investment through a discount broker.

With Jupiter Income this is even more sneaky because they take their annual management charge out of capital in order to increase investors' income.

EdInvestor

Another thing that's worth bearing in mind with a FTSE tracker is that it's weighted. This means that around 50- 60% of your money is going to be invested in two sectors - natural resources and financials (which dominate the top 20 share list) . Thus, if oil and mining shares have a good year, as they've just done, so will your tracker.Ditto banks and insurance companies.On the other hand, if neither of these sectors perform......you know what to expect

Some people think this makes trackers risky. It certainly seems to be true that one can devise a less risky - because more diversified - portfolio featuring mainstream UK companies and it might well make better returns more consistently because of this tracker bias.

But as long as the investor knows about the bias, it's not a problem IMHO.
Here's the top 20 so you know where most of your money's going

BP PLC (Resources)
HSBC Holdings PLC (Financial)
GlaxoSmithKline PLC
Vodafone Group PLC
Royal Bank of Scotland Group PLC (F)
Royal Dutch Shell PLC (R)
AstraZeneca PLC
Barclays PLC (F)
HBOS PLC (F)
Anglo American PLC (R)
Lloyds TSB Group PLC (F)
British American Tobacco PLC
Rio Tinto PLC (R)
Tesco PLC
Diageo PLC
BHP Billiton PLC (R)
BG Group PLC (R)
BT Group PLC
O2 PLC

6 resources, 5 financials and 3 telecoms creeping up on the inside....