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Got close to £10K. Never invested before, options please?

Options
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Comments

  • StuartGMC
    StuartGMC Posts: 2,175 Forumite
    Jack
    I didn't get into the S&S ISAs until June 2006. At that time (as a NatWest customer) we'd done a review at the same time we moved to an offset mortgage. Well it was 50/50 on the outcome:
    For - offset has really worked for us
    Against - the funds Natwest could offer were low performers in terms of their sectors. Although I signed, we cancelled well inside the 14day cool off period as I realised I could do better myself.

    Pick up Money Observer if you want to read about things more before you commit. I would not jump to get an S&S ISA unless totally comfortable. Better to miss 2008/9 tax year allowance and take a measured decision than to rush in and regret later. Instead, having secured your 2008/9 Cash ISA, just put the other £3600 into your 2009/10 Cash ISA next week, then build your money month by month into the S&S ISA over the year.

    To help choose your online supermarket have a quick look at their charges and more importantly the minimum amount you are allowed to invest per month in each fund because this may well limit how much you are able to diversify your investments. At the time we started typical minima were £50 per fund per month, in the last year or so the minimum has typically dropped to £20 per fund per month on interactive investor. This has helped us to increase our spread and we will now be slowly getting a portfolio which will grow with a better balance of high risk (Latin America and Russia/Greater Russia) and others.

    We run 2 identical ISAs and can only afford a total of £300 per month presently (when we started this meant just three funds could be invested into per month on a regular basis, the monthly has gone up then down in the meantime as we have swung to significant overpayment on the mortgage.) I use Trustnet to look at the "complete" position of the portfolio and to do comparisons of funds, plus the FT site and iii, but that's my personal choice - am also thinking to subscribe to Money Observer too.

    Gauge your own comfort in terms of risk. We have other cash savings, company pension final salary scheme/local government final salary scheme for us, nearly mortgage free and plans to significantly increase savings & investments per year (44% income is the target) once mortgage is cleared. That means our S&S (Funds) ISA can have a % which may seem high now in terms of high risk (we're 44 so we'll move to lower risk, gilts etc as we move to 60).

    Our situation is as below, (from my thread in Feb) but it is NOT a recommendation, just a picture of our situation and you can look these up in terms of the Fund comparison tables etc. It will also change when we can move to max Cash ISA and balance to S&S ISAs from Jan 2010, as we need to futher spread investments and perhaps pick up one or two specialists (like renewable energy or ethical)

    1) Stopped contributions in Jan 09 to Neptune Russia & Greater Russian due to the fall in the Ruble and losses on this fund. Not selling though due to this crystallizing losses, so hope it will recover in a couple of years.
    2) Threadneedle Latin American - reduce to 13.3% of monthly investment as we hold units in this already
    3) Investec UK Smaller Co - reduce to 13.3% of monthly investment as we hold units in this already
    4) Blackrock UK Absolute Alpha - new fund at 20% of monthly investment
    5) M&G International Sovereign Bond - new fund at 20% of monthly investment
    6) First State Asia Pacific Leaders - new fund at 16.7% of monthly investment
    7) Neptune US Opportunities - new fund at 16.7% of monthly investment

    You need to think about your own position and how much loss you can tolerate and that you can leave it all untouched so it can recover. We were about 50% down overall in January, we have continued to invest monthly and with the growth seen in the markets this past month, our loss is "only" 36%. We can leave the money invested so the losses are not crystalised - do you have alternative savings allowing you to do likewise?

    Best wishes in taking the first step, enjoy the ride!
  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    jackhulk wrote: »
    Yep, thats the most newbie friendly site I've come across so far, I'm give them a call. Hopefully they can provide a 'Cash Park' option like Fidelity.co.uk offers.

    With regards to equity ISA, as long as I get it open in time, can I then deposit cash (up to 08/09 limit) after 5th April?
    Afraid not, you'd need to transfer in before the tax year ends. Hence why you need to get them on the phone and ideally put money in using your debit card immediately.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    With the above in mind, if I choose (and I'm quick) I could use £7200 this tax year and then rest next tax year, ie next week? Correct?

    Yes.

    Stocks/shares: Now really is quite a good time to consider them. Prices are low cos of the fall in the market over the last year, so hopefully they should go up....soon..... BUT: there's no gurantee. They might fall further, or stay where they are for a while. The thing about shares is a) unlike savings accounts there is always a risk and so b) you need to think longer term (3 - 5 years) so if there IS a fall, the price has a chance to come up again.

    Think to yourself: any cash I might need, don't put in shares, use savings. Any money I can lock away for (some) years, consider shares and buy now (low price) sell later (high price)
  • jackhulk
    jackhulk Posts: 135 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    @ StuartGMC - Thanks. I'll certainly will make use of next week's Cash ISA, and will only be dipping my toes in to S&S ISA this time around.

    @ Aegis - I could only probably debit £1500 tomorrow, so I would lose out on the rest of this years allowance?
  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    jackhulk wrote: »
    @ StuartGMC - Thanks. I'll certainly will make use of next week's Cash ISA, and will only be dipping my toes in to S&S ISA this time around.

    @ Aegis - I could only probably debit £1500 tomorrow, so I would lose out on the rest of this years allowance?
    Afraid so, but you could make a start on next year's allowance shortly after that, so it's not all bad.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
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