£300 pm to save

toeknee1

hi i intend to save £300 pm for 8-10 yrs i have seen the FA at my bank (natwest) who has advised me to open a stocks & shares isa (balanced growth fund) rather than a cash isa as this could bring better returns.
would this be the best way to save or is there a better way to save long term?
thanks in advance

jem16

The idea is right as over the long term S&S generally outperform cash.

However don't go to a bank for a S&S investment. Their products are limited and poor quality. The banks also take the maximum commission.

Instead go DIY via Hargreaves & Lansdown or use an IFA to pick funds for you although the amount involved doesn't give too much scope for discounting.

Aegis

toeknee1 wrote: »

hi i intend to save £300 pm for 8-10 yrs i have seen the FA at my bank (natwest) who has advised me to open a stocks & shares isa (balanced growth fund) rather than a cash isa as this could bring better returns.
would this be the best way to save or is there a better way to save long term?
thanks in advance

Even for £300 a month I would suggest that you consider at least 6 funds in diversified markets rather than a single balanced growth fund that you will be charged a fortune for. This sounds like typically bad bank-based financial advice, unfortunately.

Do you have any experience with investing and/or are you prepared to do a spot of research yourself to try and do better than this pretty inadequate option you've been given so far?

By the way, I have no problem with the idea of putting money into a stocks and shares ISA, it just seems silly to miss the opportunity to sufficiently diversify even at this early stage, especially since you can generally do so at no cost to yourself (other than what you invest, of course!)

Lokolo

Aegis, I looked up the balanced growth fund and it is a multi manager fund. So the investment is over a number of different funds. Not that I am supporting and saying to go ahead in buying into it lol.

toeknee1

Aegis wrote: »

Even for £300 a month I would suggest that you consider at least 6 funds in diversified markets rather than a single balanced growth fund that you will be charged a fortune for. This sounds like typically bad bank-based financial advice, unfortunately.

Do you have any experience with investing and/or are you prepared to do a spot of research yourself to try and do better than this pretty inadequate option you've been given so far?

By the way, I have no problem with the idea of putting money into a stocks and shares ISA, it just seems silly to miss the opportunity to sufficiently diversify even at this early stage, especially since you can generally do so at no cost to yourself (other than what you invest, of course!)

hi i have no experience whatsoever with investing but will now look at some other options such as an independent FA or H&L as jem has suggested ,i wouldnt feel confident doing it my self also my wife has £300 pm to invest would we be better to pool the money or invest seperately

jem16

toeknee1 wrote: »

my wife has £300 pm to invest would we be better to pool the money or invest seperately

If you are using ISAs it has to be a separate investment. However from the point of view of using an IFA your investment cost wise could be looked at as a whole and perhaps give you a better deal.

sheslookinhot

Review H&L's "Wealth 150" funds. I am sure you could pick 6 (6x£50)diverse funds from the list of 150. 6 Different funds for you wife spreads the risk even further.

Aegis

sheslookinhot wrote: »

Review H&L's "Wealth 150" funds. I am sure you could pick 6 (6x£50)diverse funds from the list of 150. 6 Different funds for you wife spreads the risk even further.

I wouldn't necessarily pick 6 funds from there, as the wealth 150 are just their flavour of the month at any given time. Best to pick 6 funds that together match the overall requirements for his investments. For example, he might want £50 per month into fixed income, £50 into commodities, £50 into property and £150 into equities, say UK equity, global equity and emerging markets. This would lead to a fairly high risk spread but with enough diversification to mitigate some of that risk and a little fixed income to limit the volatility somewhat.

Note that this is something that would appeal to me, and is actually quite similar to my current selection. However I am very tolerant of volatility and have no problems watching my stock value plummet in the short term to gain in the long term.

mr_fishbulb

Lokolo wrote: »

Aegis, I looked up the balanced growth fund and it is a multi manager fund. So the investment is over a number of different funds. Not that I am supporting and saying to go ahead in buying into it lol.

That means the fund will probably charge its own management fee on top of the management fees charged by the actual funds in it.

Lokolo

mr_fishbulb wrote: »

That means the fund will probably charge its own management fee on top of the management fees charged by the actual funds in it.

Well I did say I didn't support it

mr_fishbulb

Lokolo wrote: »

Well I did say I didn't support it

Just pointing out for toeknee1