company shares vs managed funds

tradetime

Lokolo wrote: »

I suspect if you're investing £10-20k on shares then you wouldn't be on this site as you'd be loaded already lol

Assumptions are a dangerous thing. two years S&S ISA allowance is right in the middle of that figure, far from loaded by just about anybodies definition.

Lokolo

im writin this on my phone so not sure how its goin to show...

How is investin in shares a lot lot cheaper? With a 0.5% in fund for initial charge, to beat that with a 12.50 charge each way i'd have to be investing £5k in each stock, so to get a decent portfolio i would be looking at £50-100k. Plus, depending on the broker, yearly charges of around £40 (tdwaterhouse), then ISA most probably costs more.

Yeh its fair enough investing that much but noone is going to get inheritence of £20k for the first time, says ok i will buy £5k of BA, Vodafone, something and something else each. If they do they are extremely stupid. At least with funds you can afford for little amounts to start off knowing what investing is like.

And yeh at the moment i only invest £100 a month but this is going to start me off somewhere. I invest in 2 funds, 1 with charge of 0%, 1 of 0.5%.... I am investin £1k in each fund then switching. I start a job in a month so should be able to put another £50 a month into another fund. Overall i will invest in 5-7 funds over the next 4 years then will stop, rearrange every year or 2 to benefit (at very very low cost, unlike shares).

Lokolo

i was goin to edit post but thats effort on this phone lol

But you're also assuming that everyone who invests has 20k. The savings i have at the mement is the most i have ever had but why should that stop me tryin things out and learning?

Rollinghome

Lokolo wrote: »

How is investin in shares a lot lot cheaper? With a 0.5% in fund for initial charge, to beat that with a 12.50 charge each way i'd have to be investing £5k in each stock, so to get a decent portfolio i would be looking at £50-100k. Plus, depending on the broker, yearly charges of around £40 (tdwaterhouse), then ISA most probably costs more.

No, as far as I know, the TD Waterhouse account fee of £10 a quarter only applies on accounts that are both inactive and valued below £5K. Otherwise there's no management fee and no management fees for an ISA either.

In contrast, a managed UT will typically charge you 1.5% p.a. When you consider the return on equities over the last 10 years, losing another 15% out of your capital over that period in fees isn't small beer

The way to run up costs on shares is to overtrade.

I'm not pushing the case for either stocks or collective investments. It depends on how you invest. I have both.

Yeh its fair enough investing that much but noone is going to get inheritence of £20k for the first time, says ok i will buy £5k of BA, Vodafone, something and something else each. If they do they are extremely stupid. At least with funds you can afford for little amounts to start off knowing what investing is like.

And yeh at the moment i only invest £100 a month but this is going to start me off somewhere. I invest in 2 funds, 1 with charge of 0%, 1 of 0.5%.... I am investin £1k in each fund then switching. I start a job in a month so should be able to put another £50 a month into another fund. Overall i will invest in 5-7 funds over the next 4 years then will stop, rearrange every year or 2 to benefit (at very very low cost, unlike shares).

Do you mean annual charges of 0% or 0.5%? If so I assume you have some sort of tracker or non-equity funds. What are they called? Managed equity funds will charge much more.

Yes, if you've only a tiny amount then shareholdings wouldn't be appropriate but then, in my view, neither would most other equity investments. It might make sense for a bit of fun but not for serious investing. I'd be saving for a house when the market finally hits bottom - maybe 3 years or so - and not taking risks with my deposit money until I had enough to lose.

I didn't get most of my capital from inheritances, it's the result of working it but especially making sure I didn't lose money. (And maybe a bit of luck along the way.) The downside is always more important than the upside.

crisp

Rollinghome wrote: »

unless your family has discovered the secret of eternal life. :rolleyes:

if you know the company, I want the tip

Lokolo

I was mainly talking of the initial charge. With a 1.5% AMC I would quite happily pay this if it means I get a 10% a year growth.

With shares you have sooooo much risk. With 10 shares in your portfolio, if you had Northern Rock or Vodafone or Carter and Carter, you would have seen great losses. My high risk fund had a lot in banking so went down around 40% because of banking sector.

But I agree it does depend where you are investing. Mine are global growth so if I wanted a portfolio of shares with the same attitude I am sure I would be paying more than 1.85% AMC and 0.5% initial charge lol.

I will still keep the same for UK equity, going a UT rather than index tracker or inidividual shares. I can't put the shares in an ISA so thats CGT. Plus costs make it stupid for me to even think about it as I want £1-2k in each area.