Looking to take the plunge into more risky investments

tradetime

Kua wrote: »

Yes, I was thinking of doing exactly that. I just need to decide what broker to use etc. Well I've got quite a bit of research to do actually .

Cheers for the useful links.

EDIT: Why is it that the ETF you linked diverges from the actual FTSE-100 so much?

I expect there's something I'm misunderstanding here.

Apologies my FTSE Etf links were wrong, I thought it looked like an awfully steep selloff, I have corrected them now, but as you can see they ETF has still risen a lot in the last 8 weeks or so, so the premise remains the same, even if the prices are different

Kua

tradetime wrote: »

Sorry, if something has "big windows" it refers to the fact that they "see you coming" £20 per side of a trade is a tad excessive, you should be paying £15 tops, and I think that's excessive, but that's another story, shop around. Transaction fee is a flat per ticket fee with most "discount brokers" so no the fee is the fee with the exception perhaps of very large trades, always read broker fee disclosures carefully.

In that case, an ETF really does seem the way to go. I read another thread where you discussed the ETF-providers (not sure that's the right term, but you know what I mean) available in the UK (I also read there that you didn't think too highly of any of them, if I recall correctly), so I'll have to shop around like you say and see what's available. I'm certainly not against the idea of an ETF that tracks something other than the FTSE-100 either.

tradetime wrote: »

Your uncle may be the best resource you can have readily available, haven't read his book, so can't draw any conclusions from that. My personal opinion is that I would not rush to put a lot of money into this market, investment wise, all at once, the crisis that sparked the selloff is far from over, and if I were an investor, I'd look to slowly accumulate positions. The problem was a long time in the making and will take a long time to fix, likely with many setbacks along the way.

I've been thinking along these lines so thank you for the confirmation .

Kua

tradetime wrote: »

Apologies my FTSE Etf links were wrong, I thought it looked like an awfully steep selloff, I have corrected them now, but as you can see they ETF has still risen a lot in the last 8 weeks or so, so the premise remains the same, even if the prices are different

Cheers. I can't actually see a difference but I closed the old link now. Sorry to be dense but how do I switch it back to the stanard (i.e. not the percentage) view?

BTW if you know of another good beginner's book on investing please let me know The Dummies guide was useful but was written with the American markets in mind. Having said that presumably I am quite free to invest in any market I choose... though I guess there is currency conversion to consider.

tradetime

Kua wrote: »

In that case, an ETF really does seem the way to go. I read another thread where you discussed the ETF-providers (not sure that's the right term, but you know what I mean) available in the UK (I also read there that you didn't think too highly of any of them, if I recall correctly), so I'll have to shop around like you say and see what's available. I'm certainly not against the idea of an ETF that tracks something other than the FTSE-100 either.



I've been thinking along these lines so thank you for the confirmation .

Yes I started a thread here which has some information on different ETF resources, from the providers to various sites commenting on and discussing ETF's
The biggest issue I had / have with ETF's listed in London on the LSE is the lack of diversity, if you look through the information on that thread you should be struck by the huge difference in what is available for investors who can access the US markets, and those who just stick with the UK. Also, the activity level in ETF's in this country is very low compared to the US which means liquidity can be an issue leading to larger bid / ask spreads. Of course if you trade US products you then encounter currency problems, risk, expense etc.

tradetime

Kua wrote: »

Cheers. I can't actually see a difference but I closed the old link now. Sorry to be dense but how do I switch it back to the stanard (i.e. not the percentage) view?

When you have the link open, just above the chart itself, you will see "Compare ISF.L vs" and a box with ISF.L in it, simply remove the ISF.L from the box so it is blank and hit enter key

Kua

tradetime wrote: »

When you have the link open, just above the chart itself, you will see "Compare ISF.L vs" and a box with ISF.L in it, simply remove the ISF.L from the box so it is blank and hit enter key

That's more like it

And regarding the liquidity issue - don't you expect ETFs to become more and more poular (afaik they are a relatively new way to invest, but I could easily be wrong on that score).

tradetime

Kua wrote: »

That's more like it

And regarding the liquidity issue - don't you expect ETFs to become more and more poular (afaik they are a relatively new way to invest, but I could easily be wrong on that score).

I'd hope so, it was one of the reasons I started the thread, to do a tiny bit towards drawing the possibilities to peoples attention. "Funds" in the form of the managed variety are far more popular in this country, brokerage firms here are in their infancy compared to the US and costs are high, on average here a discount broker will charge £10 - £15 to execute an immediate trade either buy or sell, in the US that fee will be between $5 - $10. Broker platforms here are almost unusable if the market is busy, like these people are surprised that the market gets busy, this is not the case with established US brokers, so all in all a lot of work needs to get done here. To be honest if I were an investor, I'd probably have to look very closely at the pros and cons of managed funds vs passive ETF's, but fortunately I prefer a more active approach so it is a non issue for me.

Kua

tradetime wrote: »

on average here a discount broker will charge £10 - £15 to execute an immediate trade either buy or sell

This honestly sounds low to me, especially as I expect to leave the money in there for quite a long period of time.

tradetime wrote: »

To be honest if I were an investor, I'd probably have to look very closely at the pros and cons of managed funds vs passive ETF's, but fortunately I prefer a more active approach so it is a non issue for me.

Could you flesh this statement out a bit more? Are you saying that because you don't mind doing the research yourself, you prefer ETFs?

Kua

While I'm not going to jump into anything, I'm trying to work out the nuts and bolts of actually investing in an ETF. SelfTrade have been recommended as a broker. And the first UK ETF you mentioned in your thread was Barclays ishares. So I searched I shares on the SelfTrade website and came up with this.

I'm not really sure how to interpret that, but presumably one of those tracks the FTSE-100 and once I figure out which one that is, I should make an account with ST, hit "Trade Now" and decide how much I want to invest in that particular ETF.

tradetime

Kua wrote: »

This honestly sounds low to me, especially as I expect to leave the money in there for quite a long period of time.

Well that's good, to me it's pricey, I can to be fair understand why, to some extent, essentially when you use a TD Waterhouse or an iii broker you decide on the share / etf you want to buy they display a price and then you "effectively" e-mail a dealer working for that broker to place your order, (the platform obviously makes it much quicker than an actual e-mail, but the principle is the same) he theoretically approaches a number of market makers and gets best price for the trade and voila, it's done, sometimes you then get notification that they were able to better the price that was displayed on your screen when you agreed to the purchase. The system needs to be computerised to remove the associated costs.

Kua wrote: »

Could you flesh this statement out a bit more? Are you saying that because you don't mind doing the research yourself, you prefer ETFs?

I spend most of my time watching the markets as primarily I daytrade Index futures, so from morning to evening I am exposed to all the opinions, news reports etc that come out of the market, so yes from that perspective I could be said to do my own research, ETF's I trade, on what is referred to as a "swing trading" basis, that is I hold for days to weeks, sometimes months at a time. As I am not managing £150million or more like Investec or whoever I am able to move in and out of the market as I feel the need, I can exit all my positions in a session if necessary, whereas a fund will often take days to weeks to unwind their positions, I consider that a big advantage. However investing is not about moving in and out of the market in such short spaces of time therefore if I were an investor that consideration would not apply