DIY Stocks and Shares ISA

Tezzy

Hi everyone,

I'm thinking of investing in a stocks and shares ISA through H & L via a unit trust.

What do I need to know if I want to DIY? Can I simply make my lump sum payments and monthly contributions for 10 years+ and see where I get? Or do I need to closely monitor my investments and take pro-active steps?

And could someone please tell me what the difference is between me investing in a stocks and shares ISA through Nationwide (as Nationwide offer the unit trusts I want to invest in) and me investing my money in the same unit trusts myself through H and L (apart from the inital charges and discounted annual management fees)?

Thank you in advance for any guidance. x

dunstonh

What do I need to know if I want to DIY?

What investment strategy are you going to use (if one)
What risk profile do you want your funds to average out to
What are the funds you intend to use and why

Can I simply make my lump sum payments and monthly contributions for 10 years+ and see where I get?

Yes. If you are happy for a random hit and hope then nothing wrong with that.

Or do I need to closely monitor my investments and take pro-active steps?

Lazy investing rarely works out to be the best option. If you select multiple funds or specialist funds then they will go out of sync, your risk could go up and the volatility increase.

And could someone please tell me what the difference is between me investing in a stocks and shares ISA through Nationwide (as Nationwide offer the unit trusts I want to invest in) and me investing my money in the same unit trusts myself through H and L (apart from the inital charges and discounted annual management fees)?

Chances are Nationwide dont offer the funds you should have as bank and building society funds are usually pretty awful and/or expensive. Plus, you usually have to through their advice process to get them which means you are paying advice costs which you wouldnt pay if you DIY.

LongTermLurker

1) Do lots of research - would you buy a car based on the fact it had 4 wheels, or choose a house that had a roof and at least 4 walls? Or would you think about what car/house/loaf of bread fulfills your needs?

2) If you throw money into a goldmine (figuratively speaking) you might end up richer than if you throw it into a bucket of doodoo (figuratively speaking ) - if you can't tell what you're throwing it into, then it's pot luck what you'll get out at the end. A wise man hedges his bets and splits his money between a lot of different options, in the hope of averaging out the results (and the risk).

3) Your chosen fund managers will look after the day to day running, but you still need to keep an eye on the fund manager to make sure he hasn't had a brainstorm / lost his marbles / died and been replaced by a graduate.

4) The difference is the inital charges and discounted annual management fees - around 4.5 - 5% of everything you invest. So when you pay £100, they invest £100, rather than putting a fiver in their back pocket.

If you can get 100 apples for £100 then why would you be happy to accept 95 of the same variety and quality from a different supplier? Going DIY isn't hard, but you have to research, come to your own decisions and then live by them if things go awry, modifying your tactics and building up skills as you go along.

Otherwise, if you don't have the skills then you could decide that it's worth paying a professional to use his skills to pick what he thinks are good products - in much the same way as you'd let a builder build a wall or a plasterer plaster your house.

sabretoothtigger

The reduced range might show if you look at trustnet and see everything available but thats also more confusing I guess

jamesd

What sort of amount is the lump sum?

DIY for regular contributions if you want to read and learn is a good thing, since you get to make mistakes when it won't cost you too much money. And you'll be in a better position to appreciate the possible value of professional servicing if you go for that later.

Davey2009

Consider using an investment trust these often have much lower charges & sometimes trade at a discount to the total net asset worth.
Many of these trusts like Alliance, British Empire Securities or S.V.M run their own savings schemes the contact details of these & other generalist investment trusts will be on the Trustnet web site.
You can spread your risk with a fund like SVM's Global which invests in other trusts worldwide & while it may not make you a fortune quickly theres a little less risk of you losing all of your money.