How do I go about it?.. Easy investing

fimonkey

Hi All,

Over the past 2 years (yes its taken me that long) I've realised I haven't the time to keep an eye on funds/stock/shares/OEIC's etc, and I'm still not entirely confident I know what they're all about!

My original plan was to invest £50p.m and I asked heaps of questions about how to do this the cheap way and self managing etc, but became confused with "sectors" and "risks" etc.

I know there's no point in seeing an IFA for such a small amount, I like 'funds' because of their diversity but have NO IDEA about their charges etc, and also have NO IDEA about putting this into an ISA. I have no idea about when I can and can't withdraw and again what charges are involved. I HAVE read and read, but the more I read the more confusing it all is!

Basically I am a medium risk investor, I want to put £50p.m somewhere (not a savings account), am in it for the long term (though as my 'fund grows I may want to protect it more by moving it into more low risk - in about 10 years time)

Please can I have a list of funds/recommendations from ppl with their associated charges and why you recommend them? And how to get into them (i.e open them up) please? (Or should I just walk into my bank and ask them? - I know thats not the 'best' way, but I'm trying to balance 'best' with 'easy' and 'cheap as possible re: fees etc')

I really want to do this, but HOW CONFUSING it is for an numerate dyslexic such as I.

Thanks in advance.

Lokolo

OK. Well for starters saying you are a medium investor could mean anything. One person's medium is another person's low, which is another person's high.

How much would you be willing to lose (% wise) before starting to get worried?

If you want easy and cheap, don't go to a bank. Hargreaves Lansdown are the best (well what majority of people on here would recommend) if you want to go for funds. The accounts are also very easy to set up.

If you are only investing £50 a month then you just need to pick one fund (as thats the minimum amount per fund), but you can swap this fund at any point. So you could switch after 6 months.

The sectors part is easy. There are a number of sectors, I have tried to put them in order of risk:

Gilts
Absolute Return
Bonds
UK Equity
World Equity
Emerging Markets
Asia

Someone might come along and tell me my order is a little wrong but they most probably will be more right than me (especially at this time or night...).

Once you have picked an area, you can go onto a number of sites

http://www.iii.co.uk/funds/fundfilter/?task=show_fund_filter
http://www.morningstar.co.uk/uk/fundscreener/default.aspx?lang=en-GB
http://www.trustnet.com/Tools/Adv-Search.aspx

Theres 3 sites which can help you pick a fund.

If I were you, I would pick a lower risk fund (Bonds or Abs Return) for now until you get used to investing, then when you are feeling more adventrous, pick a riskier fund.

p.s. this does not constitue as advice etc.etc.

fimonkey

Lokolo, Thanks for that quick advice. I thought I had to pay £100 p.m for H&G investments, I will doiuble check. I've also read a lot in the popular media about how 'dodgy' guilts are cos governments are selling them to rake in money, but the governments can't really pay them back (the 'gilts').

That last sentence probably explains how naively confused I am cos I read money week AND the press but understand none of it.

If you (and others) in this thread recommend gilts then I'll go this are (and take full responsibilty) but why do they get such a pasting in the press?

thanks again

PS: My 'medium to low' risk means I will invest £100pm for the first year (total £1200pm) and if I loose 60% then so be it (not a huge amount of money) but as I build up my investment, loosng 60% of £3800 (3 yrs wort) is a bigger amount so I'd be more gutted). I guess I focus more on 'loss' than 'gain' when looking at stuff like this.

Aegis

fimonkey wrote: »

Lokolo, Thanks for that quick advice. I thought I had to pay £100 p.m for H&G investments, I will doiuble check. I've also read a lot in the popular media about how 'dodgy' guilts are cos governments are selling them to rake in money, but the governments can't really pay them back (the 'gilts').

That last sentence probably explains how naively confused I am cos I read money week AND the press but understand none of it.

If you (and others) in this thread recommend gilts then I'll go this are (and take full responsibilty) but why do they get such a pasting in the press?

thanks again

PS: My 'medium to low' risk means I will invest £100pm for the first year (total £1200pm) and if I loose 60% then so be it (not a huge amount of money) but as I build up my investment, loosng 60% of £3800 (3 yrs wort) is a bigger amount so I'd be more gutted). I guess I focus more on 'loss' than 'gain' when looking at stuff like this.

60% loss while drip feeding is probably going to be considered high risk by almost anyone.

With £500 a month you might want to think about splitting between something from the UK Equities and Global Equities sectors. That way you get exposure to a fairly wide variety of markets, currencies and sectors even with just £100 per month.

Have a look at trustnet and/or citywire to research the funds a little.

fimonkey

Thanks again, it looks like I don't really understand 'risk'. I tend to think more in absolute terms so loosing 60% of £1200 in my first year would leave me with £480 (a loss of £720).

Loosing 60% in the second year when I would have £1680 (£1200 + £480) would be a loss of £1008, and that would start to worry me more.

Does that make sense? Is there an online QA where I can answer questions about what I'd be prepared to accept to determine my level of risk?

BW

Lokolo

https://www.fidelity.co.uk/investor/guidance-planning/plan-portfolio/myplan-portfolio-quickstart.page?

Try that. Its not brilliant but its a starting point.

Unfortuantely you were in the same position as me, with the levels of risk and such. Places such as Morningstar and iii do put their funds in a risk catagory, but this is very basic level, which I think you may find a little easier.

http://www.morningstar.co.uk/uk/snapshot/snapshot.aspx?tab=2&id=F0GBR04HVM
http://www.iii.co.uk/factsheets/?type=detail&mex=LERGCA

Thats one of my funds, which is an Above Average risk for Morningstar and High for iii. Each of the different places has different ways of assessing the risk. But easy understanding for most basic investors starting out.

cheerfulcat

fimonkey wrote: »

Please can I have a list of funds/recommendations from ppl with their associated charges and why you recommend them? And how to get into them (i.e open them up) please? (Or should I just walk into my bank and ask them? - I know thats not the 'best' way, but I'm trying to balance 'best' with 'easy' and 'cheap as possible re: fees etc')

Hi, fimonkey,

We're not really allowed to recommend specific investments. But as a general pointer, you could have a look at investment trusts. These are collective investments, like unit trusts/OEICs, but they are traded as shares. The charges are much lower than those for unit trusts. You can read more on the AIC site, here, and on Incademy, here.

I think that one of the global generalist trusts might suit you - here is an example of a fairly well diversified one ( not a recommendation, just an example! ).

For any investment you'll need a broker or a fund supermarket. Just open an account or a self select ISA, put your money into the account ( usually by debit card ) and then buy your chosen fund. If you are going down the investment trust route a stock broker is likely to be a cheaper way to buy but if you are looking at unit trusts then the likes of Hargreaves Lansdown may offer a greater range of funds and discounts.