How To Start My Investment Portfolio

David43

Hi,


I am looking to start my very first invement portfolio (funds inside a S&S ISA).


But I am not sure what type of funds I should invest in first, to make the foundations of my porfolio.


My main area of interest is BRIC emerging markets but it would make sense not to have 100% of my investment in this area? So what other types/areas of invesment would I use to balance a high-risk portfolio?


I would like to invest £50 a month (to start with), to be accessed upon retirement, thefore looking for long-term growth.




Little background on me is that im 23, I believe I have sufficent cash savings and I save £800 a month from my salary, so I feel I can afford to 'risk' the £50 a month for lure of greater gains over the longer term..


Also, I haven't used my CASH ISA this year as the rates are quite low, even when you take into account the tax-free element? (Using Lloyds TSB vantages and regular savers instead which have better interest?)


Any advice would be much appreciated



Thank you

Rich1976

David43 wrote: »

Hi,


I am looking to start my very first invement portfolio (funds inside a S&S ISA).


But I am not sure what type of funds I should invest in first, to make the foundations of my porfolio.


My main area of interest is BRIC emerging markets but it would make sense not to have 100% of my investment in this area? So what other types/areas of invesment would I use to balance a high-risk portfolio?


I would like to invest £50 a month (to start with), to be accessed upon retirement, thefore looking for long-term growth.




Little background on me is that im 23, I believe I have sufficent cash savings and I save £800 a month from my salary, so I feel I can afford to 'risk' the £50 a month for lure of greater gains over the longer term..


Also, I haven't used my CASH ISA this year as the rates are quite low, even when you take into account the tax-free element? (Using Lloyds TSB vantages and regular savers instead which have better interest?)


Any advice would be much appreciated



Thank you

£50 Per month will only usually let you save into one fund. If you want to save in more than one then you will need to double your contribution. If you listen to the experts, emerging markets is the future but it is a very high risk area and if the fund plummeted by say 50% or more how would you react? Also don't buy the fund straight from the fund provider as this is very expensive. You are best to go with a fund supermarket where the charges are lower.

dunstonh

You are not going to be able to get a balanced portfolio on £50pm. Not unless you use a fund of funds.

You are at the minimum premium per fund for most fund supermarkets. Until you build up a few thousand pounds you are not going to be able to diversify using single sector funds like emerging markets.

That said, you cant really lose too much on £50pm as it will take you many years to build up a lump where you can lose amount. The problem with regulars is that financial crisis tend to occur on average once every seven years. So, just as you have built up a large enough lump sum, along comes a market crash. Those that understand wont have a problem with that and will see it through. Those that dont understand will usually pull out and suffer the loss (and then usually slag off stockmarket investing for the rest of their life when in reality it was their own fault).

So, you need to decide if you want to go right in at the deep end as you are indicating or to take it steadier with a more balanced approach until such time that you can diversify.

Round_The_Bend

You can invest a minimum of £20 per fund with Interactive Investor at www.iii.co.uk, which may be worth considering. You could spread your risk a little by investing in three funds therefore for £60 per month.

kavomix

I second what Round the Bend said.

iii allows a min of £20 per fund, so you could open an S&S ISA and invest in 3 funds a month. Considering you put £800 into savings each month, I think you could use the £50/£60 as your first dabble in investments, as its not that much if you do lose half of it.

I would advise reading up on the funds (what and where they invest, charges, accumulation etc) and then select your first 3 funds to start with. I'm currently doing the same myself (aged 24) and I'm putting £100 a month into the iii ISA. As you can see below since September its shown a nice little increase :T

David43

Thanks for the advice guys!

iii sounds like a great option for me to use.

I am happy to invest £60 a month and see how I feel.

I think its best not to 'jump' into emerging markets straight away, so I will invest in lower risk funds at first, then diversify with some higher risk in due time (when I have more confidence).

Is there any good websites that anyone would particularly recommend for a beginner for researching funds etc?

Thank you

Round_The_Bend

David43 wrote: »

Thanks for the advice guys!


Is there any good websites that anyone would particularly recommend for a beginner for researching funds etc?

Thank you

Try www.trustnet.com. This will allow you to measure performances of individual funds against other funds, benchmark indexes, etc.

I wouldn't necessarily be adverse to investing in Emerging Markets at this stage, particularly if you're investing for the longer term. Aberdeen and First State both offer funds in this area and have managers with good long-term track records. Trustnet provides information on individual managers.