Where to invest £50 per month???

frewstonburger

Hi,

I'm looking for some advice, at the moment I have no savings (never been in a position to save!) however now I have little bit of disposable income i'm starting to save a little each month. In addition to an ISA (which i'm starting to regularly save with) I want to invest around £50 per month. However I don't really know where to start looking.

I've heard about unit investment funds and think something like the FTSE 100 tracker or the FTSE All Share might be good for me. I'm looking to the long-term and want to build a pot of savings over long period of time.

First time posting on here, so if anyone could point me in the right direction that would be smashing.

Thanks!!

Kohoutek

If you would like to invest in a FTSE 100 tracker, the cheapest in terms of annual charges is this fund run by HSBC:

http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=MDFTOD&univ=U

The cheapest way to buy such investments is buying through a discount broker, not the fund provider directly. They will discount any initial fees that you would ordinarily pay. Some examples are Hargreaves Landsdown, TD Waterhouse and III.

Here's a useful introduction to unit trusts that gives you an idea of risk:

http://www.candidmoney.com/investment/default.aspx

opinions4u

frewstonburger wrote: »

I'm looking for some advice, at the moment I have no savings (never been in a position to save!) however now I have little bit of disposable income i'm starting to save a little each month.

It's a good place to be.

Before you do anything, build up a contingency fund of 3-6 months net pay that you can fall back on should an illness/unemployment/other hit on your finances occur. An easy access account such as www.theaa.com/savings is ideal for this. Alternaitvely, a Barclays Monthly Saver account may fit the bill.

In addition to an ISA (which i'm starting to regularly save with) I want to invest around £50 per month. However I don't really know where to start looking.

I've heard about unit investment funds and think something like the FTSE 100 tracker or the FTSE All Share might be good for me. I'm looking to the long-term and want to build a pot of savings over long period of time.

There are numerous companies offering tracker funds, such as L&G, but there are also other options to consider too.

- mortgage/other debts and reducing them
- pension provision
- alternative funds that spread the risk across a broader geographical area than simply the UK (which appears to have a restricted growth potential in the coming years)

Good luck!

masonic

As you don't have any cash savings, I would caution you against considering stock market based investments before you have built up a cash 'emergency fund' as opinions4u has described. Although standard savings rates are pretty awful at present, regular savings accounts do offer a better rate of return. These vary in flexibility and you may want to restrict yourself to an account that allows one or more withdrawals, but interest rates go up to 5% on these accounts. There is a thread with the best offerings here.

Once you've built up suitable reserves in cash, with £50/month to invest you will tend to be limited to just one fund. I believe Fidelity offer the lowest cost FTSE tracker (here), although some of the other brokers mentioned mat also be worth considering if you are considering picking up a broader range of funds later on and want more choices.

blingmaestro

If you had an extra £50 a month and you wanted a bit of a gamble but didn't want to buy lottery tickets, what is cost effective (I guess buying stocks outright would wipe 15-20% of your 50 quid away?) would you buy penny shares in an oil company anyway, or Halifax's sharebuilder with something on the AIM?
Losing all the money wouldn't be preferable but what if you have a really low aversion to risk but not much capital?

Primrose

I too would recommend you don't consider any investment in equities until you have built up at least 3, and preferably 6 months worth of living expenditure in an easy access account, and this could be an ISA although rates are pretty dire at the moment. Investing £50 a month will probably mean this is too small an amount to spread across more than one fund. However, if you want a broad portfolio you could consider investing in one fund for 12 months and then switch to another one.