best use of 3000£ for shares isa's

hi123

hi
i am new to savings and so far wasn't sure about my plans for future hence just use my mini cash isa allowance for last 5 years
now i am in a position to take a long term view and want some help in choosing place to park the allowance of 3k in shares
i also want to try my hand in shares myself with small amount if possible within isa 's
all suggestions greatfully accepted

lipidicman

I think it is £4k now (with the demise of the £1k life policy allowance)

Mr_Mumble

As lipidicman says the mini-shares ISA limit is £4,000. If you're unaware of share ISA benefits (they aren't as good as for cash-ISAs) then check out:
http://www.fool.co.uk/school/2006/sch060224.htm

Not sure what you mean by "park the allowance." If you mean which ISA provider to choose then this will depend on what type of investment vehicle you decide. For those DIY types picking their own stock Selftrade (£25pa for the ISA + 12.50 per trade) is a popular choice whereas for those buying Unit Trusts or OEICs Hargreaves Landsdown are often mentioned.

Its difficult to justify the costs to buy a "small amount" (depending on what you mean by that of course!) of any share economically. Many consider £1000 or £2000 the minimum to invest in a share given the costs for purchasing, the bid-ask spread, 0.5% stamp duty and then selling. For a four figure sum, held long-term, these costs are nearly insignificant but for those only buying a small amount of shares that could be sold relatively quickly it could be a large chunk of the entire investment.

You may want to look into the High Yield Portfolio idea for a risk adverse and simplified way of picking shares. Do plenty of your own research before making any decisions!

dunstonh

You may want to look into the High Yield Portfolio idea for a risk adverse and simplified way of picking shares. Do plenty of your own research before making any decisions!

It is not risk adverse. It is medium risk with funds and a higher with individual shares.

EdInvestor

An advisor will often say that individual shares are high risk because they are not allowed to recommend them (and are not taught how to do so, and are thus not qualified to comment on share portfolios).

But it ain't necessarily so.

Have a look at the risk filters built into the choice of shares for an HYP.

If these rules are followed it is a less risky strategy than quite a few equity income funds.

dunstonh

Inexperienced investors often consider single shares as low risk until they get caught out. FTSE100 companies do crash and burn from time to time and a limited exposure to a handful of single shares is far higher risk than investment fund portfolios where your largest holding in any one company may be no higher than 1-2%.

cheerfulcat

A portfolio of 20-30 carefully chosen blue chip shares is not high risk. It is unfortunately in the industry's interests to portray direct shareholding as extra risky.