My L&G all shares tracker - prob a stupid question

fimonkey

Hello from the idiot again and thanks for your patience so far.

So after taking the plunge and putting an initial £500 into L&G UK all shares index tracker accumulator (Via Quidco of course and held in an S&S ISA with L&G) I have been adding £100 per month to this on the 1st of every month (Direct Debit). I have now become obsessed with watching the FTSE all share index and have a few quetions.

To date I have invested £800, last week it was worth £830 this week it's worth £815. The TER is 0.5%.

1. I don't know what the selling/buying charges are but aren't they part of the TER or do I need to know them?

2. Could I have sold everything last week when it was £830 (making £30 profit) and then reinvested it again the following week when the index price had dropped, thus buying more 'units' for my £830? (Is this how it works? If so would it really be that simple - I know you can transfer from stocks to cash for an S&S ISA for a short period of time).

3. Rather than a DD set up for the 1st of every month, should I take more control and try to put this in myself (over the telephone) once a month when I think the FTSE all share index is lower (again buying more 'units' for my £100pm). It's likely to be around the 1st of every months as that's just after payday.

I'd really appreciate your comments/advice/idea's. Many thanks

MGCP

Don't try to time the market, just spend time in the market!

Seriously, unless you are in the business and spend all day tracking movements, are you really going to try to jump in and out according to your theories on whether it is a good day or a bad day (let alone the fact that there is normally a delay between your instructions being received and the sale/purchase actually happening). Hell, even if you are in the business the chances are you'll get it wrong. Just keep dripping it in and hopefully over the longer term (5 years plus) you'll see some decent gains.

bendix

There is usually a time delay between placing a buy or sell order on a fund, so trying to take advantage of short term dips etc is wasting your time, especially on a relatively small amount.

H-L, for example, receive my monthly investment sum on the 8th of each month. It is used to buy more units of around 8 different funds. The transactions are not normally completed until around 12-13th each month.

Relax. Just sit back, and stop obsessing.

fimonkey

ha ha at myself.. only took me 4 years to finally take the plunge and I was so impressed that £800 made £30 in such a short time period (compared to my crummy cash ISA) I was fantasizing about that £800 really being £8000 with a £300 profit etc.

I shall do what you suggest and sit back. This is money I can afford to loose so if it all goes belly up then I can live and learn.

I might turn my obsessions to somewhere else now then, I'm reading that Russian trackers are a high risk and I have £50 a month to add to my 'investments' (that I can also afford to loose).... I think I'll be starting a new thread on here after I've read around a bit more and become more bamboozled.

dunstonh

ha ha at myself.. only took me 4 years to finally take the plunge and I was so impressed that £800 made £30 in such a short time period (compared to my crummy cash ISA) I was fantasizing about that £800 really being £8000 with a £300 profit etc.

It could easily have been £30 loss. It isn't you that made that money. Its luck and timing that you could not predict.

At this moment in time you have "experts" saying anything from the road ahead is rocky and massive drops are going to occur or things will be volatile in the short term but long term growth is likely through to those thinking their will be a mini boom. With that sort of information coming at you daily you soon realise that its futile to second guess the markets and its just better to diversify and rebalance and keep within your risk profile.

climberup

fimonkey wrote: »

I'd really appreciate your comments/advice/idea's. Many thanks

I reckon you've got it right. Regular monthly investment into a low cost, relatively low risk unit trust.

If and when your finances allow, your next £100 a month investment could be into something like an emerging markets investment trust: they can be quite volatile, but if you're putting in the same amount each month that's not a bad thing in the long run.

Over the next 20 years which will do better: the UK stockmarket or the Indian/Brazilian/Chinese stock markets? Nobody knows, of course.

Rainmaker_uk

Remember that what you take out of an ISA cannot be replaced once your yearly allowance is used.

If you are looking for a buzz from share trading and don't worry about risk then it might be worth considering using the ISA as a wraper for individual company stocks and shares rather than an index tracker which is slow but steady.

What ever works for you - it could be a mixture.

dunstonh

I reckon you've got it right. Regular monthly investment into a low cost, relatively low risk unit trust.

FTSE all share is hardly low risk (relative or otherwise). On most risk scales it would be considered medium/high risk. its quite a common misconception and one that pops up here every now and then.

sabretoothtigger

Is anything low risk any more I wonder.

The devil is definitely in the detail, the more you assume the less you know

Ive used L&G a few times and the best time was when I decided to invest in May 2008 in a Pacific tracker.
Potentially a disaster, I kept buying for the next year and it only lost value for about 9 out of the 12 months but after a while alot of the units I got doubled in price
You cant tell on face value, its extremely common for prices to reverse

2. Could I have sold everything last week when it was £830

Unit trusts arent like stocks exactly or at least with L&G the price quoted is the price it was. What I think would happen is you ask to sell and then find out what that new price is, they update daily not constantly like stocks

Ask them is best, it might be on monday or sunday you can sell for the price quoted because of the weekend containing no new price change. I think it depends on the market because Japan trades monday early hours

climberup

dunstonh wrote: »

FTSE all share is hardly low risk (relative or otherwise). On most risk scales it would be considered medium/high risk. its quite a common misconception and one that pops up here every now and then.

Yes. An All share tracker is lower risk than unit trusts or investment trusts that, say, stock-pick in one sector, and a lot lower risk than picking one or two individual shares, is what I was driving at

I see that the annual charge on the L&G UK All Share unit trust is now 0.4% with other expenses of 0.15% making a total of 0.55% annual charges. (Source http://www.legalandgeneral.com/investments/choose-a-fund/index-tracker-funds/)

Is this the lowest cost UK all share tracker on the market?

dunstonh

I see that the annual charge on the L&G UK All Share unit trust is now 0.4% with other expenses of 0.15% making a total of 0.55% annual charges. (Source http://www.legalandgeneral.com/inves...tracker-funds/)

Is this the lowest cost UK all share tracker on the market?

No. L&G trackers are not that cheap. HSBC come in cheaper but the cheapest unit trust tracker range (and more extensive as they include an emerging markets tracker) are the Blackrock trackers. However, they are typically only available via IFAs on an IFA platform or direct to blackrock if you have over £1 million per fund. So, if you are not using an IFA then probably the HSBC are the ones to look at.