Do I have to put all my equity ISA allowance into one fund?

dunstonh

LondonSarita wrote: »

Am willing to take a bit of a punt with some of my savings and see what happens. Fed up with it sitting in savings accounts and getting hardly any interest. I figured if I put it through fund supermarlket as advised I could put some in an all-shares tracker too

Thats fine and its the reason why most invest. However, to put it in context using a 1-10 risk scale with cash at risk 1 and the highest risk unit trusts at risk 10, A FTSE250 tracker would come out at 7.

So, in your case, you are jumping from risk 1 to risk 7. Again, nothing wrong with that as long as you realise it. A lot of new investors just right up the risk scale without realising the level of risk they are taking and when the next crash comes along and they lose money, they pull out and swear never to invest again and usually try and put everyone else off as well. They should have perhaps looked lower down the risk scale.

LondonSarita

Aaah, that's interesting

Would an all-shares or FTSE 100 tracker be a bit of a lower risk?

I'm not averse to some risk as you have to speculate to accumulate, but as a complete novice, I think I should be a bit more cautious as you suggest

S

dunstonh

Personally, I would prefer the 250 to the 100. The 100 is an awful index to track. A slightly lower risk option but still only down to 6 on that scale is a FTSE all share tracker. Or another option is a global equity tracker. That introduces currency risk but has further diversification to dilute that a bit

Another way to reduce risk is to put some into fixed interest sector funds and property funds (bricks and mortar versions, not property share). Generically, they are lower risk and different asset classes that perform differently to equities.

LondonSarita

Thank you so much

Believe me, you have saved me weeks of research with that one post

It takes ages for numerical information to filter through my brain into the cells that can make sense of it all!