Getting started in Investing

jimjames

cashbackproblems wrote: »

What are the tax benefits of using you S+S ISA allowance for funds?

For a first ISA investing in funds is a good way of spreading risk and at low cost compared to investing in individual shares.

Jake'sGran

musehead wrote: »

Just remember that from day to day it is essentially gambling.

Even over the course of several years you could end up losing money.

I have been buying funds ...and shares for many years and have made losses but I have also made excellent gains and these well out- strip the losses.

I have just been trying to invest more in an Investment Trust run by Fidelity but found it difficult on line, due, I think, to it being Sunday. This IT has gained £500 (on £2000) since it was bought in April. It is a Special Situations IT and many investors consider these to be high risk.

So, Leiutenant, if I was you I would invest the £3700 in four funds or ITs after doing some homework on sites like Morningstar, iii or Trustnet etc. I too use Hargreaves Lansdown for the reduction in initial charges but when I looked at Fidelity today I noticed that there are no initial or exit charges if you
buy via their Share Plan system but for some reason this does not offer an ISA. Good luck.

LongTermLurker

cashbackproblems wrote: »

Investing in emerging markets funds are good as the risk is spread over many companies and you dont know enough about how the market works or individual companies and can see past performance.

However if you not willing too take too many risks i much prefer investing in individual shares and have build up a portfolio of UK listed firms, some in AIM mining/oil stock, and the other half in vodaphone, rsa, aviva, rbs and barclays.

Overall im up but made some losses on the smaller companies which then means it bcomes a"long term" hold!

Excuse me??? "emerging market funds are good to spread the risk" and "individual shares are good if you don't want to take much risk"?

LongTermLurker

cashbackproblems wrote: »

What are the tax benefits of using you S+S ISA allowance for funds?

No capital gains tax
No additional income tax
No income tax at all on bond funds
No need to mention them to HMRC (eg tax returns)
Don't affect some benefits

As it grows year on year, the above all become more important. At the end of the day, you can get a tax free income in retirement on top of your pension, which could make your taxable pension income less then your personal allowance, thus leaving you totally tax free in retirement.

Rollinghome

Jake'sGran wrote: »

I have just been trying to invest more in an Investment Trust run by Fidelity but found it difficult on line, due, I think, to it being Sunday. This IT has gained £500 (on £2000) since it was bought in April. It is a Special Situations IT and many investors consider these to be high risk.

So, Leiutenant, if I was you I would invest the £3700 in four funds or ITs after doing some homework on sites like Morningstar, iii or Trustnet etc. I too use Hargreaves Lansdown for the reduction in initial charges but when I looked at Fidelity today I noticed that there are no initial or exit charges if you
buy via their Share Plan system but for some reason this does not offer an ISA. Good luck.

ITs are shares so are traded when stock markets are open. There aren't initial charges but as with other shares you'll pay broker's fees and there'll be a spread. ITs can be an attractive option but make sure you fully understand the substantial differences to UTs and OEICs and particularly the risk when buying at a substantial "premium" rather than at a "discount".

RoyalSwank

Rollinghome wrote: »

ITs are shares so are traded when stock markets are open. There aren't initial charges but as with other shares you'll pay broker's fees and there'll be a spread. ITs can be an attractive option but make sure you fully understand the substantial differences to UTs and OEICs and particularly the risk when buying at a substantial "premium" rather than at a "discount".

I believe that (unlike ETF's) there is stamp duty to pay on IT's (0.5%) which obviously isn't an initial charge as such, but is like one.

OP, I'm in a similar situation to you. I would recommend researching as much as you can on the subject. An excellent book (and UK focussed) is Tim Hale's Smarter Investing.

In simple terms you need to decide why you are investing (goals) and how much risk you are comfortable with taking. You can then start to move towards deciding on a strategy and, finally, how to implement it.
Good luck!

jimjames

Rollinghome wrote: »

ITs are shares so are traded when stock markets are open. There aren't initial charges but as with other shares you'll pay broker's fees and there'll be a spread. ITs can be an attractive option but make sure you fully understand the substantial differences to UTs and OEICs and particularly the risk when buying at a substantial "premium" rather than at a "discount".

If this Special Situations fund bought in April is the China Special Situations launched that month then it is certainly high risk and it is now trading at a substantial premium. If it drops back to the same sort of discount as the rest of the sector then you'd be nursing a loss without the underlying investments moving at all.

adindas

Hi guys

I am a newbie in S&S. I am interested in training my selves before get involve in the real game.

I believe training in this kind will be more interesting then paying video game.

I have read somewhere there is a site which let you do a "mock" share trading so it could help people to practice before they get involve in the real trading.

Any info where to find such site will be appreciated.

Thank you

ADINDAS

blinko

think we are going off topic here, the best palce for the OP to start off with is unit trusts, ETF's arent somethign suitable nor IT's really

blinko

jimjames wrote: »

If this Special Situations fund bought in April is the China Special Situations launched that month then it is certainly high risk and it is now trading at a substantial premium. If it drops back to the same sort of discount as the rest of the sector then you'd be nursing a loss without the underlying investments moving at all.

this is precisely why this isnt idealy for newbies, thats not something he should be getting involed in

nor specialist funds eg China who has recently just raised interest rates