Hargreaves and Lansdown Stocks&Shares ISA

Lokolo

Andrew2010 wrote: »

Put the whole lot in a single high yield fund for example.

Putting all your eggs in one basket, is never a good idea.

I have 2 funds - both in the same sector. One has risen by around 50% over 2 years. One has risen by around 15% in 2 years. If I had chosen the second one, and invested all my money in that, I'd be pretty annoyed!

Andrew2010

I agree but surely you need a significant amount in to get good returns whether you have 2 or 10?

Lokolo

Andrew2010 wrote: »

I agree but surely you need a significant amount in to get good returns whether you have 2 or 10?

% no.
£ yes of course, same with anything though.

Doesn't matter about splitting into number of funds though. 1 fund with £1000 at 10% rise will give £100 return. 2 funds with £500 with 10% rise will give £50x2 = £100. Same return.

It's the % change which is key.

Andrew2010

But the % can go up or down so I wonder if in the long run investing in many with 50 would be better than 1000 in a, say, 5% bond?

Loughton_Monkey

Andrew2010 wrote: »

But the % can go up or down so I wonder if in the long run investing in many with 50 would be better than 1000 in a, say, 5% bond?

A bond has nothing to do with it. Either you 'save' in a 5% bond, or you 'invest' in fund(s).

With HL, you will have almost every fund known to man available. If you put all the money in one fund, then you will gain or lose according to that specific fund. Spread it across two or more, then is evens things out.

Personally, I wouldn't invest in a bank fund at all. Specifically not the one you mention as I have never seen such a lacklustre load of fund performances as theirs.

sabretoothtigger

Bernie Madoff was a high yield fund. At least if you had more then one fund you'd not have lost it all at once.

middlepuss

sabretoothtigger wrote: »

Bernie Madoff was a high yield fund. At least if you had more then one fund you'd not have lost it all at once.

That's exactly why I'd suggest one should not invest all your funds with or via any one company, IFA, platform or whatever.

Folks in Madoff's fund got nice computer printouts every year showing all the stocks they owned - IBM, GE, Microsoft, etc - and believed they had a well-spread portfolio. Whereas all they actually had was a piece of paper.

Andrew2010

Loughton_Monkey wrote: »

A bond has nothing to do with it. Either you 'save' in a 5% bond, or you 'invest' in fund(s).

With HL, you will have almost every fund known to man available. If you put all the money in one fund, then you will gain or lose according to that specific fund. Spread it across two or more, then is evens things out.

Personally, I wouldn't invest in a bank fund at all. Specifically not the one you mention as I have never seen such a lacklustre load of fund performances as theirs.

So £50 in around 20 funds you think would be worthwhile?

jimjames

Andrew2010 wrote: »

So £50 in around 20 funds you think would be worthwhile?

You can also have the opposite effect of reducing risk - you'll be spread so thinly that any good performing fund could be masked by the small amount you've invested in it.

I would probably pick at most 5 funds in the areas/sectors that you chose and go with them. If you are just starting out then building a core portfolio around something like a FTSE tracker could make sense if you are happy with the risk but as it covers the whole UK market you are much less exposed than a specific share or sector fund.

middlepuss

jimjames wrote: »

If you are just starting out then building a core portfolio around something like a FTSE tracker could make sense if you are happy with the risk but as it covers the whole UK market you are much less exposed than a specific share or sector fund.

I'd agree with that. Much easier to invest in the whole UK market via an all share tracker than to invest in many sector funds in the hope of getting well-spread exposure. As far as I am aware the HSBC UK All Share Index tracker is the lowest cost UK tracker: TER 0.27% I think.

If investing for the long term do also consider emerging markets: China, India, Brazil. Whose econamy will grow more over the next 20 years: UK or China/India/Brazil?