Trying lo learn about Stocks and Shares ISA's

SteveSilva

Okay thanks, now I just need to understand the different types of funds, I have found a website explaining OEIC, trackers, equities etc. but I just have to get my head around it all.

Loughton_Monkey

SteveSilva wrote: »

Ok, I'm not sure I understand can you for instance open ten or so funds, and invest £50 each per month for two months and then just stop (i you dont want to invest any more) but still have the funds open?
In that case why do they insist on a minimum amout of £1000 for a lump sum?

You could.

What you are doing, though, is putting yourself into 'limbo'. Can't move them anywhere else. All you can do is hold, or sell. Cash not big enough to go anywhere else. Not a particularly good strategy.

SteveSilva

Loughton_Monkey wrote: »

You could.

What you are doing, though, is putting yourself into 'limbo'. Can't move them anywhere else. All you can do is hold, or sell. Cash not big enough to go anywhere else. Not a particularly good strategy.

Ok what would you suggest?

Thanx

masonic

Loughton_Monkey wrote: »

What you are doing, though, is putting yourself into 'limbo'. Can't move them anywhere else. All you can do is hold, or sell. Cash not big enough to go anywhere else. Not a particularly good strategy.

When I started up with H-L, I was splitting £250 per month over 5 funds in the first year. This did not prevent me from switching into other funds as the £1000 limit only applies to cash on the account, not fund switches, which can be for any value. In fact, I changed my portfolio around quite a bit in those early days because I didn't really know what I was doing.

An alternative to using the regular savings option, if you have £3000 (I think that's still the minimum lump sum investment into a new ISA), you can simply split it between 3 funds and once the trades are completed, immediately log in and set up fund switches into however many funds you wish to have.

Burridge60

Why do you want a Stocks and Shares ISA?

Do you have a mortgage? What rate are you paying? Did you buy an endowment? What do you expect as a return? Do you want a guarantee of your Capital? Do you trust your Bank?

Now ask my original question again? Has your answer changed?

ChrisEvanson

I'll give you an example. I started a L&G UK Index Trust S&S ISA in March 2009. I have paid around £1900 into it and it is now worth £2290. So in two years a decent enough return. Last autumn I shoved £500 I had spare into their UK Alpha Trust fund, and fees reduced it to £480 immediately. About 6 months on it is worth £573. That's a pretty awesome return.

However, you really need to be aware of the market you are invested in. I am invested in the UK so if the stock market continues to bump along at 6000 points then I will look to pull it out and invest elsewhere. Someone posted above that their S&S ISA has been in years and is doing nothing. I would guess it did OK till 2008 then dived when the stock market did. So it will really only have recovered the losses since then, whereas mine has made big gains. Its like normal shares, whilst many make money in shares, buying shares then forgetting about them isn't the best way to make a lot of money with shares. Actively managed funds are more likely to succeed but we need to actively manage how we invest too - a fund manager can only invest in the field of his fund, if that field is on a big fall then we need to be proactive and move out money elsewhere - fund managers can't perform miracles esepcially if the shares they invest in are sliding backwards.

masonic

ChrisEvanson wrote: »

I'll give you an example. I started a L&G UK Index Trust S&S ISA in March 2009. I have paid around £1900 into it and it is now worth £2290. So in two years a decent enough return. Last autumn I shoved £500 I had spare into their UK Alpha Trust fund, and fees reduced it to £480 immediately. About 6 months on it is worth £573. That's a pretty awesome return.

You started investing at almost exactly the bottom of the market after a severe crash and have enjoyed a very strong bounce back, so while your returns are very encouraging, they are not typical. If only you'd invested a lump sum at the start, eh?

ChrisEvanson

masonic wrote: »

You started investing at almost exactly the bottom of the market after a severe crash and have enjoyed a very strong bounce back, so while your returns are very encouraging, they are not typical. If only you'd invested a lump sum at the start, eh?

I didn't have the lump sum then, but when you consider my money has been drip fed and not put from the outset, then it is quite impressive. But even the £500 last autumn has amazed me.

I'm now investing a small amount £2k in stocks as a little experiment but I am becoming a bit jittery about it all and do wonder whether to just pull the lot soon and put it under the mattress tbh!

jonnyb

Burridge60 wrote: »

Why do you want a Stocks and Shares ISA?

Do you have a mortgage? What rate are you paying? Did you buy an endowment? What do you expect as a return? Do you want a guarantee of your Capital? Do you trust your Bank?

Now ask my original question again? Has your answer changed?

I know your question was for the OP but I wanted to give an answer as you make it sound like a S&S ISA is a bad thing. That might be true if the OP does have a large, expensive mortgage and would be better off overpaying.:money:
But I want a S&S ISA to help me generate enough money to pay my mortgage off early. And it's doing that so far, with a 100% increase in value so far this financial year, from 15K to 30K. Very useful in helping me avoid CGT.
And as you asked my 46K mortgage is on a lifetime tracker rate with the woolwich - base rate + 0.17% - costs me about £320 per year in interest at these stupidly low rates.:beer:

masonic

ChrisEvanson wrote: »

I'm now investing a small amount £2k in stocks as a little experiment but I am becoming a bit jittery about it all and do wonder whether to just pull the lot soon and put it under the mattress tbh!

Are you planning to buy and just hold long term? Whenever I've considered buying individual shares, I've always been put off by the dealing costs. You need to invest a large sum to make it cost effective, even if you trade quite infrequently.