Complete Novice Needs Advice Regarding Index Trackers

psychic_teabag

Those are both good, and cover very similar material. I found Tim Hale's one a bit frustrating since he seemed to go on a bit about why trackers were better than managed funds. The ETF one is already a little out of date since, for example, HSBC tracker funds have cut their costs down to similar levels to ETFS.

There's another FT book often recommended - guide to investing - but it goes into a lot of detail that's not really necessary for a beginner.

For a complete beginner, I'd suggest going to the personal finance section of your local library - most of the books will have a chapter or two on investing.

A very long time ago I bought the first edition of the Motley Fool investment book (and just let it gather dust for years). It's quite fun. I don't know what the later editions are like. Oh, that reminds me that I forgot to mention their site for introductory material - http://www.fool.co.uk/investing/guides/investing-terms-explained.aspx

frothy-coffee_2

Thankyou once again to everyone. You've all given excellent answers.

What I've decided is that I really need to read up on the subject.

At least then I can make an informed decision.

It would be silly to invest in something that I don't understand.

I'll leave the money in a high interest account until I feel reasonably confident that I know what I'm doing/getting into.

Newbie2saving

I can second the book recommendation. I read Smarter Investing by Tim Hale (worth every penny) book is easy to understand and split into sections which enable you to take the info in better without being overloaded with new jargon! I also started looking at Morningstar UK and Trustnet websites to get the news updates and familiarise myself with the terminology. Don't let it scare you off, but be well informed, do your research, remember that you can loose money as well as make profits so you need to know as much as possible before you invest.

Newbie2saving

frothy-coffee wrote: »

Thankyou once again to everyone. You've all given excellent answers.

What I've decided is that I really need to read up on the subject.

At least then I can make an informed decision.

It would be silly to invest in something that I don't understand.

I'll leave the money in a high interest account until I feel reasonably confident that I know what I'm doing/getting into.

Posted the same time as I was typing! I would say take your time and get the best interest rate whilst you're doing your research.

JamesU

psychic_teabag wrote: »

Those are good books, but the FT one is very detailed, and I think is mostly focused on shares (reading reports, etc) rather than funds. Goes into great detail on how share brokers operate, that sort of thing.

Perhaps you are referring to the FT guide to investing (defintitive companion to investment and the financial markets) by Glen Arnold here? I found this one a little overbearing if this is the one you mean.

psychic_teabag wrote: »

Most of Tim Hale's book seems to be presenting evidence that tracker funds are better than managed funds - but I think you've already decided that. I found it a bit frustrating how he went on about it so much.

Yes it goes on a bit for sure but I do feel it pushes the importance of asset allocation, matching risk with timelines and objectives, and the importance of getting costs right. These things are often underestimated when starting out on the exciting buy/sell bit which in isolation could be a recipe for disaster for anybody starting out.

psychic_teabag wrote: »

There's an FT book on ETF's - the content is quite similar to Tim Hale's one, but I found it more readable. The principles are the same, but this one just happens to go with ETF's as the collective vehicle, rather than unit trusts. But that's already out of date since, for example, the HSBC trackers have cut their costs down to similar levels to ETF's.

That's the book recommended in the second link above. Of course costs will change over time but a a very good overiew of principles and practices and types of allocations to consider.

JamesU

psychic_teabag

Doh! Yes, you're right - since this only shows the first parts of the URL's, I assumed it was the usual pair of recommendations, which is Tim Hale plus the FT guide to investing. I'll go back and edit the post accordingly.

Newbie2saving

psychic_teabag wrote: »

Doh! Yes, you're right - since this only shows the first parts of the URL's, I assumed it was the usual pair of recommendations, which is Tim Hale plus the FT guide to investing. I'll go back and edit the post accordingly.

Oopps, me too!!! Jumped the gun and assumed the FT Guide to Investing, heavy for a new investor. Will amend my post too. Thanks JamesU, I haven't seen that book, may look into it for my next purchase.

JamesU

frothy-coffee wrote: »

I feel more informed already! Although it will take me a while to digest the information. BURP!!!

Frothy. Cut and paste from older thread....One incy wincy little after dinner mint perhaps?

For choosing etf asset allocation, portfolio diversity and some of the main etf providers, this book can be considered essential reading:

http://www.amazon.co.uk/Financial-Times-Guide-Exchange-Traded/dp/0273727834/ref=sr_1_1?ie=UTF8&qid=1291296781&sr=8-1

Screens such as below for searching full range of etf providers and etfs:

http://www.trustnet.com/
http://etfdb.com/screener/
http://www.etfexplorer.com
http://www.indexuniverse.eu/europe/data.html

Research etfs of interest on the etf provider websites:
e.g. Ishare, dbx-tracker, lyxor, etfs, powershare etc etc based on what providers are chosen in the screens above.

Supplement research with keyword etf searches for articles/reviews etc:

http://seekingalpha.com
http://www.morningstar.co.uk
http://www.investorschronicle.co.uk/
http://www.iii.co.uk/


JamesU

frothy-coffee_2

JamesU wrote: »

One incy wincy little after dinner mint perhaps?

Pass me the 'Alka Seltzer!'.

Seriously Though, thankyou.

I'll check out the links