New to shares/stocks (interactive investor)

j124

Hi,

I recently decided to open an ISA shares&stocks account with Interactive Investor (iii.co.uk), so that the other half of my ISA allowance would be open up to use. I've never bought stock before and only really have rudimentary knowledge of investing. My account isn't active yet as I need to send some identity info but hopefully I will sort that out soon; I was wondering what are peoples general impressions of this site/company? The site is quite clunky but seems functional enough, but theres not many reviews etc on the internet so it'd be cool to hear some peoples' opinions of using this company.

Anyways, what drew me in the first place was the 'Portfolio Builder,' whereby there are four days of the month on which you can trade; you select one, and any pending trades you have go through on that day. The commission is a flat 1.50 pounds I believe. I am not allowed to post links as a new user but if type "interactive investor portfolio builder" in Google, the first link gives a lot more detail.

My plan was to invest a one-off sum of about 150-400 pounds in 'safe' (like National Grid?) and/or dividend paying stock, and then leave them for a few months and see where it goes from there. Possibly leave them for a year or longer.

Would it be worth investing this amount? The only fees I would have to pay as far as I can tell is the 1.50 at the beginning to buy some stocks and another few 1.50 to sell them, and there are no holding fees. I would probably reinvest any gains as well.

Also I have a cash ISA account currently with HSBC... there wouldn't be any conflict with having an ISA account open with Interactive Investor as well? I believe the Interactive Investor ISA includes a cash component as well but I don't plan to use it.

thanks for all your advice

J124

Lokolo

That's all well and fine. iii are (or were) owned by Halifax.

Good luck, have fun, and don't invest anything you cannot afford to lose

CLAPTON

do check out the buy - sell spread too
trading regularly on £100 worth of shares is unlikely to make any money

j124

Thanks for the advice! So iii are fairly reputable then I presume; I'll probably invest 200 pounds to start with. I don't mind not making noticeable returns, its just to get into the swing of investment really. Kind of like a more interactive second bank account.

CLAPTON

j124 wrote: »

Thanks for the advice! So iii are fairly reputable then I presume; I'll probably invest 200 pounds to start with. I don't mind not making noticeable returns, its just to get into the swing of investment really. Kind of like a more interactive second bank account.

better to try out their 'fantasy' portfolio for a few months and see how you get on

gt94sss2

j124 wrote: »

Would it be worth investing this amount? The only fees I would have to pay as far as I can tell is the 1.50 at the beginning to buy some stocks and another few 1.50 to sell them, and there are no holding fees. I would probably reinvest any gains as well.

I think you may find the charge is £10 to sell - I believe the £1.50 only applies to buying shares using the Portfolio Builder option.

Other than that, having a cash ISA with HSBC won't make any difference, as long as you keep within the relevant annual ISA limits..

Trying a 'fantasy' portfolio as has been suggested is a good idea and you may also want to read the business sections of newspapers and/or look at a website like www.fool.co.uk to learn more about share investing

Regards
Sunil

Geoffo_M

Not a good idea, too risky. There is no such thing as a 'safe' share. Apart from dealing costs, be also aware of the bid/offer spread. It might look as if the spread is small when you buy the shares, but this can be a lot wider when you come to sell. You would need a lot more than £100/£450 to be able to recoup the fixed costs - and that's assuming the share price will rise

Theyarv1

I use III, and once you get used to all the extra features it is pretty user friendly.
As mentioned, you will indeed have to pay £10 to sell - and also 0.5% stamp duty on each buy.
Whilst investing small amounts, i would personally only do 1 thing and that is to buy and hold forever (10+ years) otherwise the fees will completely eat you up, especially if you are buying different shares.
gl.

j124

Thanks for all the replies. So stamp duty applies even under the ISA wrapper? 10+ years is a long time, I was hoping to see a smaller gain over a shorter period, say between 5-10% over the course of a year, possibly slightly longer? And I would buy all my stock one-off and then sell them at the same time at the end of the year or whichever period, to keep flat costs to a bare minimum. Hypothetically then, what would be the minimum amount to invest to see any real returns (over a year period or shorter)? I am practising on a fantasy portfolio virtualtrader.co.uk for the moment as has been suggested, and probably won't invest now anyway for a fair while.

chris_m

Bear in mind that the dealing fees and stamp duty apply to every stock you buy/sell, not one set of fees for a batch of stocks. And, yes, they do apply within the ISA wrapper.

It is very possible to make a return, sometimes a good one, in a much shorter period of time - but you have to be prepared to take more of a risk to do that, or be very lucky. I have managed more than 10% in less than a day on one stock, I've also lost more than 10% in a day on another. Overall I'm more than acceptably ahead, but I did start with a larger capital than you're thinking of so dealing costs were more diluted and have added more as it's become available. I've also had more than my fair share of luck, I think.

CLAPTON

j124 wrote: »

Thanks for all the replies. So stamp duty applies even under the ISA wrapper? 10+ years is a long time, I was hoping to see a smaller gain over a shorter period, say between 5-10% over the course of a year, possibly slightly longer? And I would buy all my stock one-off and then sell them at the same time at the end of the year or whichever period, to keep flat costs to a bare minimum. Hypothetically then, what would be the minimum amount to invest to see any real returns (over a year period or shorter)? I am practising on a fantasy portfolio virtualtrader.co.uk for the moment as has been suggested, and probably won't invest now anyway for a fair while.

dealing cost are per share type
so if you have several different shares then selling them all together won't reduce your costs
and in any event they may not all be in profit

to expect to make 10% each year is pretty optimistic