£1000+ to invest, who should I go with?

EnzoMan

...so, let me see if I got this correct.

Say I know what kinda of product I want to invest in e.g Apple Stocks = AAPL. Since I know which company I wish to put my money into, Hargreaves Lansdown is more suited for this kind of investment as they are only taking a 'handing charge' or 'middle man charge' without giving me advise?

Is that the general idea? Or when you suggest "products" do you mean something else other thank Apple Stocks?

xrjtg

Apple stock ("shares in Apple" is equivalent) is a different kind of beast. Oversimplifying terribly, there are two types of investments. One is the direct purchase of stock, as you suggest for Apple. Another is the collective investment fund, where thousands of people pool their money and pay somebody else to buy stocks for them collectively. These approaches have different risks and charging structures. Directly purchasing a single stock is risky, as you're completely dependent on its performance. You can buy shares in different companies to spread your risk, but with typical fees of £20 for each buy/sell cycle, charges can rapidly eat into gains if you're only investing small amounts.

The primary advantage of investment funds is that by pooling your money with that of others, diversification is much easier to achieve, as your £1000 might be invested in 20 different underlying stocks. This is why funds are often more appropriate for small investors, and they're what I use myself.

For various reasons, the cheapest way of buying shares isn't the same as the cheapest way of buying funds. In particular, you'd want to avoid HL. If you really decided that you wanted to buy shares, then I'm sure someone else could provide recommendations.

This must sound horrendously complicated, but it's really not that bad once you get to grips with it!

Solomon_Broad

I "invest" in a Halifax reward account. It's not exactly what you're after, I think, but I get £60 back at the end of the year (well, £5, 12 time a year), with £1000 "investment". That's 6% interest, effectively. Feel free to ignore me if this isn't what you're after.

DavidHayton

Hi Enzo,
I heartily agree with the advice that £1000 is not too little to start investing. The time when you really learn is when real money is "at risk". And £1k will do that just as well as £100k.
There is so much jargon and terminology that it can all look intimidating at first. One good source of clear information would be a "platform" such as HL (Hargreaves Lansdown): http://www.h-l.co.uk/investment-services/isa. But remember that they are just one of several companies who are after your money because they hope to take a cut from it. HL aren't keen on opening an account with a lump sum of less than £3k (presumably because their cut will not make it worthwhile for them). However, if you are willing to subscribe to a regular contribution of £50 per month (or more) then they will welcome you wholeheartedly ... presumably they are hoping for acorns to turn into oaks.
On sums such as £1k you are much better with funds rather than individual stocks. In a fund your money will be split between many different stocks and you spread the risk accordingly.

Best wishes
David

EnzoMan

Solomon_Broad wrote: »

I "invest" in a Halifax reward account. It's not exactly what you're after, I think, but I get £60 back at the end of the year (well, £5, 12 time a year), with £1000 "investment". That's 6% interest, effectively. Feel free to ignore me if this isn't what you're after.

I'm listening to all advice. It's something to look into for me if I don't have enough courage to go down the investment route.

As you can see these is some good advice coming in on this thread.

xrjtg

Quick details of the Halifax Reward account: it's a current account that pays you £5 a month provided you pay in £1000 in total each month. This can be the same £1 paid in 1000 times, and the money doesn't have to stay there any length of time, so they're worth having for anyone prepared to spend 2 minutes a month pinging the money round by Faster Payments. Not an investment though!

EnzoMan

xrjtg wrote: »

Quick details of the Halifax Reward account: it's a current account that pays you £5 a month provided you pay in £1000 in total each month. This can be the same £1 paid in 1000 times, and the money doesn't have to stay there any length of time, so they're worth having for anyone prepared to spend 2 minutes a month pinging the money round by Faster Payments. Not an investment though!

It's a good way to work there system.