High Risk Investment

jamesd

You sign up for an account online and they have a part of the site there that will let you set up a direct debit and what investments it buys. You can adjust the amount and what it buys as often as you like.

Alternatively you can use a debit card to pay in money and buy something. The disadvantage of this is that there's a minimum top up amount of typically £350 for a fund you already hold or £1,000 for the first buy of a fund. Unless those amounts are convenient for you, making regular changes to what a monthly direct debit buys is an easy way to spread your money around because that only has a £50 per fund minimum.

Once you have the money in a fund you can sell some and buy up to five others with the money from the sale. The limits don't apply to what you buy with this, though ti's good to stay over £50 direct debit minimum most of the time because that's effectively HL saying what the minimum sensible size for them and the fund managers to handle is.

Saving for holidays is not an appropriate use of a sticks and shares ISA for most people, because there's nothing to prevent a fast and big market drop the day before you have to pay for the holiday. Stick with the regular saver for this unless you have other savings or investments that would still let you pay for the holiday if that happened.

You could make more or less by investing in high risk investments. Depends how they do. For a short time like a year the randomness factor in the markets is quite significant. A high risk investment would be something like an emerging markets fund that could drop in value by 70%, leaving you with less than a third of the money you started with. Or it could double in value. The latter is very unlikely in the next year given where we are today. 10-20% or so up is more likely but that's low enough that the randomness factor is very important.

Forget the S&S ISA for your holiday purpose. It's better used for longer term things.

I wouldn't hesitate to use it for your purpose but my own risk tolerance is at the high end and I don't mind either cancelling a holiday or using other funds to pay for it. That's not the case for most people.

jem16

Catbells wrote: »

Do you mean I would have to leave it in for longer?

Investing is really for longer periods. At least 5 years and if regular monthly contributions more like 10 years.

Catbells

Thanks. I have a stocks and shares ISA which I've had for ages which goes up and down (currently up). Would it be better to transfer this to a HL setup. I rarely touch it.

jem16

Catbells wrote: »

Thanks. I have a stocks and shares ISA which I've had for ages which goes up and down (currently up). Would it be better to transfer this to a HL setup. I rarely touch it.

Possibly - it depends on where it is now.

Catbells

Its an HSBC investment.

jem16

Catbells wrote: »

Its an HSBC investment.

In what fund/s?

Catbells

Its a stocks & shares ISA. Had it for about 13 years and its been useful from time to time.

jem16

Catbells wrote: »

Its a stocks & shares ISA.

That only tells us the tax wrapper. It's what is inside that counts - i.e. the actual funds or shares.

Pigeon81

Hiya, joining in the convo here

A newbie to HL and would like to set up a direct debit of £80 a month, in a stocks and shares ISA. But I have no idea where to start? What are the pros and cons of low, medium and high risk? Which would be better to start with?

Thank you.

Catbells

Hi Pigeon - Just to let you know it might be better if you start a new thread with your question as this one is about done now. Cheers.