Regular, Small Tracker Investment?

Jegersmart

tomato3000 wrote: »

I agree the fund research is comparable, however the practicalities of investing need looking into as well. In addition I'd like to do everything online.

No. In fact I don't believe it will. However I am more familiar with the British economy than any other (as I live here and always have done) and international investment surely carries additional exchange risks (doesn't it?). I don't mind risk as long as I understand it but I don't understand FOREX or other nations economies enough to believe I would understand it.

The 'bet' that I am making is that, in the long run, the FTSE should provide a better return than any cash ISA/savings account provided by a high street bank. History suggests this should be the case.

I am only asking because with a tracker you are not buying (or paying for) anyone's expertise so you literally follow the index in question. If you invested 10k in Feb 2007 you would have a holding worth around 9k now minus fees. In fact, if you invested any time between 1998 and 2001 odd you would *still* be down now even without fees.......and the index is very volatile as well - sometimes your money may be worth half what you put in.

As to the exhange rate point, most funds (well a lot) are currency hedged so the price is quoted in GBP and so are your valuations - i.e. there is no currency risk per se.

It is naive to think that there is less risk investing in the FTSE because you are "living in England and know the economy". My view of the economy going forward is pretty dire but I still hold some holdings that contain FTSE 100 stocks (mainly high yield) and soem UK govvie bonds - but overall holding on UK is 11% of my total and half that is fixed income.

You might get a tracker fund for around 1% per year (perhaps a bit less) but I would pay the 1.3-1.6% every time for someone's expertise but *more importantly* in an area of the world where there is likely to be high growth compared to developed countries. I have around a 6% holding focussed on India - sure it is going to be alittle volatile at times but the growth potential in India is huge compared to the UK.....

Not giving advice, just throwing a different way to think about this out there:)

tomato3000

Jegersmart wrote: »

As to the exhange rate point, most funds (well a lot) are currency hedged so the price is quoted in GBP and so are your valuations - i.e. there is no currency risk per se.

It is naive to think that there is less risk investing in the FTSE because you are "living in England and know the economy".

Well foreign investment does sound better if it is currency hedged.

To clarify, I'm not suggesting the UK economy is less risky just that I'm more aware of the risks. If the property market crashes in India I doubt I'd even know about it, in the UK it would be obvious.

In the future I'm sure I'll want to diversify but to begin with I'm happiest staying 'local'.