Advice sought

Linton

831badger wrote: »

so what would you suggest bearing in mind I would like a higher return than what my isa is returning in these times of austerity?

The trouble is that a higher return means a higher risk. I am not talking about a measurable chance that all your money would disappear overnight, but rather that the value of your investments could fluctuate considerably. Some people can cope with this, other people, particularly novice investors, panic.

The other problem is one of timescale. If you want to invest you need to be prepared to leave the money for say 5 years or more to give the underlying trend a chance to outweigh the continuous fluctuations in value.

In a forum such as this we can make suggestions for investment but we cant judge whether they would really be suitable for you.

So as I see it you have two options. One is to talk to an IFA who will investigate your circumstances and attitudes in detail and will be able to find appropriate investments. But, I understand what Meeper is saying: that will be very expensive as a proportion of your small pot. But it could be a useful education.

The other option is to educate yourself. There are many books and websites you can consult, but nothing beats actually investing (assuming you are prepared to leave the money there for 5 years). So I would suggest you put say £1000 into a cautious managed fund, or possibly a general investment trust and see what happens. Keep track of the ups and downs, understand why they are happening, read the books and look at the websites and prepare to put your next £1000 into something else.

MrMalkin

831badger wrote: »

so what would you suggest bearing in mind I would like a higher return than what my isa is returning in these times of austerity?

There is no easy way of doing what you want. If there was an easy, safe, low effort way of investing that was better than a cash ISA then everybody would do it and nobody would bother with a cash ISA. The fact that such a thing hasn't happened tells you something.

Linton's post above mine is spot on. You cannot hope to succeed with investing if you do not know what you are doing. There is no free lunch. There are lots of paths you can take and there are plenty that may be what you are looking for, but only you know your circumstances, your tolerance to risk, and your ability to cope with downturns or even excess success. You need to educate yourself on the different things you can invest in until you find a portfolio mix that you are comfortable with.

Having said that, I think a good starting point would be a S&S ISA with some sort of fund(s) as Linton said. I wouldn't necessarily agree with a cautious managed fund but there are certainly worse choices you can make.

And on the subject of Meeper's pricing: £250 +VAT out of £1,000 sounds like a lot, but if you can take his advice and build a successful portfolio and strategy that lasts you the rest of your life then you could easily end up with a 6 or 7 figure amount. Out of that, £250 sounds an awful lot more reasonable. Or, to put it another way, £250 is a mere market sneeze for many investors - I've suffered daily losses bigger than that during the last few months, but also had gains bigger than that too.

gadgetmind

831badger wrote: »

What would be good (safe, if there is such a thing...) shares to start with? I am looking at this as a long term investment.

Whole markets are far from safe, individual sectors even less safe, and individual shares downright risky! You'll also get eaten alive by dealing fees with those monthly contributions unless you're smart.

Here is my advice.
1) Buy and read "Smarter Investing" by Tim Hale. This will hopefully let you understand the perils of stock picking and also show a way to invest that doesn't rely on skill and timing.
2) Find a platform that lets you drip feed money into either index trackers or low(ish) fee collective investment vehicles such as Investment Trusts.
3) Understand the long-term nature of this. Five years tells you nothing and even a decade tells you little. Use an investment strategy that maximises your return while remaining within your comfort zone.

BLB53

Here is my advice.

1) Buy and read "Smarter Investing" by Tim Hale. This will hopefully let you understand the perils of stock picking and also show a way to invest that doesn't rely on skill and timing.
2) Find a platform that lets you drip feed money into either index trackers or low(ish) fee collective investment vehicles such as Investment Trusts.
3) Understand the long-term nature of this. Five years tells you nothing and even a decade tells you little. Use an investment strategy that maximises your return while remaining within your comfort zone.

FWIW,I agree with gadgetmind, you won't go far wrong doing this.

atush

The safest lowest effort way to invest that I know of (and use) is investing in investment trust savings plans.

You invest form say 20-100 quid a or even more by DD, and the plan buys shares in the trust/s you have chosen. As the investment is monthly, it uses Pound Cost Averaging to counter market volatility as when prices fall, you get more shares/units for your montly payment than when they are rising. They are low cost, and have provided me annual returns better than cash over the last decade or so.

And because most trusts hold a number of shares and assets, they provide a wider investment spread than even 5-10 shares. And can cover areas such as global markets, emerging markets, even private equity. Or you can be more conservative and pick an income trust.

Linton

atush wrote: »

The safest lowest effort way to invest that I know of (and use) is investing in investment trust savings plans.

You invest form say 20-100 quid a or even more by DD, and the plan buys shares in the trust/s you have chosen. As the investment is monthly, it uses Pound Cost Averaging to counter market volatility as when prices fall, you get more shares/units for your montly payment than when they are rising. They are low cost, and have provided me annual returns better than cash over the last decade or so.

And because most trusts hold a number of shares and assets, they provide a wider investment spread than even 5-10 shares. And can cover areas such as global markets, emerging markets, even private equity. Or you can be more conservative and pick an income trust.

Investing in a random investment trust is no safer than investing in anything else. If you were investing 5 years ago you could have thought property was pretty safe, Invesco is a well known fund manager and MSE recommends ITs as safe. Let's go for the Invesco Property IT. It has lost 98% of its value in the past 5 years.

Conversely ITs investing in smaller companies, emerging markets, far east have in general performed very well over 5 years - say 10% annual return or more.

But I agree that a small steady purchase of a broad collective investment is more appropriate for the investor with limited resources than a one-off purchase of something very focussed.

atush

Not that I said Random ITs or REITs. Research first and decidee where you want your money invested, the choose a trust that fits that has a good reputation. In many cases, there are ITs that mirror Unit trusts/Oeics such as Fidelity Special Situations for instance.

I would suggest in this case a good general global IT. And if more than one IT, choose an income one, an emerging markets one, or a smaller companies one.

darkpool

To sum up the advice given by the professional financial advisers on this thread:

Dunstonh - Since the OP asked for a "safe share" means he's not ready to invest. (post 2)

Meeper - Go to an adviser and spend 300 pounds on a report. (post 35)

Qpop - Private investors line the pockets of the "city boys" (post 30)

It seems to be the private investors on this thread that are giving the best advice. Which is basically do some research (ie book/ internet) then invest in investment trusts or blue chip shares. The first shares I bought was Edinburgh Investment Trust, a share that I believe most investors would consider "safe", I don't believe I lined the pockets of any "city boy" when I bought these shares......

qpop

darkpool wrote: »

To sum up the advice given by the professional financial advisers on this thread:

Dunstonh - Since the OP asked for a "safe share" means he's not ready to invest. (post 2)

Meeper - Go to an adviser and spend 300 pounds on a report. (post 35)

Qpop - Private investors line the pockets of the "city boys" (post 30)

It seems to be the private investors on this thread that are giving the best advice. Which is basically do some research (ie book/ internet) then invest in investment trusts or blue chip shares. The first shares I bought was Edinburgh Investment Trust, a share that I believe most investors would consider "safe", I don't believe I lined the pockets of any "city boy" when I bought these shares......

What would you consider Neil Woodford to be, exactly?

(Also, you'll notice that I said ill-informed PI's line the market makers/institutional traders pockets)

You'll also notice that I haven't ever professed to be a "professional financial adviser" either.

darkpool

qpop wrote: »

What would you consider Neil Woodford to be, exactly?

(Also, you'll notice that I said ill-informed PI's line the market makers/institutional traders pockets)

You'll also notice that I haven't ever professed to be a "professional financial adviser" either.

Neil is the manager of EIT and perp high income.

All private investors are ill-informed when they start investing. it doesn't mean they will all line the pockets of "city boys".

you do work in the financial industry, it does suggest a certain amount of bias towards investments with high commissions.