New to Reg Share Investing

Newbie2saving

Hi all,

You have always helped me out in the past and I need some pointers again please...

I would like to start putting £100/mth into shares. I have joined the company sharebuy scheme and already have some barclays shares, but want to diversify and add a number of other sectors into the pot. For me this is best done on a monthly basis, thinking of using TD investing at £1.50/mth/stock and they will reinvest dividends automatically at a cost. The dividends are for growth, not income.

My worries;
1) Is there a better platform to use?
2) How easy is it to transfer across to other providers if necessary?
3) I always read that £1000 is really the min you should invest in one stock. Any thoughts?
4) With £100/mth how many stocks would be a sensible buy?
5) With this kind of investment I wouldn't be using up all of my S&S ISA allowance, although I have the funds to fully subscribe now, would I be better re balancing my S&S ISA portfolio and using the spare to buy shares? I am currently with HL though and they do not offer regular investing.

I am a basic rate tax payer, the investment is for the long term, just feel that I should be looking to widen my investment interests and shares is something new to my portfolio.

Any help really, really appreciated.

Linton

Newbie2saving wrote: »

Hi all,

You have always helped me out in the past and I need some pointers again please...

I would like to start putting £100/mth into shares. I have joined the company sharebuy scheme and already have some barclays shares, but want to diversify and add a number of other sectors into the pot. For me this is best done on a monthly basis, thinking of using TD investing at £1.50/mth/stock and they will reinvest dividends automatically at a cost. The dividends are for growth, not income.

My worries;
1) Is there a better platform to use?
2) How easy is it to transfer across to other providers if necessary?
3) I always read that £1000 is really the min you should invest in one stock. Any thoughts?
4) With £100/mth how many stocks would be a sensible buy?
5) With this kind of investment I wouldn't be using up all of my S&S ISA allowance, although I have the funds to fully subscribe now, would I be better re balancing my S&S ISA portfolio and using the spare to buy shares? I am currently with HL though and they do not offer regular investing.

I am a basic rate tax payer, the investment is for the long term, just feel that I should be looking to widen my investment interests and shares is something new to my portfolio.

Any help really, really appreciated.

1) Different platforms provide different facilities at different costs. So what is best depends on what you want. TD look expensive - iii for example is free. However platform charges are likely to change in the near to medium term future as the FSA tries to make charging explicit.

2) Depends on the platform. There are likely to be charges. The platform I use (iii) has free transfers in and £15/share to transfer out.

3) In general yes because platforms typically have minimum charges of around £10 per trade, but a couple of platforms Halifax and iii provide a cheap facility ("regular investing" for iii) for much smaller amounts. They do this by bunching up share buy requests from all memebers of the scheme and so minimise costs. Under those circumstances I guess but dont know that you will have to accept the price when the buying actually takes place so its not suitable for frequent trading.

4) If you dont use the regular investing facility accumulate the cash until you have say £500-£1000 pound available and then buy one share, so to answer your question, 1 per year. However this is somewhat risky - perhaps you would be better advised to invest in a broadly based fund which does accept regular small purchases.

5) Dont understand. What do you do with HL? What is this S&S portfolio that you may want to rebalance?

Newbie2saving

Linton wrote: »

1) Different platforms provide different facilities at different costs. So what is best depends on what you want. TD look expensive - iii for example is free. However platform charges are likely to change in the near to medium term future as the FSA tries to make charging explicit.

2) Depends on the platform. There are likely to be charges. The platform I use (iii) has free transfers in and £15/share to transfer out.

3) In general yes because platforms typically have minimum charges of around £10 per trade, but a couple of platforms Halifax and iii provide a cheap facility ("regular investing" for iii) for much smaller amounts. They do this by bunching up share buy requests from all memebers of the scheme and so minimise costs. Under those circumstances I guess but dont know that you will have to accept the price when the buying actually takes place so its not suitable for frequent trading.

4) If you dont use the regular investing facility accumulate the cash until you have say £500-£1000 pound available and then buy one share, so to answer your question, 1 per year. However this is somewhat risky - perhaps you would be better advised to invest in a broadly based fund which does accept regular small purchases.

5) Dont understand. What do you do with HL? What is this S&S portfolio that you may want to rebalance?

Thanks so much for the reply. I will answer the last question first as I may be confusing a few issues here (apologies).

5) I have a S&S ISA with HL that I could add this years allowance to. I could then add a 2/3 further funds to it and rebalance the existing pot and leave some spare for the shares I wish to purchase, that way they would all be with HL (although I know HL aren't good value, I am worried if I move everything to another provider they will implement similar charges!) - does that make sense?

1) iii I thought were the same cost as TD http://www.iii.co.uk/trading/share-dealing/how-do-i-invest/portfolio-builder or have I got it wrong?

2) Seems fair, good to know it can be done.

3) Exactly what I wanted - Halifax seem expensive at £2/trade.

4) Interesting option, just thought that the cost of AMC would outweigh a trade cost, and this would be an ongoing cost rather than a one off. Good idea though and one I will consider.

Thanks for your input....

BLB53

I think iii would be better than TD as there is only 1% fee for reinvesting the divis (thats 1% of the dividend paid) so only a few pence.

It will not be economical to invest £100 pm - possibly better to go for £300 every quarter.

You possibly need 20+ shares in different sectors to be diversified but have you considered ITs eg City of London?

Also think about faster growing smaller companies - again possibly an investment trust eg Aberforth is a good way to diversify.

Good luck!

Newbie2saving

BLB53 wrote: »

Ithink iii would be better than TD as there is only 1% fee for reinvesting the divis (thats 1% of the dividend paid) so only a few pence.

BLB53 wrote: »

It will notbe economical to invest £100 pm - possibly better to go for £300 every quarter.

You possibly need 20+ shares in different sectors to be diversified but have you considered ITs eg City of London?

Also thinkabout faster growing smaller companies - again possibly an investment trust eg Aberforth is a good way to diversify.

Good luck!

Thanks forthe reply. I am finding the more I research this, the more confusing it becomes!I initially set out to hold maybe 7-10 stocks this year and then next yr add a couple more. I thought if I chose solid (as solid goes, I am aware every company has risks, eg.rbs etc) bluechip companies with P/E's of <10,and reasonable dividends I should be starting at a sensible point. However now thatI am confused I am not sure what to do!

I haven't really looked into IT's - I hold one which is the bloomer of Fidelity China SS, naively sold on HL's publicity when I first started out. Shame on me I know!

A couple ofIT's I have got on my 'research list' are

AberdeenAsian Income Fund Ordinary Shares (AAIF),Schroder Oriental Income Ord GBP0.01(SOI), Shires Income Ordinary 50p Shares(SHRS), INVESCO Leveraged High YieldFund Ordinary 5p (ILH), but once again this begins to deviate from my original plan.

Basically by buying shares through a different provider such as iii or TD this year I am committing myself to the full ISA allowance (as the rest of my ISA is held withHL) and I didn't really want to do that, I suppose I could split it 50:50 withcash, but this then leaves me a little short on my targeted spend (thought about £7k). Maybe it would be wise to reduce the initial costs as a new investor to shares and add another few next year.

Lots to consider before making these decisions...

PS. Apologies, not sure what has happened to the font!

BLB53

I think its a good idea to keep it as simple as possible.

Rather than spend time and fees buying shares, you get the same result buying a couple of ITs. The two I hold for UK are Murray Income and City of London. For overseas diversity I hold Murray International and Schroder Oriental Inc.

HL are ok for funds but can work out a little expensive for holding shares and ITs or ETFs. Sippdeal can compete with HL for funds and compare with iii for shares, so that may be another option.

Newbie2saving

That is good to know. I like the HL website, but I don't like paying for it! So I think I will have to have a thorough review of my overall portfolio and strategy moving forward. Thanks for the info on the ITs you hold, I know it isn't advice, but I will look at them.

Is there anyway of drilling down into IT's holdings?

Thanks again.

Newbie2saving

Newbie2saving wrote: »

Is there anyway of drilling down into IT's holdings?

Did a little research and realised you can go onto the individual IT's websites where they provide a breakdown for you, some list the entire stock, others the top 10.

Thank you again BLB53.