Stocks and Shares ISA for small amount?

plarka

I'm trying to decide whether to put my £400 into a cash ISA (whether easy access or fixed rate) or get adventurous and try a stocks and shares ISA. I don't mind not touching the money for 10 or 20 years.

I already have easy access cash ISAs

I know nothing about stocks and shares, investing, etc except the little I've just read on moneysupermarket.com. It's so overwhelming. Should I just choose one of their popular stocks and shares ISAs and not worry about all the details? I've wanted to try out stocks and shares for years but everytime I start researching it I get overwhelmed and give up.

Would it be worth it with only £400, and can I add to it during the year as and when I'm able?

N1AK

I'm not an expert but my first guess would be probably not. S&S ISAs protect you from capital gains tax, which you only pay after selling assets, that have increased in value by ~£10,000, in a single tax year. You'd need a considerable holding in shares, property bought for investment etc so unless you are going to add considerably to that £400 you'll get no benefit out of having them in an ISA.

The reason I'm dubious about buying £400 in shares is that generally you will pay fees for each transaction (buying, selling, transferring) and they don't vary based on the amount the transaction is worth.

If you do buy a S&S ISA you would be able to add to it, up to the limit for the year (£10k if you don't get a cash ISA, £5k otherwise).

Good luck whatever you decide.

infj

Just buy a UK FTSE all share tracker and definatly as an ISA. Better to drip feed the money over a few months - esp with Europe in meltdown. And watch the charges.
Monevator is a really good site to visit - he has a lot of info about buying and selling shares but read his bits on passive investing for the sensible way to go. Only my index trackers have made any money over the past 12 years - all my managed funds have gone NOWHERE - never again - wish I'd learnt that lesson sooner.

guitarman001

infj wrote: »

Just buy a UK FTSE all share tracker and definatly as an ISA. Better to drip feed the money over a few months - esp with Europe in meltdown. And watch the charges.
Monevator is a really good site to visit - he has a lot of info about buying and selling shares but read his bits on passive investing for the sensible way to go. Only my index trackers have made any money over the past 12 years - all my managed funds have gone NOWHERE - never again - wish I'd learnt that lesson sooner.

Really? Good lesson! I read plenty of books on investing initially and should have gone into trackers but seeing as you need £1 million to buy a house nowadays (!!) I gambled it all on AIM shares. Lost a LOT of money. Vanguard LifeStrategy funds only for me now.

plarka

guitarman001 wrote: »

Really? Good lesson! I read plenty of books on investing initially and should have gone into trackers but seeing as you need £1 million to buy a house nowadays (!!) I gambled it all on AIM shares. Lost a LOT of money. Vanguard LifeStrategy funds only for me now.

What are AIM shares? Just so I know not to get them!

For a UK FTSE All Share Tracker, I'm thinking of the Fidelity Moneybuilder UK Index on this page here. Should I just go for it? I don't mine losing this money and figure this might be a good first step into stocks and shares.

Totton

infj wrote: »

Only my index trackers have made any money over the past 12 years - all my managed funds have gone NOWHERE - never again - wish I'd learnt that lesson sooner.

Wow, you must have chosen some dire funds there. Even staples such as Templeton Emerging Mkts & RIT Capital Partners have annualised 10yr figures of 17% and 10% respectively. If investing for the long term then there is no harm in opting for a good Investment Trust, either buying direct through a fund supermarket or from £25 via their in-house investment plans which avoid most costs except stamp duty.

If you went with a UK Index tracker or similar then your investment would probably be back where it was 10 years ago although in that time you wold have dividends and the chance to re-invest them to add to your gain (or loss)

With £400 to invest then I would be looking at perhaps something like Newton Asian Income which offers a decent dividend and comes from a fairly cautious investment house imho.

Good luck with whatever you decide, remember that starting early is easier than starting big.

Best Wishes,
Mickey

plarka

Well, the Fidelity Moneybuilder UK Index looks good on here, I guess I'll just get it from that website?

The Asian one had higher fees and a higher minimum investment, so I guess I'll stick with the UK Index one.

Newbie2saving

Article here http://www.thisismoney.co.uk/money/investing/article-1583915/A-guide-cheapest-index-tracker-funds.html , also a good book is Tim Hales Smarter Investing.

You need to look at platform charges and TER's, they eat into any profit. Don't rush, do your research and find out which market you want to track and why.

Remember you could put this money into a S&S ISA and still use a cash ISA for any extra monies you build up if you ensure you don't exceed any ISA limits.

Good luck.

plarka

Thanks! The TER is .30% and the annual management charge is .10%. That sounds low to me, is it?