Regular savings into shares

shazkhan111

I am looking to invest a small amount (£100 in each share) into UK stocks. So may pick a few and invest at total of £300 per month in it.

What is the best way of doing this? Which broker allows this? I normally use hargreaves lansdown. It doesn't appear that they allow regular savings onto shares (only funds).

Thanks

JoeCrystal

Hmmm, Halifax Sharebuilder do it for £2.00 per investment per month. Bear in mind you need to choose specific day to do it in advance. There are many other brokers do it as well. Have a look around.

Cheers

Joe

shazkhan111

who are the other providers?

cos_2

I use Halifax (as above) and https://www.iii.co.uk

There's also http://www.selftrade.co.uk

cos_2

Bear in mind they charge per stock, so if you invest £300 over three stocks, you get three charges. If you buy just one stock, then just one charge.

E.g. for Halifax, first scenario would cost you 3 x £2 = £6 (2%)
Second scenario would be 1 x £2 = £2 (0.67%)

You may want to think about investing £300 into one stock per month rather than £100 into three.

Thrugelmir

Better to use one of the Investment Trust saving schemes. Under £20k of investment, holding individual shares isn't worth it. Maybe fun. But not a sound way to build a portfolio.

grey_gym_sock

also bear in mind that when you come to sell a share, you have to pay the broker's standard commission (not the regular dealing commission), i.e. £10 for halifax or iii, £12.50 for selftrade or TD direct. (TD direct are another broker who offers regular dealing.)

calculate your expected total costs for buying and later selling a share, i.e. what percentage it would have to rise before you are in profit. this includes: buying commission, selling commission, 0.5% stamp duty when buying, plus the bid-offer spread (i.e. the difference between buying and selling prices - probably < 0.1% for big companies, but can be as high as 10% for very small companies).

cos_2

grey gym sock highlights more of the costs. Remember, investing in the stock market at this level has to be very long term. You ain't gonna buy a stock at £1.00 per share, and suddenly find it's worth £100 in a few weeks or months or years!

Slow and easy does it, imho

shazkhan111

Thanks all.

I am doing this for the long term, so selling charges are not a concern at this point or in the near future.

My thinking is by buying into 3 shares i can diversify (a bit). If I put £300 in to one share in 12 months I will have money only one company that may not perform.

Any other advice would be much appreciated as I look to do this over the next week.

grey_gym_sock

do you mean you're going keep putting £300 in the same 3 shares every month? so that if you kept doing this for a year, you'd have put £1200 in each?

if so, then i think you have the eventual selling charges under control. if you were only putting £100 total in each share, then i'd say the selling charges will probably be excessive, even if you keep the shares for a long time.

shazkhan111

yes, my plan is to do the former. so I will have £1200 in 3 companies in 12 months.

Just looking to see if barclays offer this service?