First-time investor

MyLastFiver

konstantinovs wrote: »

Thanks for the advice guys, it really helped.

I'll take a look at the Vanguard LifeStrategy funds. I was reading on theInternationalInvestor website about how funds need to be bought through both fund supermarkets and discount brokers. Does this apply to the vanguard ones then?

I think I'm quite a risk averse person. The £1000 figure I was throwing about is a sum that I wouldn't be distraught over if I were to lose it. So I can quite easily put in another £1000 in a few months time, once I'm familiar with the general set up etc.

If you are risk-averse, are you sure that investing in equities is for you? Look again at Hale and consider the length of time you are prepared to let your investments run (ie how long until you need the money) and what proportion of your overall wealth will be going into this investment.

Another route to consider is high-income paying funds, which may trade off some capital growth for the likelihood of a decent yield, thus "smoothing out" some market volatility.

Likewise, retail bonds offer (notionally) less risk but will still produce returns better than you can get in a high street bank.

If I remember rightly, your initial idea was to buy with £1000 into a World Index tracker, then consider what to do with your next £1000. The thing about investing a lump sum, rather than a regular monthly sum, is that it makes market timing that much more important. With a World Tracker, I would be considering the US "fiscal cliff" and the implications for the US (and world) economy. Expect a return to recession in 2013 Q1. Expect this to be deep if Romney wins the election. I would be considering the ongoing Eurozone debt crisis, and taking a view on whether "austerity" is having the desired effect. I would be considering stalling growth and rising inflation in China, and its knock-ons for suppliers of minerals; particularly Australia and its lop-sided economy and over-bought mining sector... blah blah blah.

I am not convinced that now is the time for a one-off punt on the world economy. But this is just an opinion, and others will disagree!

konstantinovs

MyLastFiver wrote: »

If you are risk-averse, are you sure that investing in equities is for you? Look again at Hale and consider the length of time you are prepared to let your investments run (ie how long until you need the money) and what proportion of your overall wealth will be going into this investment.

I guess I should've said that I'm relatively risk-averse. I don't think I'll ever be putting more than half my savings into investing. Also, my time horizon is quite far in the future to be honest, I'm still young.

Another route to consider is high-income paying funds, which may trade off some capital growth for the likelihood of a decent yield, thus "smoothing out" some market volatility.

Likewise, retail bonds offer (notionally) less risk but will still produce returns better than you can get in a high street bank.

I'll probably go for a bog-standard mix of equities tracker with fixed income tracker.

If I remember rightly, your initial idea was to buy with £1000 into a World Index tracker, then consider what to do with your next £1000. The thing about investing a lump sum, rather than a regular monthly sum, is that it makes market timing that much more important. With a World Tracker, I would be considering the US "fiscal cliff" and the implications for the US (and world) economy. Expect a return to recession in 2013 Q1. Expect this to be deep if Romney wins the election. I would be considering the ongoing Eurozone debt crisis, and taking a view on whether "austerity" is having the desired effect. I would be considering stalling growth and rising inflation in China, and its knock-ons for suppliers of minerals; particularly Australia and its lop-sided economy and over-bought mining sector... blah blah blah.

Good points, thanks The reason I was thinking about the lump sum idea was because I was leaning more towards ETFs than funds and wanted to keep trading costs down. But after doing more research on the details, it seems funds may actually be easier to deal with!

I am not convinced that now is the time for a one-off punt on the world economy. But this is just an opinion, and others will disagree!

Thanks for the advice!

severt43

konstantinovs wrote: »

I've done some research on the fund brokers, was thinking of going for Cavendish. Seems to be amongst the cheapest and feedback seems relatively good. And since my investing strategy is fairly simple it should cover all my bases.

Hi i have used the following 3 fund brokers in the past 5-10 years, some more recently some not for a while
Hargreaves - found they provided a very good service, however they were expensive
Rplan- good service and website fee is reasonable
Cavendish very cheap, but the service is lacking, i dont know if this has been improved recently or anything
I think it is worth shopping around most of the websites allow you to create portfolios without buying anything so find out how much each would charge etc
worth spending time over, horrible when you could have saved money on fees!
Sev

Jegersmart

MyLastFiver wrote: »

If you are risk-averse, are you sure that investing in equities is for you? Look again at Hale and consider the length of time you are prepared to let your investments run (ie how long until you need the money) and what proportion of your overall wealth will be going into this investment.

Another route to consider is high-income paying funds, which may trade off some capital growth for the likelihood of a decent yield, thus "smoothing out" some market volatility.

Likewise, retail bonds offer (notionally) less risk but will still produce returns better than you can get in a high street bank.

If I remember rightly, your initial idea was to buy with £1000 into a World Index tracker, then consider what to do with your next £1000. The thing about investing a lump sum, rather than a regular monthly sum, is that it makes market timing that much more important. With a World Tracker, I would be considering the US "fiscal cliff" and the implications for the US (and world) economy. Expect a return to recession in 2013 Q1. Expect this to be deep if Romney wins the election. I would be considering the ongoing Eurozone debt crisis, and taking a view on whether "austerity" is having the desired effect. I would be considering stalling growth and rising inflation in China, and its knock-ons for suppliers of minerals; particularly Australia and its lop-sided economy and over-bought mining sector... blah blah blah.

I am not convinced that now is the time for a one-off punt on the world economy. But this is just an opinion, and others will disagree!

I disagree with the above. I disagree with it because what one really needs to do is to study the performance of the area that you are considering. Yes, there is slow down in China but then equity indices there have dropped 30+% since early 2011.....Look at miners and natural ressources over the past 2 years, horrendous performance despite gold prices and so on. I have made 15% in 4 months on European funds because despite the huge problems the area was waaaay oversold in terms of equity performance.

You are right to look at and try to interpret fundamentals as you are doing now (I do too), but you *really* need to couple that with some price analysis!

all imho

J