First time investor help

LisaLJ

Hi all,

I'm researching opening a S&S ISA, as I want to try and get better returns than on a cash ISA and was looking for some advice.

I'm thinking of going down the index tracker route to begin with. Is that more sensible to a first time investor?

Vanguard is a name that keeps popping up in my research but does seem to include higher fees, so are they worth the additional expense? If so, would a Vanguard LifeStrategy fund be better than individual ones?

Or are non Vanguard's more appealing cost/return wise? I know it's all dependant on many factors but I'd just like an overall impression from people who know more than me at the moment.

On a side note...does anyone think the Halifax S&S Self Select ISA fees are reasonable for someone looking to probably invest in trackers? I've not quite made head nor tail of how much it would cost exactly as yet.

Sorry if this doesn't make much sense but I have a heavy cold. Hope I didn't mess up my cash ISA transfer that I've just done online!

Thank you,

Lisa

decrement

Hi

Index trackers are good when you want to passively invest with minimal on going charges.

The actual fees you pay will vary on which provider you go with. Some like Hargreaves Lansdown will charge £2 pm on top of the annual fee.

I think the vanguard are good especially if you want diversification from their lifestyle funds without the hassle of picking them yourself.

Have a read here to get you started:

http://monevator.com/category/investing/passive-investing-investing/

LisaLJ

decrement wrote: »

Hi

Index trackers are good when you want to passively invest with minimal on going charges.

The actual fees you pay will vary on which provider you go with. Some like Hargreaves Lansdown will charge £2 pm on top of the annual fee.

I think the vanguard are good especially if you want diversification from their lifestyle funds without the hassle of picking them yourself.

Have a read here to get you started:

http://monevator.com/category/investing/passive-investing-investing/

Thanks for the reply and link. I've been over that website a few times already before and found it very useful.

Yes, HL's £2 charges are a bit of an expense but then it all depends on how much I invest really to calculate it as a percentage.

I'll keep researching!

webnibbler

LisaLJ wrote: »

I'm thinking of going down the index tracker route to begin with. Is that more sensible to a first time investor?

Index trackers are a sensible approach and not just for first time investors. That was my view too and the Vanguard LifeStrategy funds really appealled. Although they are fractionally more expensive you get the automatic rebalancing which takes away the emotional challenge of selling your rising investments to buy your less performing ones.

My strategy is to use the LS80% as a core fund of around 50% and to add diversifying property and commodity funds around it. Maybe a few racier funds too. This, of course, isn't advice and the LS funds really stand well on there own for a first time investor.

decrement

LisaLJ wrote: »

Yes, HL's £2 charges are a bit of an expense but then it all depends on how much I invest really to calculate it as a percentage.

Yes exactly the size of the funds need to be considered when you look at fees.

I'm doing something similar to webnibbler by investing about 50% in vanguard 80% then using other funds to build my portfolio. My total fund is small so it's a bit prohibitive at the moment to only be in trackers give the £2 monthly fees.

As the funds grow ill switch across to trackers.

tushingham

Hi Lisa
If you're looking at index/tracker investing then you could consider Tim hales book Smarter Investing. There's a thread on it at the moment. See if you can get it from the local library. It might answer some of your questions and is a good read. It also talks about risk. I think this is an area all new investors should look into.

In terms of costs around trackers. Have you come across RDR or platform review? Lots about it on monevator or search the forum here. It's pretty much up in the air at the moment and there are a number of factors to consider along with cost before choosing the provider for your funds.

Apologies if that's all a bit basic

T

LisaLJ

webnibbler wrote: »

Index trackers are a sensible approach and not just for first time investors. That was my view too and the Vanguard LifeStrategy funds really appealled. Although they are fractionally more expensive you get the automatic rebalancing which takes away the emotional challenge of selling your rising investments to buy your less performing ones.

My strategy is to use the LS80% as a core fund of around 50% and to add diversifying property and commodity funds around it. Maybe a few racier funds too. This, of course, isn't advice and the LS funds really stand well on there own for a first time investor.

Thanks for that. I think initially I should keep it as simple as possible. No point running before I can walk. Although over the last few months I have learnt a lot more than I ever thought I would.

LisaLJ

tushingham wrote: »

Hi Lisa
If you're looking at index/tracker investing then you could consider Tim hales book Smarter Investing.

Have you come across RDR or platform review.

Apologies if that's all a bit basicT

Thank you. I saw that book mentioned somewhere but have not read it, so maybe I shall look into it a bit more.

Yes, RDR did come up in my research and its another reason why I haven't jumped straight in. I guess there will always be one reason or another to stop someone taking the plunge and eventually I will just have to go for it.

Nothing is basic to me! All replies and ideas gratefully received.

tushingham

LisaLJ wrote: »

Thank you. I saw that book mentioned somewhere but have not read it, so maybe I shall look into it a bit more.

Yes, RDR did come up in my research and its another reason why I haven't jumped straight in. I guess there will always be one reason or another to stop someone taking the plunge and eventually I will just have to go for it.

Nothing is basic to me! All replies and ideas gratefully received.

I think the book is worth a read and will address some of the issues you've raised.

You're absolutely right that you will just have to go for it. You can research these things to death but eventually need to take the plunge and have a go.
If, for instance, you were to decide to invest a small/reasonable amount in Vanguard Lifestrategy X% on Hargreaves Lansdown either as an initial lump sum or small, regular investment then I don't think that would be crazy and would allow you to dip your toe in the water.
Equally you shouldn't be too surprised if the value fell soon after you invested given where prices are at present. That's why I mentioned reading around risk.

Once you've done your research and have an idea of your strategy then go for it. Best of luck!

t

ps- the above assumes you've armed yourself with the usual initial knowledge around investing that you can find on monevator and these boards. I'm no expert so continue to DYOR!