Advice for a beginner - Share dealing and ISAs

40w2000

Hi,

I'm looking for some advice. I have £40,000 in an ISA paying 2.23% interest which is set to fall to 1.49% in January 2014 so I'd like to start seeing a little more return on my savings.

I'm interested in investing in shares but there is so much information online it has started to fry my brain.

I think maybe a self-select ISA may be the best option for me but I'm unsure it is worth it if I only invest small amounts.

What is a worthwhile amount to invest per trade? If I only invest a few hundred pounds at a time is it really worth it?

The most appealing accounts I've found are with The Motley Fool and Interactive Investor.

Thanks in advance for any advice.

westy22

You firstly need to decide what you want to invest in.

Funds (UTs and OEICs) or shares (single company shares, ETFs or ITs). You may want a mixture of both. Different platforms are cheaper to buy and hold depending on what you invest in.

The cheapest option for shares in unlikely to be the cheapest for funds.

You mention small amounts but are you intending to transfer some or all of your £40k cash ISA to S&S? Remember that is a one way street - you can transfer from cash to S&S but not the other way around.

40w2000

Thanks for the reply. I think I'll leave my 40k where it is for now. Once I have some experience then I'd think about moving some of it over.

I'd just like to experiment first. I only have a basic knowledge of single company shares and ETFs. But with so many charges on the accounts I've looked at I wondering if it's even possible to make return on a small investment of 1-2k, especially when splitting that amount between a few different stocks. Obviously I'd like invest more once I have a deeper knowledge of what I'm doing.

I'd love to hear people thoughts even if its just to tell me it's not worth investing.

westy22

Well, for shares, ITs and ETFs there is X-O http://www.x-o.co.uk

They charge £5.95 per trade and there are no admin / maintenance fees payable for having an account with them. It is a basic site but does what it says and is reliable.

Assuming 0.5% SDRT payable on your purchases (on shares and ITs but not on most ETFs) then you can keep your buying costs down to about 1% with purchases of £1,200 (SDRT 0.5% / £6 trade cost = 0.5%).

Archi_Bald

Try to walk before you start running. It's pretty obvious you don't know much about investing - nothing to feel bad about, all investors at some stage know nothing about it.

You should read lots before you decide what you want to invest in. If all you do want to invest is £1-2K, shares should be the last thing on your shopping list, unless you can accept massive risk. You would most likely be better off with a fund, possibly a tracker fund because this spreads your risk.

But you really need to start by reading - have a look at this thread for suggestions. https://forums.moneysavingexpert.com/discussion/4752194

BLB53

But you really need to start by reading - have a look at this thread for suggestions. http://forums.moneysavingexpert.com/...4752194&page=1

Just a couple of updates to the list. New beginners book by Andy Bell (CEO at AJ Bell/Sippdeal - now rebranded as 'youinvest') "The DIY Investor" reviewed recently on diy investor uk
http://www.diyinvestoruk.blogspot.co.uk/2013/10/the-diy-investor-new-book-review.html

Also new edition of Tim Hale "Smarter Investing" now available. Recently reviewed on Monevator
http://monevator.com/tim-hales-smarter-investing-whats-new/

But for free, read some of the articles on both blogs to get more of a feel for how you want to take things forward.

40w2000

I'll have a read through those. Thanks for the advice everyone.

kidmugsy

If you want to leave your £40k alone, but experiment a bit with investments, look at p45 here.
http://www.theaic.co.uk/sites/default/files/statistics/attachment/AICStats31Oct2013.pdf

Marazan

westy22 wrote: »

You firstly need to decide what you want to invest in.

Funds (UTs and OEICs) or shares (single company shares, ETFs or ITs). You may want a mixture of both. Different platforms are cheaper to buy and hold depending on what you invest in.

The cheapest option for shares in unlikely to be the cheapest for funds.

You mention small amounts but are you intending to transfer some or all of your £40k cash ISA to S&S? Remember that is a one way street - you can transfer from cash to S&S but not the other way around.

Before deciding what they want to invest in they need to decide what time frame they are looking to invest for, as that has a profound effect on what is and isn't a sensible investment.