investing in shares and stock Isas

goody23

hi,
Guys i have some money in premium bonds and about £12,000 in a cash isa with first direct which is paying me peanuts in interest i am thinking of getting a shares and stock isa...which companies do you suggest and can i have easy access to my money in an emergency?... Also i am thinking of investing in a mutual fund i was reading about fundsmith giving quite good returns should i do a lump sum or a monthly contribution ..Thanks

Linton

You are strongly advised to have a significant amount of cash saved before you start investing seriously - a reasonable figure is 6 months living expenses. The reason is that in an emergency you can sell your investments but it is possible that at that time you could get less than you paid for them.

For the same reason, you need to accept that investing is for the long term - dont plan on selling for at least 5 years or preferably much longer. So if you are going to need the money in 5 years or less keep it in your ISA: not good returns but at least it will all be there when you need it.

Fundsmith in my view isnt a completely foolish fund in which to invest for a new investor as it focuses on a wide range of large healthy multinationals. However the number of companies it holds is fairly low, and remember the banks were large healthy multinationals right up to 2007. Also, dont rely on Fundsmith continuing to get the returns it has achieved since it started three years ago - the type of companies in which it invests have in general performed unusually well in recent years.

A more mainstream initial investment is a broad balanced global fund.

If you have a large pot of other cash to provide the 6 months cover I would suggest you put all the cash ISA into investments as a lump sum and then drip feed a steady amount from excess income.

Are you contributing to a pension? You need to get that sorted out before you start investing elsewhere.

doe808

Reported as Spam

Archi_Bald

doe808 wrote: »

Reported as Spam

why????????

jimjames

Archi_Bald wrote: »

why????????

There was another post above that has now been removed. Poster had pasted same message on a number of threads

goody23

how can it be spam when i asked for some advice...i never posted anywhere else

goody23

doe808 wrote: »

Reported as Spam

how so....

Ifts

goody23 wrote: »

how so....

Don't worry doe808's post was not a reply to your post.

goody23 wrote: »

how can it be spam when i asked for some advice...i never posted anywhere else

doe808 was replying to a spam post that was above theirs (spam post has now been removed by MSE staff) where the spammer was trying to get you to private message them about some amazing returns that they were promising you - more like trying to fleece you.
The spam poster (not you!) also put duplicate postings of the same spam post on other threads too.

goody23

Ifts wrote: »

Don't worry doe808's post was not a reply to your post.



doe808 was replying to a spam post that was above theirs (spam post has now been removed by MSE staff) where the spammer was trying to get you to private message them about some amazing returns that they were promising you - more like trying to fleece you.
The spam poster (not you!) also put duplicate postings of the same spam post on other threads too.

ok thanks sorry

kidmugsy

goody23 wrote: »

hi,
Guys i have some money in premium bonds and about £12,000 in a cash isa with first direct which is paying me peanuts.

(i) Transfer the Cash ISA to a provider who pays higher interest. The big deal is NOT to withdraw the money; complete a form from the new provider and let them do all the rest.

(ii) If you are bored with premium bonds then by all means either (a) switch some money to an interest-bearing current account (e.g. Santander, Nationwide, Lloyds …), or (b) if you are happy to tie the money up for years, open an S&S ISA.


(iii) Rather than a monthly contribution, how about using Firstdirect's regular saver, and then putting the money into an investment each year when the account matures? You might as well take advantage of the 6% interest rate.