Help with choosing ISA platform

steven101_2

I have made some cut backs and I can save around 700-800ppm, which I want to invest in a stocks and shares ISA for the long term. I plan to invest it in the HSBC FTSE all-share fund.

I cannot decide however, which platform it would be best to invest this money. I currently have an account with tddirectinvesting, so this would be easiest. However, as I hope to build a large amount over the years (I am in early 30's), I would like to make sure I have it in the lowest cost option available. I guess this would be a platform with a fixed charge instead of a percentage? Any recommendations? Thanks!

dunstonh

Do you need a platform for a single investment fund? (which isnt good quality investing by the way)

steven101_2

From the mse ISA guide it looks like I need a platform, but I would happily be corrected?

Also, the reason I have chosen to put all my money into this fund is due to Warren Buffetts advice to "own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 (replace with FTSE for UK) index fund will achieve this goal". I have chosen the all-share to maximise my range. I also have money invested in an emerging markets actively managed fund. Would I be better going for a range of funds?

dunstonh

From the mse ISA guide it looks like I need a platform, but I would happily be corrected?

I wouldnt rely on an unregulated site like MSE to give you accurate information. Especially given its poor track record with regulated investment products.

You do not need a platform

Also, the reason I have chosen to put all my money into this fund is due to Warren Buffetts advice to "own a cross-section of businesses that in aggregate are bound to do well. A low-cost S&P 500 (replace with FTSE for UK) index fund will achieve this goal".

Warren Buffett comments relate to the US market and do not translate the same to the UK market (funds are taxed differently in the US). Plus, he does not actually invest the same way he tells others to.

However, that was not my point. 100% into UK equity is a high risk approach (loss potential of 50%) with your assets on one market. Do, you think Germans or Americans think they should invest 100% into UK Equity?

The UK stockmarket historically underperforms it's comparable markets. So, why do you think the UK stockmarket is the best option?

I also have money invested in an emerging markets actively managed fund. Would I be better going for a range of funds?

Either select a multi-asset fund to give you controlled diversification or use a selection of single sector funds to match your chosen asset allocations. The latter being more suitable for larger amounts invested.

The issue isnt managed vs tracker. It is where you invest.

grey_gym_sock

dunstonh wrote: »

100% into UK equity is a high risk approach (loss potential of 50%) with your assets on one market. Do, you think Germans or Americans think they should invest 100% into UK Equity?

i agree it's better to diversify across different markets.

if you're reading advice from americans, it's worth noting that the US stock market represents almost 50% of the total in world stock markets, whereas the UK market is less than 10% - so it is perhaps less foolish (though still a bit foolish) for US investors to stick to the US than for UK investors to stick to the UK.

The UK stockmarket historically underperforms it's comparable markets.

does it? which are comparable markets? i thought the UK market had given 1 of the best rates of return (for stock markets in a single country) over the last 100 years (c. 5% p.a. real total return).

this is more of an idle question, because whether the UK market has done better or worse than average in the past, that tells you nothing about which markets will do well in the future. so diversity is the key.

dunstonh

does it? which are comparable markets? i thought the UK market had given 1 of the best rates of return (for stock markets in a single country) over the last 100 years (c. 5% p.a. real total return).

Not much point looking further back than the last 20-30 years as the UK and global markets are very different.

Out of the 23 major indexes, the FTSE100 (to Oct 13) was....
last month 23 out 23
last year 18 out of 23
last 5 years 16 out of 23
last 10 years 19 out of 23.

That excludes dividends but then all indexes do.

Over the 10 year period, the worst index was the CAC40 with 23%. The best was Mexico IPC with 414%. The FTSE100 was 51.4%. Median was 86% and average was 104%.

This is more of an idle question, because whether the UK market has done better or worse than average in the past, that tells you nothing about which markets will do well in the future. so diversity is the key.

True. UK in 1914 is very different to now. The World in 2014 is very different to 1984. So, you have so many differences and unknowns going forward. So, sticking to one equity index is a greater risk than looking at say a global equity index.

Although the OP is still going to need to be prepared for the possibility of losing half their value in a major market event. Not many have that level of risk tolerance.

grey_gym_sock

certainly the world now is very different to 1914. i'm not sure that restricting your view to the last 20 or 30 years helps, though, because the world will change again.

i'd only use the 100-year view to give a general idea of the diversity of possible outcomes in different countries. real returns can be as high as 6% p.a., or as low as under 2% p.a. (and that's excluding communist revolutions, where investors lost 100% ).

do returns over the last 10 years have any predictive power for returns over the following 10 years?

Jevvers

Back to the platform question though - I am also interested and I AM looking to diversify across diff markets and asset classes so I would be keen to hear platform advice.

Archi_Bald

Check post 1 in this thread: https://forums.moneysavingexpert.com/discussion/3153942

jimjames

dunstonh wrote: »

Not much point looking further back than the last 20-30 years as the UK and global markets are very different.

Out of the 23 major indexes, the FTSE100 (to Oct 13) was....
last month 23 out 23
last year 18 out of 23
last 5 years 16 out of 23
last 10 years 19 out of 23.

That excludes dividends but then all indexes do.

Does excluding dividends give the UK market an unfair disadvantage? From what I though the UK dividend rate has historically been much higher than elsewhere so much of the compounded return would be lost ignoring dividends.

kidmugsy

steven101 wrote: »

I cannot decide however, which platform it would be best to invest this money.

The monevator blog gives excellent comparisons of platforms AND discussions of how to do passive investing.