Buying First Passive Tracker

grey_gym_sock

on preferring big / known names:

among fund managers, vanguard is c. 4th largest in the world by assets under management. blackrock is the biggest.

among platforms:

cavendish online are tiny, but are just a discount broker giving you access to fidelity's platform, and fidelity are both huge and (presumably) a familiar name. (is it knowing the name that matters, or size?)

OTOH, i think charles stanley direct are not part of any huge group.

newuser78

mgarl10024 wrote:

At this point, I get very lost, close down all the windows and do nothing for a month until something makes me have another try.

DiamondLil wrote:

Someone far more knowledgeable than me will be along soon; but, gawd, I can empathise with this.....

I am in exactly the same position - two months on! _pale_

bigfreddiel

Stick with td
Invest in four or five etf's
Rebalance once a year
Use one of the etf's lazy portfolios from monevator
Sit back and relax while your mates buy and sell as the market oscillates
Simples

fj

Tammer

Conrad wrote: »

I'm also paralysed by indecision.
My primary concern is around who holds your money.
Are these firms you mention safe if the world went into a severe global decline or something like a third world war compared to say the big names like Scot Widows that have come through many wars and downturns but are still here?

.

Hi,
I wondered if you meant Scottish Widows, part of the Lloyds banking group that is state owned as it had to be rescued by the Government in the last crisis?

I use Fidelity, via Cavendish. Fidelity is an enormous US company and did rather better in the last financial crisis than Lloyds. Maybe check them out.

mgarl10024

Hi,

First - thanks for all your helpful replies. It also looks like I'm not the only one who is overwhelmed!

I'll sum up my current thinking, and please chime in and correct at will!

Platform
Looks like most recommendations are for Charles Stanley over TD based on the 0.25% vs. 0.3% cost for holding funds.
Assume that all the funds cost the same (i.e. the same Vanguard fund costs the same price (per 'unit') through Charles Stanley as it does through TD), then there's a marginal saving (£7.50/yr if I went mad and put in £15,000).
To take kidmugsy's point, I do accept that there's little difference in it though. I read it as 'whether I go with TD or Charles Stanley, it is better to go with either than none'.
I'm now happy with this - I'll pick from these two, and it doesn't really matter which

Fund Manager
I was pretty settled on Vanguard, just because articles like http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/ and http://jlcollinsnh.com/2012/05/09/stocks-part-v-keeping-it-simple-considerations-and-tools/ are raving about how they're the only company to use.
I can't help but notice that many portfolios seem to contain Blackrock investments. Maybe they are more cost effective. Maybe it is different for these US authors.

Diversification
I think in the long term I'll probably stick to something akin to one of Tim Hale's portfolios - that is aimed at 100% global equities.
I (newly) understand the concept of home bias and I'm not sure that buying more UK that is proportional globally serves me.
Later on, I'll probably add some "return enhancers" in the form of small cap, value, and emerging, and perhaps allocate 10%ish to each.
As to defensive assets, given the lengthy timescales and my lack of reliance on this money at this time in my life, I was tempted to just go 100% equities and consider my BTL and cash reserves my "defensive assets".

For simplicity now, I'll simply go for something like FTSE Developed World ex-U.K. Equity Index Fund and will then rebalance with additional monies later.

I did initially look at something like LifeStrategy™ 100% Equity Fund but rejected it as the linked document would suggest that it is 25.3% exposed to the UK - which seems heavy. Happy to be turned around.

Index/mutual vs. ETFs.
This is the last hurdle really. A couple say funds, and one says ETFs. The trouble is that I don't really know why - what backs your thinking?
Am I right that ETF pricing can vary from the assets they hold so may/maynot be a good deal, are my fears about tax implications (even when holding within an ISA) grounded, or is it something else?
I'm currently leaning to funds, but I couldn't really articulate why, and this concerns me.

Huge thanks for all those who are helping me (and the others who are in the same situation).

JohnRo

mgarl10024 wrote: »

For simplicity now, I'll simply go for something like FTSE Developed World ex-U.K. Equity Index Fund and will then rebalance with additional monies later.

I did initially look at something like LifeStrategy™ 100% Equity Fund but rejected it as the linked document would suggest that it is 25.3% exposed to the UK - which seems heavy. Happy to be turned around.

I assume when you say rebalance you mean adding an allocation in the form of some UK fund or other to make up for the absence in the world ex-UK fund?

The fund itself does the rebalancing.

I wouldn't get too hung up regional allocations personally, I think they're somewhat flaky.

25%+ in a UK100 / all share index fund will include a healthy chunk of implicit eurozone / global exposure.

justme111

I was in the same situation when a year and a half ago after like a year of going through the same routine of getting annoyed with my not understanding I went through cavendish and had a few trackers set for a drip fed. From my understanding ETF's are more sensitive instrument than trackers , one would have to understand reasoning behind trading at different prices and process more information when investing. More knowledgeable people will correct me if I am wrong .