Advice for entering the S&S ISA world

shicky

BLB53 wrote: »

Sound like you have read quite a lot - you appear to have the basics of a good plan - I agree with 100% equity in the early years for the best returns - its now just a case of backing your intuition and putting the plan into action!

Charles Stanley would be a good platform to start off as their fees are only 0.25% compared to Hargreaves 0.45%. AJ Bell are cheaper at 0.20% but they charge £4.95 to buy funds so this will not work so well if you are drip-feeding.

Go for the low cost, diversified equity funds - Vanguard (VEVE) charges 0.15%, Legal & General is even cheaper - their LS100 is a bit more expensive.

Monevator is great for passive investing guidance/articles so I do not think you would go far wrong. Also check out the diy investor uk article on advice to his 21 yr old self - covers a lot of what you are planning to do. Also the Retirement Investing Today site is worth a look if you have not done so already.

Good luck, keep it simple and don't over analyse!

Thank you for the comments BLB53. Vanguard seems to be very popular here, is this what you invest in also? I normally see it recommended but little actually invested in it from the people saying its the greatest thing on offer.

Yes I've devoured A LOT of Monevator and MMM, less so of RIT but a little bit. I caught the article in question and I seem to be hitting everything he recommends, I'm just missing the definitive investment in funds of my choice as I'm still a little lost on how I become confident in these.

jimjames

shicky wrote: »

Thank you for the comments BLB53. Vanguard seems to be very popular here, is this what you invest in also? I normally see it recommended but little actually invested in it from the people saying its the greatest thing on offer.

Yes I've devoured A LOT of Monevator and MMM, less so of RIT but a little bit. I caught the article in question and I seem to be hitting everything he recommends, I'm just missing the definitive investment in funds of my choice as I'm still a little lost on how I become confident in these.

I think vanguard is often suggested for new investors as it makes the process so much simpler but many of those making suggestions are experienced investors that may use more complex setups themselves. That doesn't mean it's a bad suggestion but much easier way to get started.

noggin1980

shicky wrote: »

thank you very much for the response, it's certainly food for thought. I'd considered going vanguard but from what I picked up in Hale's book it seemed you could get an additional 1-2% from 'better' picks. This of course comes with the added risk though

In what way? my choices are already pretty aggressive being 100% equities and having a little extra in emerging markets and small companies. I read his book too.

Vanguard are the biggest seller of index funds in the world and were the ones that introduced passive investing to the market, it is the case that this has meant Vanguard have fans and in any sort of tie break between two funds will lean to the vanguard one, after all if you are choosing between a vanguard and fidelity fund and can't decide do you go with the company who brought the index trackers to market or the one who rubbished the idea and tried to crush it?

It is probably the case that I could have done slightly better with my emerging markets pick, but I was you a few months ago, had done my research, knew what I wanted and was struggling to take the plunge and make my final picks. I allowed myself the simplicity of choosing from one fund provider for all 4 funds since it vastly reduced the otherwise ridiculous number of choices, it was a company I trusted and I knew they were the top 1 or 2 choices for at least 3 of the funds I wanted.

You could copy (and thats not far off what I did) the slow and steady portfolio from monevator and remove the 28% in bonds to increase the risk and potential reward.

http://monevator.com/the-slow-and-steady-passive-portfolio-update-q4-2014/

I also removed the property due to owning a house and a buy to let property but I am considering adding it in.

noggin1980

jimjames wrote: »

I think vanguard is often suggested for new investors as it makes the process so much simpler but many of those making suggestions are experienced investors that may use more complex setups themselves. That doesn't mean it's a bad suggestion but much easier way to get started.

I think there is a bit of confusion here between buying Vanguard index funds in general and buying their lifestrategy fund of funds in order to build a simple 1 product solution portfolio.

There is nothing more simple or inferior about a Vanguard ftse all share index tracker over another companies one

BLB53

Thank you for the comments BLB53. Vanguard seems to be very popular here, is this what you invest in also? I normally see it recommended but little actually invested in it from the people saying its the greatest thing on offer.

If you have decided to go for trackers, then Vanguard are probably the biggest and best and possibly lowest cost so you will not go far wrong.

I have been investing for many years and started out with investment trusts as there were no low cost trackers. I still hold ITs for income - City of London, Edinburgh etc. and they have done a good job for me over the years. I have also held several individual shares for many years - Unilever, Sky, Billiton, Glaxo for example.

I also hold several Vanguard trackers - the global developed world (VEVE), UK Index (FTSE All Share), and their UK Equity Income fund - I also hold their All World High Yield ETF for diversified income.

Obviously for those who do not need income such as yourself, some of these would not be appropriate investments. I would therefore start of with Vanguard trackers - probably the UK Index (Acc) and a more diversified global tracker.

Just be aware however that equity markets are very up and down and you will only get the better returns over the longer periods - I would say 10+ years so you need to stick with it and keep the faith during the down years!

Ainsley1

There has been much thought as to whether to invest in pensions or ISAs. With employer contributions and up front tax relief and final salary schemes and SIPPs they seem to have won a bit but ISAs generally have more flexibility.
Why do I mention this? Recent budgets are making pensions more flexible as well as ISAs but also the maximum pension pot is being reduced. It still seems a large amount but that is probably untrue especially for those with good incomes and prospects - that you seem to have. Do factor this into any considerations. ISAs currently do not have that limitation so might be more appropriate than a SIIP. You need to do a few predictive sums!

MrLeek

noggin1980 wrote: »

I was in your position and went with charles stanley direct and have been really happy with them, I've e-mailed a couple of times with questions and got a reply within 5 mins and used their website message service to ask them a question twice and got an answer in a few hours both times.

Really interesting to read good things about Charles Stanley Direct - a lot of my reading currently is looking at the different providers. How easy is to find information on their website (stuff like that). Look like a potential option for me, especially if they're happy to respond to dumb questions!

noggin1980

MrLeek wrote: »

Really interesting to read good things about Charles Stanley Direct - a lot of my reading currently is looking at the different providers. How easy is to find information on their website (stuff like that). Look like a potential option for me, especially if they're happy to respond to dumb questions!

They responded quickly and very nicely to my dumb questions without making me feel dumb and while making me feel I could ask more, it was the same member of staff who replied to me by e-mail each time though so it's always possible I just got a good one.

I've not used anyone else to compare them with but I've found their website to be good. I don't think you need to log in to see their information so you can see without signing up.

for instance this is the info on a vanguard lifestrategy fund.

https://www.charles-stanley-direct.co.uk/ViewFund?Sedol=B4KWNF9&Isin=GB00B4KWNF91&PreviousSearchResults=%2FInvestmentSearch%2FSearch%3FSearchText%3Dvanguard

seems to be good info to me and with links to the fund factsheets etc too.

shicky

noggin1980 wrote: »

In what way? my choices are already pretty aggressive being 100% equities and having a little extra in emerging markets and small companies. I read his book too.

Vanguard are the biggest seller of index funds in the world and were the ones that introduced passive investing to the market, it is the case that this has meant Vanguard have fans and in any sort of tie break between two funds will lean to the vanguard one, after all if you are choosing between a vanguard and fidelity fund and can't decide do you go with the company who brought the index trackers to market or the one who rubbished the idea and tried to crush it?

It is probably the case that I could have done slightly better with my emerging markets pick, but I was you a few months ago, had done my research, knew what I wanted and was struggling to take the plunge and make my final picks. I allowed myself the simplicity of choosing from one fund provider for all 4 funds since it vastly reduced the otherwise ridiculous number of choices, it was a company I trusted and I knew they were the top 1 or 2 choices for at least 3 of the funds I wanted.

You could copy (and thats not far off what I did) the slow and steady portfolio from monevator and remove the 28% in bonds to increase the risk and potential reward.

http://monevator.com/the-slow-and-steady-passive-portfolio-update-q4-2014/

I also removed the property due to owning a house and a buy to let property but I am considering adding it in.

In what way may you get better performance? I assumed this was due to Vanguard encapsulating more of the market with some of their funds, therefore a more risky selection could eek out more rewards?

Thanks for the additional info, I wasn't aware of what Fidelity had done in relation to Vanguard, it's certainly interesting! Its funny you mention the slow and steady passive portfolio, I've looked at it numerous times but from memory returns didn't seem great but as you mention you can use it as a base and tweak. I may build a few examples without investing just to get a feel for things

jimjames

noggin1980 wrote: »

I think there is a bit of confusion here between buying Vanguard index funds in general and buying their lifestrategy fund of funds in order to build a simple 1 product solution portfolio.

There is nothing more simple or inferior about a Vanguard ftse all share index tracker over another companies one

Absolutely. I have Vanguard trackers in my portfolio that were previously HSBC ones but since RDR the Vanguard ones work out cheaper.