Long term investment advice

mvarrier

I've just had a baby (hurrah!) and would like to give him a small headstart in the future.

So, I am looking at min 18 years investment. The aim is growth. I don't have any S&S experience but have done a little reading (Monevator, MSE etc).

We will only have around £50-100/month due to other saving commitments and the need to be able to match investments for any future children too.

I was thinking of using a cheap, fund focused platform such as cavendish online or charles stanley direct and putting the total in to a Vanguard LS 80 or 100 (Acc) fund. This is for simplicity and the challenge of diversifying with small amounts.

I am interested if anybody has any constructive negative criticism of this strategy or alternative ideas.

Best wishes.

Kendall80

Sounds like a reasonable enough plan. One thing you may be overlooking is whether or not you want control of that account when your child becomes 18. A JISA is suitable if you dont mind relinquishing control. You can use your (or partners) ISA otherwise should you have any spare capacity available.

Mistermeaner

Sounds good

Only thing to think about is that I don't think a jisa has any advantage over an isa so may give you more flexibility and options to keep it as an isa earmarked for baby but still in your control. Cute baby may be a alcopop crazed meth addict at 18

mvarrier

Thanks.

You both make the same valid point. It had crossed my mind that doing things within my own ISA might be better/more flexible- certainly I won't be hitting my own max allowance anytime soon.

However, assuming 3 children...is there a way I can simultaneously run three lots of the same fund as separate pots?

talexuser

I did exactly that for my grandchild, after discussion with the parents, mum had unused isa allowance which would not be used in the near future, and they agreed the money was better under their control rather than totally handed over at 16 or 18, so it could go for university or first car, deposit on flat etc etc. The only downside of this strategy is that the money would be counted against the parents assets in the event of them needing any benefits. We reckoned this was not a scenario that was feasible so discounted it in our case.

I don't know how you could keep the same fund separate in the same name without using 3 different platforms, with different charging structures, unless you can find 3 platforms equally cheap.

I would just have 1 fund and keep an eye on the growth every year and then can make a guess at 3 equal splits at different maturity times, based on the growth. You could have a stockmarket correction between the first and the third, but this is the risk you take with funds in order to outperform savings.

atush

I'd look at a good general investment trust savings plan (either in an ISA or not). something like Foreign and Colonial, Witan etc.

Eco_Miser

mvarrier wrote: »

However, assuming 3 children...is there a way I can simultaneously run three lots of the same fund as separate pots?

See http://monevator.com/how-to-unitize-your-portfolio/ to make your own unitised fund from your single portfolio and record how many units you buy for each child. At the appropriate time 'cash-in' those units and give the child the current valuation.

Waldorf_Statler

I opted for JISA because:

1 - I can't get at it, so removes the risk of me buying that 911 carrera instead of funding a stint at college
2 - It keeps the fund distinct from another's child's fund
3 - Relatives can contribute without it affecting their ISA allowance

I am not sufficiently qualified to comment on the specific fund you might choose. My choices are rarely good, though never disastrous.

mvarrier

Thanks waldorf. That's what I have now done.

At least when my 18 year old is a crystal meth addict the JISA fund will mean a couple of months where they can stop stealing cars and prostituting themselves