Regular investments

Jd2015

Ok I'm a bit confused by this investment malarky so need a little help :rotfl:

I want to start making small investments every month (£25-£50) this year. I plan to then start moving it up so over the next few years investing upwards of £300 every month but I need to get the ball rolling. I initally plan to invest in funds and Cavendish Online as my provider.

I have tried to look into different investment websites etc but getting confused by the technicial jargon and cant seem to find the answers on their websites so I thought I'd ask here.

So my questions that I'd really appreciate if someone could help answer:
1) Can I invest in this manner?
2) Do I have to fix the amount I invest monthly or can it be flexible?
3) Do I have to invest all in one fund/is there a minimum for each fund?
4) How often can I change this selection?
5) If I needed to take the money out to pay for an emergency what would I be charged?

I probably have more questions but that'll do for now lol Also if you have any overall thoughts/opinions on my plan to invest in this manner or Cavendish Onlinein general please feel free to share.

General info: I'm 31 married with two children if it makes any difference.

ps feel free to answer as many or as few of my questions as you feel comfortable answering.

Many thanks
Jd

westy22

Assuming you use a S&S ISA held on the Fidelity platform through Cavendish:

Yes, you can make small monthly investments
You would normally set up a regular monthly DD amount to one or more funds
Each fund has a minimum monthly - it varies by fund but can be easily seen on the factsheet for each fund
You can change where your monthly money is invested (normally a notice period is required)
If you sell some of your fund to cover an emergency then the money is normally back in your bank account within about 7 days - no charge from Fidelity.

dunstonh

1) Can I invest in this manner?

Yes. Regular payments are possible. Most have a minimum of £50pm but a few will go to £25.

2) Do I have to fix the amount I invest monthly or can it be flexible?

Fix at that level. To be honest, if you cant afford to fix an amount then you shouldnt be doing it yet. Instead increase the amount you have in savings.

3) Do I have to invest all in one fund/is there a minimum for each fund?

You would be daft to use single sector funds on an investment of this size. A single multi-asset fund is common sense.

4) How often can I change this selection?

daily

5) If I needed to take the money out to pay for an emergency what would I be charged?

The money should not be your emergency fund. it should be incremental to that. However, most do not charge on exit but a small number will.

As you appear to have already chosen your provider, it seems strange to be asking these questions. Normally you filter your needs and requirements first and pick the provider to match them. Not the other way around.

atush

your emergency fund should be in cash, not investments.

In case your emergency coincides with a market fall.

Do you have pensions?

Jd2015

dunstonh wrote: »

Fix at that level. To be honest, if you cant afford to fix an amount then you shouldnt be doing it yet. Instead increase the amount you have in savings..

I asked the question in order to help determine the amount I choose to invest regular. I.e. if I choose too low is it easy to top?! If I couldnt afford a fixed amount of course I wouldnt do it.

dunstonh wrote: »

You would be daft to use single sector funds on an investment of this size. A single multi-asset fund is common sense...

Again my question was aimed at the top end, I want to spread my investment as wide as possible I.e. with £50 per month how far could I spread it?!

dunstonh wrote: »

The money should not be your emergency fund. it should be incremental to that. However, most do not charge on exit but a small number will..

Again this question was aimed at me trying to understand fully how this type of investment plan would work for me. At some stage I will want/need to take money out and so I want to understand what that involves. I do not intend for it to be my emergency fund in fact I dont intend to withdraw any amount from for 20+ years.

dunstonh wrote: »

As you appear to have already chosen your provider, it seems strange to be asking these questions. Normally you filter your needs and requirements first and pick the provider to match them. Not the other way around.

At the very end of my post I ask for opinions on Cavendish in an attempt to guage if , in others opinion, their services suit my requirements. At the start of my post you will also notice I said I am a little confused by all this but I am trying to gain a better understanding. I hoped that would be taken into account by anybody responding.

Many thanks
Jd

Jd2015

atush wrote: »

your emergency fund should be in cash, not investments.

In case your emergency coincides with a market fall.

Do you have pensions?

Thanks for the response.

I have a separate emergency fund, I asked the question because you never know when I'll need to lift money out of my investment and I thought it best to ask to gain a full understanding.

As I said above I dont intend to take any money out for 20+ years.

We have work pensions just. Normal sort of ones, we put in 3% and they match it.

dunstonh

Again my question was aimed at the top end, I want to spread my investment as wide as possible I.e. with £50 per month how far could I spread it?!

There is absolutely no point spreading £50 across single sector funds. It is unnecessary and pointless. Lets say your asset allocation has 3.8% for Japan. That is £1.90 on your £50. Are you really going to research all the single sector funds to decide how many pounds going into each? This is why multi-asset funds would be better and more suitable.

atush

Jd2015 wrote: »

Thanks for the response.

I have a separate emergency fund, I asked the question because you never know when I'll need to lift money out of my investment and I thought it best to ask to gain a full understanding.

As I said above I dont intend to take any money out for 20+ years.

We have work pensions just. Normal sort of ones, we put in 3% and they match it.

I would then consider putting more of your spare cash (not all) into a pension. 6% is low. But of course, better than nothing.

Jd2015

dunstonh wrote: »

There is absolutely no point spreading £50 across single sector funds. It is unnecessary and pointless. Lets say your asset allocation has 3.8% for Japan. That is £1.90 on your £50. Are you really going to research all the single sector funds to decide how many pounds going into each? This is why multi-asset funds would be better and more suitable.

Maybe I have confused you with my lack of ability to speak in the technical terms (again I refer to my first post so go easy).

To be clear I want to invest around £50 every month in a number of funds. When I say funds here I mean products that contain a diversified number of shares across a number of sectors. With my low starting point I am wondering how many of these types of products I can invest in. To me 4-5 sounds like a decent number but I imagine 2 might be my max.

I plan to research specific funds/products as well as I continue to gather knowledge.

Jd2015

atush wrote: »

I would then consider putting more of your spare cash (not all) into a pension. 6% is low. But of course, better than nothing.

Would an investment ISA (or similar) not offer more flexibility than a SIPP?

The flexibility appeals to me because at some point in the future I may decide I can get a better return on my money doing X,Yor Z and I assumed (perhaps incorrectly?!) that a SIPP would be more locked in than just normal investments but would also double as saving for retirement at the same time should I not decide to use my money in other ways.

Basically I assumed it was the best of both worlds to use an investment instead of SIPP - savings for retirement but left door open to use money to start my own business should I decide to etc

Hope that makes sense

AndyT678

Jd2015 wrote: »

Maybe I have confused you with my lack of ability to speak in the technical terms (again I refer to my first post so go easy).

To be clear I want to invest around £50 every month in a number of funds. When I say funds here I mean products that contain a diversified number of shares across a number of sectors. With my low starting point I am wondering how many of these types of products I can invest in. To me 4-5 sounds like a decent number but I imagine 2 might be my max.

I plan to research specific funds/products as well as I continue to gather knowledge.

I suspect dunstonh is trying to prod you towards the conclusion that you don't need 4 or 5 funds without giving any response that could be construed as formal "advice".

You need 1 fund that contains all the things that you need for a small, diversified investment. These already exist. Look at Vanguard Lifestrategy or L&G multi index as a starting point.