Regular investments

Jd2015

AndyT678 wrote: »

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.

Thanks Andy

Yeah Ive seen this Vanguard Lifestrategy one mentioned lots of times and was one that I intended to do research on. I'll also look at the L&G too thanks for that.

I remember being taught that you should get your investments as diversified as possible which is why I assumed 4/5 would give me sufficient diversification but perhaps it's overkill if one fund is already suitably diversified. I imagine my small initial investments will mean I cant invest in more than 1/2 funds anyway.

The main point of the original question was to determine "can" I invest my small £50 investment in more than one? My follow up question would then have been "should" I invest in more than one? or what is considered optimal?

Many thanks
Jd

dunstonh

I remember being taught that you should get your investments as diversified as possible which is why I assumed 4/5 would give me sufficient diversification but perhaps it's overkill if one fund is already suitably diversified.

Diversification is the underlying investments you hold in the fund(s) you have selected. Not the number of funds.

As the L&G and VLS have been mentioned, I can follow on now and say that holding one of those gives you more diversification than 5 single sector funds.

Jd2015

dunstonh wrote: »

Diversification is the underlying investments you hold in the fund(s) you have selected. Not the number of funds.

Is it not both?!

i.e. one fund holds 20 underlying investments in various markets and another fund holds another 20 underlying investments in various markets, if I buy both am I not now much more diversified?

dunstonh

Jd2015 wrote: »

Is it not both?!

i.e. one fund holds 20 underlying investments in various markets and another fund holds another 20 underlying investments in various markets, if I buy both am I not now much more diversified?

Holding multiple multi-asset funds is fine. I frequently do that with smaller investments. Two different investment strategies for example. However, you are talking about £50pm. The L&G MI fund with its 14 or so underlying funds which are auto-rebalanced and invest far wider than you can ever do yourself is plenty good enough until you get to at least £10k (you can replace L&G MI with any other appropriate multi-asset fund).

You mention various markets. This is what a multi-asset fund does. However, if you pick 5 multi-asset funds with similar strategies (say both L&G MI and VLS) then you will have significant overlap.

atush

Jd2015 wrote: »

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

Pensions and S&S isas can basically hold the same types of investments. The point is, the tax wrapper and how that works with your plans.

if you put 80 into your isa, it is 80. If you put 80 into a Pension, it is 100.

Isas are more flexible, but also means they might be spent long before you want to retire which could delay things. So when you have more than 50 per month to go into investments, think about diverting some to a pension.

Jd2015

Great advice both. Thank you very much!

I will digest all that and do some more research but I'm sure I'll be back with more queries

Jd2015

I'm back with more

Lets assume I'm plannning to invest £50 per month into one or two funds. Assume £25 each into Vanguard Lifestrategy and L&G multi index to begin with if it helps. From Jan 16 it will £50 into each (£100 per month). Jan 17 will be £100 into each (£200 total)

I have heard that Cavendish Online was a good site to use for this,

1) Our Cavendish a good choice for this?
2) Any drawbacks with them
3) Any other providers I should consider?

AndyT678

Have a look here http://www.comparefundplatforms.com/home

plunt

think a lot of you have been a little harsh. he is just asking for some advise and I have seen far worse questions on these forums


Anyways one factor to also consider is if you are actually trying to get interested in the markets and investing. I find the highly diversified fund may be good in terms of financial investment but have smaller holdings keeps my interest far more! Yes this may come at a bit of a cost but as my portfolio grows I have learnt a lot of good and bad things when the sums were lower.


So really depends if you just want this as an investment you dont have to monitor much or one you can learn a lot from.

PS: a lot of the regular investment fund you can cancel after the first investment, so you could say do a couple months with 1/2 funds then the next couple months with another 1/2 funds and revert back again. This will be slow but gives you options!

atush

I think you are over sensitive.


I dont think any of the answers are harsh.