Stocks and shares isa- absolute newbie needs advice

george4064

I would suggest investment trusts over funds and over ETFs.

grey_gym_sock

for only £1000 or £2000, i'd stick to funds, because you can find a platform whose only charges are a % of the value of your funds, which will be very little when you have a small amount invested.

e.g. if you have £1000 invested, and the platform charge is 0.25% per year, that comes to £2.50 per year.

with ETFs or investment trusts, the platform will charge each time you buy or sell an ETF or an investment trust, typically a fixed fee of anything between £5 and £12.50.

e.g. if the dealing charge is £10, and you start by buying 2 different ETFs or investment trusts, then that is £20 costs up front; and it will be another £20 when you sell (though that should be many years later); and more charges if you want to invest some extra money in the future.

glottalstop

Have you considered using the sum to offset or repay an element of your mortgage, the over-payment can sometimes be reclaimed if you ever want to use the cash for something else in future. The return is probably more than you would get in a savings account, and with interest rates due to rise it would be a sensible choice.

Or; if this is the first time you have had a spare sum of money to invest I would stick to a basic cash saving - maybe a 3-5 year fixed ISA at around 2-3%pa. That may sound a bit tame but the effect will compound, and the alternative is ever so risky - had you put your cash in a stock market tracker earlier this year you might have LOST 15% in just a few months.

Or; if you want a speculative investment without the risks, how about our old friend ERNIE? Premium Bonds typically pay out about 1.3% of the sum invested, which is peanuts, but you are guaranteed to get your entire investment back. And there is always the slim chance of being a big winner.

Or; if you are determined to gamble put your sum via a self-select (eg online by opening an account with Barclaystockbrokers or Hargreaves Lansdown) Stocks and Shares ISA in a high risk - growth fund where a manager with a history of good luck will play with your funds for you, you could double up or lose half of it in 3-5 years. Google best performing funds or look in the Money section of the Saturday Telegraph and pick something which grabs your eye for examples: Woodford Equity Income, Biotech Growth or Fidelity UK Smaller Companies. Be prepared to say sorry to your mother but do not come back crying here if it doesn't work out.

Al.

Changingoftheguard wrote: »

Hi there,

New to the forum!

My grandad left me a bit of money this summer. He wasn't a rich man, but a working man who had investments.

I currently have the money sitting around. My mother has advised me to leave it in my bank account and thinks it's ridiculous that I would consider "gambling it". But for me, I know that my grandad told me that all you need is a leg up and money makes money. I don't think he would think it was foolish to invest.

Trouble is, I am clueless as to where to start. I don't know anyone who knows about this sort of thing. There are lots of links on here and lots of guides, but people on the investment boards on this forum have disputed the Accuracy of this. I wouldn't know where to start, or how much money to use. Do I buy shares? How do I get them? How do I manage them?


I'm not a high earner by any stretch, live modestly, and may need a few grand to move house with and not planning on using the money for say 3,4 years maybe. I won't be investing it all, just a very small amount (what sort of amount should you start with?) whilst I work out what to do. It's just that I don't know where to start.

Any ideas for total beginners?

Thanks! :beer:

Do you have any costly debt you could pay off? Maybe pay down some of the mortgage?

What about an emergency fund; how steady is your job - what are the potential financial pitfalls facing you?

What's your tax situation? Would a pension contribution be suitable? If you have a modest income and are thinking about investing a few thousand, will you get the investment ISA benefit?

If investing is suitable, you can self select, go to an adviser or look for a robo advice service. My gut instinct tells me that if you don't know for sure, do nothing!

Eco_Miser

glottalstop wrote: »

Or; if this is the first time you have had a spare sum of money to invest I would stick to a basic cash saving - maybe a 3-5 year fixed ISA at around 2-3%pa.

Why recommend that, when current accounts are paying 3-5% AER, and from next April most people won't be paying tax on savings anyway.