Investing in Stocks

bushido1

Thanks a lot!!

bigadaj

Would be useful to know how much money you are looking to invest and over what time period as this may have some influence over the replies.

Investing is normally recommended over the longer term, so the first observation is that you seem to have a lot of flexibility in your plans, if soemthing changes and you need access to the money in a hurry there is a strong possibility that you may lose money over a short period of time. Investing is generally thought unwise over any period less than five years and ideally ten years or more.

If you are proposing to invest less than £15k in the uk then this can be sheltered within an is a and avoid income tax and capital gains tax on that sum. You need to ask someone in Spain what the rules are on that should you move to Spain and once moved then you can't continue to invest in the uk in an isa. You may also have problems opening and operating uk accounts from another country, brokers like banks are wary of dealing with people living elsewhere as they are not their target market and are subject to money laundering and other onerous regulations that they could be fined or prosecuted for if they are found not to have dealt with properly.

Moving to the us gives particular problems as if you are a permanent resident they don't recognise other countries tax conventions so the tax free status of the USA for example is ignored and will be subject to us assessment. More importantly the implicitlations of dealing with the us authorities means that most uk financial institutions don't want to deal with you if you are a us citizen. In that case you need to base yourself and your investments in the us.

There's little risk of losing all your money using conventional funds with a regulated uk broker or platform. Your investments are held with the fund company through the broker, so if the broker goes bust then you still Ho,d the individual funds. Similarly if the fund manager goes bust you still hold the individual investments in the companies that make up the fund. There is a £50k maximum compensation scheme for investments also like for bank savings run by the uk fscs that would pay out up to that limit.

What you invest will vary though, so there is a moderate chance that you would lose money over the short term just due to movements in the share price, this could be 30% in crashes, or even 50% if the timing was really bad but leaving the money invested would normally lead to slow and moderate gains.

bushido1

Thanks a lot!!

Linton

bushido1 wrote: »

4/ You said "There is a £50k maximum compensation scheme for investments also like for bank savings run by the uk fscs that would pay out up to that limit.".
When does this compensation occur?

Lets put an example:
Imagine I have 500kGBPs in VWRL through Interactive brokers.
In case the platform (Interactice Brokers) goes broke and closes. Would I be able to still get back 500GBPs or only 50kGBPs?
In case the fund VWRL goes broke and closes. Would I be able to still get back 500GBPs or only 50kGBPs?

Thanks in advance!!

If you put money in a bank the bank owns your money which can be used to pay the banks debts.

When you put money into a regulated fund held on a platform you retain ownership throughout. So if an intermediary goes bust your assets cannot be used to pay the intermediary's debts. Your assets would, eventually, be moved elsewhere. So the sort of things that the bank compensation scheme covers cannot happen with regulated investments.

It isnt easy to see what realistically possible events would lead to an investor losing his/her investments.

bushido1

Linton wrote: »

If you put money in a bank the bank owns your money which can be used to pay the banks debts.

When you put money into a regulated fund held on a platform you retain ownership throughout. So if an intermediary goes bust your assets cannot be used to pay the intermediary's debts. Your assets would, eventually, be moved elsewhere. So the sort of things that the bank compensation scheme covers cannot happen with regulated investments.

It isnt easy to see what realistically possible events would lead to an investor losing his/her investments.

Thanks for the answer.

Could anyone answer me the other questions please?

Appreciate it!