£500 a month

badger09

AnotherJoe wrote: »

That would be paying 5 commission fees instead of one.

JohnRo wrote: »

I agree about the commissions

Commissions?

Or do you mean platform/dealing fees?:cool:

AnotherJoe

Firstly it's a conceptual idea, I doubt anyone can measure "diworsification" in any meaningful way. I don't think overlapping is anything to do with the concept by the way and I'm not convinced it really applies to a portfolio.

Secondly, assuming it does apply and is the case, then it implies that some holdings will do less well than others at different times in the market cycle thus reducing the overall positive effect of the "winners" at any given point in time.
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It depends what they buy and it most certainly does not imply some holdings will do better than others. . Its very easy to buy a bunch of ITs and find that the same 10-20 top holdings of each have a huge amount of commonality and that therefore they will do pretty much the same.

Only if you bought say Asia, US , UK, Europe (ex UK), developing countries might there be some real diversification but in that case why not buy a single global trust ?

JohnRo

Convoluted might be a better word perhaps, Conversification

Assuming there aren't any additional costs, which is often the case depending on the platform used and if the funds held have a similar OCF.
Then holding many funds or ITs rather than just one that does approximately the same thing could be argued to reduce risk, in terms of management decisions that affect performance. That's an approach I've taken where I hold more than one IT for each region, the theory may well be flawed but it works for me.

So in the case with ongoing regular contributions I would buy each one in a lump at a time to reduce the fees and over the course of a year or so end up with smaller holdings in say five ITs for the same cost as a larger holding in one purchased at the same intervals.

In this case nothing is actually worse, assuming there is overlap and all do more or less the same, unless you subscribe to the star manager/fund ethos. If that's not the case then it has achieved diversification whether by default or design.

YorkshireBoy

savings_my_hobby wrote: »

You could start up a nationwide flexclusive regular saver (£500 per month) and a halifax reward account (pays you £5 per month)
if stocks and shares don't interest you.

This way you could still access money if you need to - although it's better if you just leave it.

After 12 months you would have saved around £6000 and gained and around £300 in interest if you meet the requirements.

More if you switch to Halifax Reward.

I have these accounts already but if I didn't and I had £500 per month to play with this would be what I would do, then in 12 months with the £6300 set up a Flex Direct and TSB Plus account and put the rest in a tesco 3% account and then review after a further 12 months.

I'm not sure if you mean £300 from the Regular Saver? If you do, then you won't get 5% on everything in there...since the £6K won't be in there all year. What you'll get is £162.50

Even if you were including the Halifax Reward (it's not clear if you were), that only totals £222.50. Where's the other £77.50 from?

fatbeetle

Thanks guys, some thought provoking responses.

I've never bought shares or used "investment trusts" before, so would not know how to go about it, any advice?

nushnush

P2P lending via Saving stream or Assetz Capital or Money Thing, from 7% to 12% returns without too much work, not sure if these sites would let you invest from australia but if they do then they are another option, also no management charges

badger09

fatbeetle wrote: »

Thanks guys, some thought provoking responses.

I've never bought shares or used "investment trusts" before, so would not know how to go about it, any advice?

This isn't a bad place to start your education:)

http://monevator.com/category/investing/passive-investing-investing/