Great Hunt: Are you interested in investing your money?

edinburgher

crmism wrote: »

My advice to any first-time investor is a. to avoid stock/share ISAs, as the tax savings are wiped out by charges, b. avoid managed funds, as they generally under-perform, and c. begin by buying shares directly in a business they know - such as a bank, high street store etc.

This is utter nonsense. New investors should never pick stocks, as they do not have the skills to pick winners. They should invest in well diversified funds that invest in hundreds/thousands of companies in an attempt to capture as much of the market return as possible.

Also, in an age of platform fees and greater transparency around costs, it is more important than ever to use tax efficient investing vehicles such as ISAs.

I'm actually of a mind to report your post as the advice it contains is so dangerous for anyone who reads it and thinks that it is anything other than tripe, but sadly that's not what the report button is for.

chockydavid1983

edinburgher wrote: »

This is utter nonsense. New investors should never pick stocks, as they do not have the skills to pick winners. They should invest in well diversified funds that invest in hundreds/thousands of companies in an attempt to capture as much of the market return as possible.

Also, in an age of platform fees and greater transparency around costs, it is more important than ever to use tax efficient investing vehicles such as ISAs.

I'm actually of a mind to report your post as the advice it contains is so dangerous for anyone who reads it and thinks that it is anything other than tripe, but sadly that's not what the report button is for.

I agree with you edinburgher.
Pensions are also a form of investing and should be taken advantage of for their tax efficiency.

ColdIron

crmism wrote: »

My advice to any first-time investor is a. to avoid stock/share ISAs, as the tax savings are wiped out by charges, b. avoid managed funds, as they generally under-perform, and c. begin by buying shares directly in a business they know - such as a bank, high street store etc. That way, they avoid management costs, and can see how dividends grow.

Where to begin? I'm not going to even try but I think you've won the 'worst advice' award of the year, particularly for novice investors

Mogley

My first venture into investing was a child trust fund set up for my 1st dependant 11years ago. My second was starting a company DC pension which invested 20% in Bonds and 80% in UK and world equities. I must admit I blindly invested money knowing that, history tells me S&S outperform cash in the long run. These investment grew nicely (pension started 2010 so after the last major crash)


It is only recently (12 months) I've taken a real interest in understanding my savings goals and last year chose to invest in S&S ISA for a long term savings goal but also switched my children's' CTF to more competitive S&S JISA (100% equities).


My advice would be, if you are just starting out and want to save for the long term (>5 years), invest in a multi asset ACC tracker fund. Try to find a platform with low fees. Start investing regularly as soon as possible to take advantage of the investment growth.

chockydavid1983

Definitely A and C are bad advice for novices.
B is probably fine as on average, passives beat actives due to lower charges and it's difficult to pick the best actives in advance.

Eco_Miser

crmism wrote: »

My advice to any first-time investor is a. to avoid stock/share ISAs, as the tax savings are wiped out by charges,

Choose the right platform and there are NO additional CHARGES for having an ISA.

crmism wrote: »

b. avoid managed funds, as they generally under-perform, and c. begin by buying shares directly in a business they know - such as a bank, high street store etc.

Such as Northern Rock, Bradford & Bingley, Woolworths, BHS? Oh, no, you can't - they all ceased trading.

crmism wrote: »

That way, they avoid management costs,

but pay transaction costs and platform costs, unless they get the shares in certificated form, in which case the transaction costs will be more.

crmism wrote: »

and can see how dividends grow.

Can do that anyway.

crmism wrote: »

They should ignore fluctuations in share prices, look to the longer-term, sit tight every time a crisis is reported, and look to buy more shares when that occurs. They should also spread their money gradually over various market sectors.

That bit's right.

sorcerer

crmism wrote: »

I was an Investment Manager responsible for setting up and managing private client portfolios, and began dealing on my own account as far back as the mid-1980s.

Too many people fear the stock market, largely through unfounded rumours about losing all their money overnight. If they dip their toes in, they go for insurance policies, unit or investment trusts, almost all of which under-perform and are costly in terms of fees and hidden charges. They will happily shop or deal with big companies every day of the week, but don't trust them sufficiently to buy shares in them. Instead, they keep their money on deposit, earning rates of interest lower than the rate of inflation, but don't realise their savings are being eroded in real terms. If they have a company or private pension scheme, they don't seem to realise that the providers put most of their pension funds into shares in order to protect schemes against inflation.

My advice to any first-time investor is a. to avoid stock/share ISAs, as the tax savings are wiped out by charges, b. avoid managed funds, as they generally under-perform, and c. begin by buying shares directly in a business they know - such as a bank, high street store etc. That way, they avoid management costs, and can see how dividends grow. They should ignore fluctuations in share prices, look to the longer-term, sit tight every time a crisis is reported, and look to buy more shares when that occurs. They should also spread their money gradually over various market sectors.

Net dividend yields are far more attractive than deposit rates, and the government has encouraged more investment into shares with the introduction of the Dividend Allowance. The total return from a selection of "blue chips", ie dividend and share growth, will always outperform cash in the medium/long term.

I invested in RBS a few years ago and lost 80%, one advantage of trusts and OEIC, is you don't get wiped out by a single stock.

Rosie1980

I was forced into getting my head around investments 6 years ago when my Dad passed away and my Mum and Grandmother were left with money in investments none of us had any understanding of. My Dad used to keep an eye on teletext and move money around so I didn't think just leaving it sitting where was the safest bet. In the first instance we called on the services of a Financial Adviser, who cost a lot and hasn't done anything more than I could now that I understand more. With everything I have read I can honestly say that to get started you simply need two things.

The first is https://www.monevator.com, this site is amazing for investing knowledge, it's the MSE of the investing world in my opinion.

The second is Vanguard, they offer low cost passive funds and even better they also offer all in one low cost portfolio funds, eg their lifestrategy funds. You can even do all this through their own platform for a low cost!

Mr_Mann

I was thinking of buying a buy-to-let property as it's one of few investments where you get both growth and income (property value increase and rent). However I can only afford to buy at the bottom end of the market (without getting a mortgage) and having viewed a few flats I think that may come with problems so I have been put off a bit. I have also considered buying some land with stables on as the income is similar, approx. £600-£700/ month for 4 horses. I would imagine with a livery yard there is far less red tape and landlord regulations to contend with. But land prices have already soared and I'm not sure how much further they can rise so growth might be more limited perhaps. Does anyone have experience of this or tips ?

jimjames

Mr_Mann wrote: »

I was thinking of buying a buy-to-let property as it's one of few investments where you get both growth and income (property value increase and rent

That is just completely untrue. There are many, many investments where you can get growth and income, in fact almost all offer that so it's very misleading to suggest that BTL is one of a few.


BTL is very illiquid and generally geared so is also quite risky as losses and gains are magnified.