New to investing

Aegis

noviceinvestor wrote: »

Can I ask why you're not a fan of shares as an investment?

Is this just your personal risk profile?

Basically, yes. My risk profile is quite high all in all, but I prefer to invest in, say, a high risk sector and spread that risk across as many companies as I can to reduce the effect of one company suddenly bombing. It makes you somewhat less affected by panic selling of a single share.

As such, funds are for me. Where else can you economically spread a couple of hundred pounds across 30-150 companies without incurring huge transaction costs? (admittedly you need to be sneaky to do that through Hargreaves Lansdown, but it's possible. I have one fund at the moment with about £50 in it )

jon3001

Aegis wrote: »

I have one fund at the moment with about £50 in it )

Is that because they have no minimum switching amount? I'm interested because I'm thinking of moving some funds there but it'd nice to be able to still micro-manage the allocations.

Aegis

jon3001 wrote: »

Is that because they have no minimum switching amount? I'm interested because I'm thinking of moving some funds there but it'd nice to be able to still micro-manage the allocations.

Yes it is. They don't allow you to invest in a fund through their site without a minimum of £1k, but I have yet to encounter a lower limit for sell-switches.

I know you can invest less than the £1k by calling up, but this way is probably easier if you have more than that to begin with, or are transferring funds from another company.

munk

noviceinvestor wrote: »

If I choose to hold shares or funds not generating a trail commission I will incur the charge.

For funds, HL charge 0.5% pa on top of the annual management charge (AMC) of the fund you're investing in if it's not a fund they receive trail commission on.

So for example if you want to invest in CIS funds - for which HL don't receive trail comm - you'd pay CIS's AMC of around 1.5-2% plus 0.5% to HL making it an expensive proposition.

jamesd

There's no minimum switching amount. You can sell any amount and split it say five ways into other funds. It's how you can circumvent the 1000 minimum via the web site: just buy something with no initial charge and sell to split as desired.

noviceinvestor_2

Aegis wrote: »

Basically, yes. My risk profile is quite high all in all, but I prefer to invest in, say, a high risk sector and spread that risk across as many companies as I can to reduce the effect of one company suddenly bombing. It makes you somewhat less affected by panic selling of a single share.

As such, funds are for me. Where else can you economically spread a couple of hundred pounds across 30-150 companies without incurring huge transaction costs? (admittedly you need to be sneaky to do that through Hargreaves Lansdown, but it's possible. I have one fund at the moment with about £50 in it )

So presumably there are low or no (or refunded) AMC for this fund then? Again admitting I'm a novice, wouldn't your £50 eventually be eroded away by charges etc?

You do make a good argument for funds over shares though!

Aegis

noviceinvestor wrote: »

So presumably there are low or no (or refunded) AMC for this fund then? Again admitting I'm a novice, wouldn't your £50 eventually be eroded away by charges etc?

You do make a good argument for funds over shares though!

As the charges and the growth are both determined as percentages, the £50 will not be eroded any more than other funds, which is to say hardly at all!

The performance data that you see for funds are usually inclusive of any AMCs, if I remember correctly, so if you see, say, 15% growth over the year, that's what you get unless there are any additional charges levied by your provider, which there aren't for me at the moment.

munk

lol... 'Whaa... my £50 got a £200 charge on it!!' Sounds like a Scottish Widows charging scheme to me

venice04

noviceinvestor wrote: »

Hello money experts,

Firstly, what I've read here is incredibly interested - yet a little depressing as it only serves to highlight how little I know about investing!!

I do have one quick question though - As a novice, I think I’m missing something re self select/stocks and shares mini ISA’s and would appreciate some advice.

Hargreaves Landsdown charge an admin fee of up to £200 + VAT p.a. to have a self select ISA, whereas Selftrade have no administration charge whatsoever to just have a normal dealing account.

Surely the £200 + VAT admin charge must be more than the tax savings of a self select ISA, so why would I get a self select ISA?

Any explanation would be greatly appreciated.

Check out www.bullbearings.co.uk. This is an excellent site where you can open a fantasy share trading account (for free!). I have found it v.useful in getting some practice in share trading!

Dawes_2

For investing less than £1k in unit trusts see:

hxxp://www.iii.co.uk/
Excellent site. Excellent fund list. :beer: