Warren Buffet's Advice on Investing in a Low-Cost S&P 500 Index Fund.....

Euro_Skank

A_T wrote: »

Search the forums here for Snowman's spreadsheet it's an excellent tool for comparing platforms.

For funds I'm currently favouring these 2:

Legal & General International Index Trust - OCF 0.13% (tracks the performance of the FTSE World (ex UK) Index)

HSBC FTSE All Share Index - OCF 0.07%

Thanks very much, A_T, I'll look at those two. Incidentally, is that his actual username (snowman) as I can't find any spreadsheets or the like by that name? Can you provide a link please?

How do your two recommendations compare with my only holding?
HSBC GLOBAL AM UK WLD SEL BAL PFOLIO C ACC

Euro_Skank

Glen_Clark wrote: »

No because he is Warren Buffet.
If you are as smart as him and employ as many analysts you should invest like he does too
Incidentaly, if you are goung to invest in $ denominated funds you might consider that dividends will be paid in $ which incurrs a fee to convert to sterling and another fee to reinvest. So you may be better with an accumulator than the Vanguard fund.

Thanks, that's a very good point. Would this seemingly UK-orientated fund incur currency conversion fees?
Vanguard Funds plc (VUSA) S&P 500 UCITS ETF USD (GBP)

bostonerimus

Euro_Skank wrote: »

Thanks, all. Goes to show what I know - jack all!

So, next question please:

What low-cost index tracking fund can anyone recommend for the best return and which broker should I use? I'm 46 and plan to invest the max. S&S ISA amount until I retire when I'm 70.

A tracker fund will follow a specified index. What you need to do is to decide on an asset allocation and then use a few low cost trackers to get the allocation you desire. Or you might just go with the preset allocation of a multi-asset fund like one of the Vanguard Life Strategy funds. If you are interested in S&P 500 go over to Vanguard.co.uk where you can inexpensively buy their S&P500 ETF. (Exchnage Traded Fund......basically a tracker that you can buy and sell like an individual stock, but it's a fund made up of all the companies in the S&P500). But if you want more diversity you might consider the Vanguard FTSE Global All Cap fund and add in some fixed income funds to reduce volatility.

A_T

Euro_Skank wrote: »

Thanks very much, A_T, I'll look at those two. Incidentally, is that his actual username (snowman) as I can't find any spreadsheets or the like by that name? Can you provide a link please?

How do your two recommendations compare with my only holding?
HSBC GLOBAL AM UK WLD SEL BAL PFOLIO C ACC

That appears to be a managed fund. The charge of 0.81% is, I imagine, to pay for active management.

The funds I use track stock market indexes and do nothing else.

I haven't a clue about securities but from what I've looked into actively managed funds don't seem to do any better than index trackers over the long term.

I don't really know why active funds exist but I suspect it has something to do with many investors having faith that the very clever men they've chosen to look after their pensions and investments know better than the market and will make them lots of money.

But hey take no notice of me the HSBC fund could do very well for you.

Eco_Miser

SnowMan's spreadsheet

Monevator's list of low-cost platforms

dividendhero

You need a fair chunk of money to do this (around £600k). But if you put £300k into each of an income and accumulator tracker you'll get about 11k from the income fund and if you sell around 3.7% of the accumulator each year you'll benefit from two sets of tax allowances and get around £22,000 pa tax free. This is of course on top of any ISA's

Glen_Clark

Euro_Skank wrote: »

Thanks, that's a very good point. Would this seemingly UK-orientated fund incur currency conversion fees?
Vanguard Funds plc (VUSA) S&P 500 UCITS ETF USD (GBP)

If you buy VUSA your platform will charge you something to convert the dividends from dollars into Sterling. (and more to reinvest them) Snowmans spreadsheet will give you an idea how much but we don't sem to know exactly.
So I use Black Rock ishares - CSP1 : https://markets.ft.com/data/etfs/tearsheet/summary?s=CSP1:LSE:GBX because its an accumulator where the dividends are reinvested automatically.
Its a bit more complicated when you have to account for the dividends separately on a tax return. But that won't affect you when its in an ISA

DiggerUK

Buffets other argument for such an approach, was to pour scorn on the overpaid advisors and managers in the financial services racket. People he reckoned served their own greed first, and their clients needs by accident..._

bigadaj

DiggerUK wrote: »

Buffets other argument for such an approach, was to pour scorn on the overpaid advisors and managers in the financial services racket. People he reckoned served their own greed first, and their clients needs by accident..._

Probably, can't recall him ever saying put the majority if your wealth into gold though.

greenglide

to pour scorn on the overpaid advisors and managers in the financial services racket

Does he not count as part of the financial services racket then or is he as pure as the driven snow and people follow his "advice" because he is being altruistic?