Charles Stanley Direct - Where to Start?

Optsdan

Hi all,

Currently I have some disposable income to manage. After reading the S&S ISA guide on here, I decided to take the first step towards investing my money through CSD.

Contextually, my other savings are tied up in current accounts and regular savers - so I thought S&S would be a logical step.

I guess I had this utopian view that I would just log on, deposit money, choose level of risk and then voila: I’d have invested my money.

Where is a good place to start with regards to finding and choosing funds? I’ve heard a name called Vanguard as a good starting point; however when I put it in, loads of different funds popped up.

So my question is: where is a good place to start my research? I want to have low to medium risk, and not have to closely manage my initial investment.

Initial deposit was £4K.

Thanks very much in anticipation.

Alistair31

Vanguard Lifestrategy 60 perhaps ?

w00519772

I have a Charles Stanley account and I invest everything (currently about £5K) in the Vanguard 80% fund. This is money I can afford to lose at the end of the day.

I invest about £300 per month so I can benefit from the market falling and increasing.

With regards to what fund you choose; it depends on your attitude to risk and how long you intend to invest the money for e.g. one year or thirty years. Funds have a risk rating. The highest risk means better returns but you could lose some of/all your money. Lower risk funds mean lower returns, but less risk.

badger09

Optsdan wrote: »

Hi all,

Currently I have some disposable income to manage. After reading the S&S ISA guide on here, I decided to take the first step towards investing my money through CSD.

Contextually, my other savings are tied up in current accounts and regular savers - so I thought S&S would be a logical step.

I guess I had this utopian view that I would just log on, deposit money, choose level of risk and then voila: I’d have invested my money.

Where is a good place to start with regards to finding and choosing funds? I’ve heard a name called Vanguard as a good starting point; however when I put it in, loads of different funds popped up.

So my question is: where is a good place to start my research? I want to have low to medium risk, and not have to closely manage my initial investment.

Initial deposit was £4K.

Thanks very much in anticipation.

First of all, please don't invest your money without a bit more research.

A decent intro can be found on Monevator

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

The writer is biased towards passive investing, but IMHO that's no bad thing for a novice investor

Once you've decided what you want to invest in, then you can choose the platform to use - CSD, IWEB, Vanguard (only their own funds), etc etc

Optsdan

Thanks very much for a steer.

With funds is it good to hold multiple funds to diversify the risk? Or just hold one at an acceptable risk threshold?

Fatbritabroad

Also where he says the risk is you lose your money. The risk is generally volatility in that if it drops say 50%. You might panic and close the account thus crystallising your loss.if you're patient and can afford to leave said money over a longer period the stock market has always regained and gone higher. And don't forget dividends in the mean time. Even vanguard lifestrategy pays a bit. If you don't believe it will eventually come good you wouldn't invest at all.or have a pension which will also be invested

Optsdan

Great, thanks for the advice. I’m going to commit tomorrow to detailed research. I am in a position where I can make this a long term commitment and ride out any dips if necessary.

So far, I’ve done a little research on the vanguard funds - they seem a good place to start for beginners.

Is there logic in me splitting my 4K between funds, say:

- 3k in the life60 fund - happy with medium risk

- 1k in the life100 fund - happy with the high risk as this 1k was crypto profit, therefore I can tolerate the higher risk of 100% equity

Thanks for the feedback so far.

forextc

Markets have just dropped nearly 2% today as I type and bonds are also struggling. If you had put your 4k in pretty much any fund today you would be down.

Before you do anything workout your investment time horizon and be honest with yourself as to how you would feel if your investments plunged 10%, 20%, 50% etc in value. That is absolutely key to determining as to where you invest.

Once you had done that the Vanguard funds are as good a place as any to start.

If people were more honest with themselves they'd be unlikely to take on the amount of risk that they do. While markets do tend to go up over time there have been plenty of periods when investors have had to wait 10-20 years just to see their original capital back.

As ever you pays your money and takes your choice.

Alexland

But then if people were more honest with themselves and held more bonds their long term investment performance would suffer.

With cost control and dividend reinvestment it is unlikely a well diversified investor will have to wait 20 years to break even.

The beauty of regular contributions is not just the cost averaging but also the psychological benefit of never seeing quite how badly your investments have fallen in adverse conditions.

Alex

forextc

It's unlikely but not as unlikely as many believe. The recent years of gains have got many forgetting the pains of the past. There are several periods when market returns did not outstrip inflation.

If you think inflation is about to take off (Fed Chairman Powell hints at 4 near term rate rises for the US dollar this evening) then now is certainly not the time to be putting lump sums in any market.

However if you are happy to accept the risks then I would agree, regular savings and dividend reinvestment is the way to go.

http://www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html

Plus

Optsdan wrote: »

Thanks very much for a steer.

With funds is it good to hold multiple funds to diversify the risk? Or just hold one at an acceptable risk threshold?

It's good to diversify your risk. Let's say you bought a UK fund. That would leave you exposed to falls in the UK stock market. To diversify you might buy a Japan fund - in the hope that when the UK goes down, Japan might go up. Or, more to the point, you can rebalance - sell some Japan when it's expensive and use the money to buy some UK when it's cheap.

However, there are ranges of funds like Vanguard Lifestrategy, Blackrock Consensus and L&G Multi Index that are pre-diversified - they do this for you, so it's safe to buy just the one fund. You are still exposed to some risks by using a single fund house, but the FSCS helps with those.

It's also worth bearing in mind the differences. For instance Vanguard Lifestrategy is a fund where you pick a fixed mix of stocks and bonds, while at L&G Multi Index you pick a risk score. Each of those has slightly different behaviours, since the risk/return levels of different assets can vary during economic cycles. So they aren't exactly equivalent.