Share dealing platforms - totally confused

Thrugelmir

ValiantSon wrote: »

Are we absolutely sure that the OP is looking to trade individual shares? The thread title refers to shares, but then one of the positives they identify with HL is the large range of funds available.

For pure shares there's also X-0 @ £5.95p a trade with a no fee ISA option. No use for open funds though.

Linton

ValiantSon wrote: »

Are we absolutely sure that the OP is looking to trade individual shares? The thread title refers to shares, but then one of the positives they identify with HL is the large range of funds available.

The OP raised trading and the comments about HL on Trustpilot. At least one of the comments is about HL not supporting the facilities a true trader would want. However I suspect that trading actually meant routine dealing.

ValiantSon

Linton wrote: »

The OP raised trading and the comments about HL on Trustpilot. At least one of the comments is about HL not supporting the facilities a true trader would want. However I suspect that trading actually meant routine dealing.

That's as maybe, but I still think that a big assumption is being made. The OP could enlighten us if they wished, and then more pertinent suggestions could be offered. Once again, however, we have a thread where insufficient information is given and the OP fails to provide clarification.

Cathcoo

Hi all, yes, I'd like to trade in shares as well as funds and would be looking to invest around £6,000 through an ISA, though I'm open to advice if people think this too little to go into shares. Trustpilot doesn't just carry negative reviews, btw, there are some financial institutions that have garnered very positive reviews. I've also, obviously looked at trade and media reviews.

Cathcoo

And when I say 'trade' I largely mean buy and hold, not Gordon Gekko.

ValiantSon

Cathcoo wrote: »

Hi all, yes, I'd like to trade in shares as well as funds and would be looking to invest around £6,000 through an ISA, though I'm open to advice if people think this too little to go into shares. Trustpilot doesn't just carry negative reviews, btw, there are some financial institutions that have garnered very positive reviews. I've also, obviously looked at trade and media reviews.

Investing in individual shares is a much higher risk strategy than investing in funds. Funds are diversified, whereas individual companies are clearly not. Diversification reduces your risk. On a £6,000 investment there is no clear advantage to putting your money into anything other than a multi-asset fund, e.g. Vanguard LifeStrategy; L&G Multi Index; HSBC Global Strategy; Blackrock Consensus.

A_T

ValiantSon wrote: »

Investing in individual shares is a much higher risk strategy than investing in funds. Funds are diversified, whereas individual companies are clearly not. Diversification reduces your risk. On a £6,000 investment there is no clear advantage to putting your money into anything other than a multi-asset fund, e.g. Vanguard LifeStrategy; L&G Multi Index; HSBC Global Strategy; Blackrock Consensus.

not sure what the relevance the amount has. there's no reason the think that someone with 6000 doesn't want growth just as much as someone with 6 million.

ValiantSon

A_T wrote: »

not sure what the relevance the amount has. there's no reason the think that someone with 6000 doesn't want growth just as much as someone with 6 million.

The buying power of £6,000 is low and the chance of creating a well-diversified portfolio with that amount of money is infinitesimally small except through purchasing one multi-asset fund. There is no advantage at that level of buying additional funds as the sums invested would be extremely low and the concomitant costs disproportionately high. Once an investor has a sum of several tens of thousands invested (even more likely as they approach £100,000) diversifying investments into other funds becomes more plausible, but at £6,000 buying one multi-asset fund is the best option to create a diversified portfolio without incurring lots of costs that would act as a drag on returns.

A_T

ValiantSon wrote: »

The buying power of £6,000 is low and the chance of creating a well-diversified portfolio with that amount of money is infinitesimally small except through purchasing one multi-asset fund. There is no advantage at that level of buying additional funds as the sums invested would be extremely low and the concomitant costs disproportionately high. Once an investor has a sum of several tens of thousands invested (even more likely as they approach £100,000) diversifying investments into other funds becomes more plausible, but at £6,000 buying one multi-asset fund is the best option to create a diversified portfolio without incurring lots of costs that would act as a drag on returns.

Still don't see that the amount has to do with it. Many platforms allow buying/selling of funds without charge with investments as little as 100 quid or less. There is no difficulty or greater cost in creating a DIY portfolio that suits the individual. No need to buy a multiasset funds thereby relying on someone else's idea of what a diversified portfolio should look like.

ValiantSon

A_T wrote: »

Still don't see that the amount has to do with it.

I've explained it. What don't you understand?

A_T wrote: »

Many platforms allow buying/selling of funds without charge with investments as little as 100 quid or less.

There are additional costs because each fund has an OCF, therefore each fund that you buy adds to your costs. Not all costs are to do with trading.

A_T wrote: »

There is no difficulty or greater cost in creating a DIY portfolio that suits the individual. No need to buy a multiasset funds thereby relying on someone else's idea of what a diversified portfolio should look like.

Costs will be higher and gains, unlikely to be better, especially given the drag caused by the costs.

You go right ahead and do that, but you will find that most sensible people would advise sticking to a single multi-asset fund for such a low sum. There are a range of multi-asset funds available so you have choice about the investment mix. Furthermore, most investors with small sums are fairly new to investing and haven't the experience or knowledge to create a wide and diverse investment portfolio of their own, and the economies of scale make it much harder for them to do so, and generate any meaningful return.

Perhaps you you would care to post a model portfolio that is better than one of those funds I listed, and the resulting management costs (and an any initial costs too).