Fund Dividends where should i put them

strawberry_smoothie

Hi,

I am about to make my first tentitive steps into investing but before I do, I am hoping kind people can help me.

Basically I've found a great fund I want to invest in - I've also decided to stick £7k of dividends in a tax free saving scheme.

After speaking to a couple of people selling the fund I have decided to stick some of my dividends into an ISA with the first £3k ( I decided to go self select as I already have an isa which I opened this year and only have £10 in it).

However, my problem is this, it was recommended that also take out a fixed term bond for the remaining £4k. Now I don't think they have a great return on investment. Someone suggested I take out a 'tracker' ISA, and I've heard so many conflicting things about them also. Another thing, I also think I might need to watch out on the charges for keeping an isa or a bond. How do I measure if I am getting value for money from what I have chosen?


I frankly don't know what to do? Where do I stick the remaining £4K? I am very confused

Any constructive suggestion are kindly appreciated. :beer:

dunstonh

Trackers are cheap but tend to provide returns around the average of where they are investing. For example, a FTSE all share tracker will almost always end up at mid table when comparing funds in the UK all companies sector.

Trackers do tend to perform a bit better during periods of growth but worse during a correction/crash or in periods of volatility as they lack downside protection that most managed funds have.

In some areas, trackers can be attractive. In other areas trackers are a poor option. It really depends on where and how you want to invest.

CLAPTON

1. Before you think about investing you should ensure that you have sufficient 'rainy day ' money in your saving accounts. (say something like 3 months earnings)

2. Dont invest unless you can leave the money there for at least 5 years.

3. I dont really understand what you means about sticking 7k of dividends in a tax free saving scheme...
do you mean you have 7k to invest or do you mean you have or expect to have 7k worth of dividends from your investments?

[Deleted User]

You picked up 7 thousand pound in dividends, thats a impressively sized fund you have.

rainy_dave

Strawberry,

My only tip is to make sure that you have something in place to afford you some level of monitoring, many private fund investors get burned by poor information and alerting. Either try and get a good independent broker who will monitor your funds for you or sign up a monitoring and alerting service. I use www.igminvestmore.com as they provide instant text alerts which suits me as my job has me on the road for most of the day.

Or if you've got about £500k to play with I'm sure one of the city's banks would be more than happy to give you a personal advisor who will do all of the monitoring and alerting for you. Just slightly out of my league . . . . .

Good luck!