FTSE tracker

nocash

I want to punt £10k on the stock market as a 5-10 year investment. A friend suggested  tracker fund. I will be researching the web over the next few days and only go with a well established firm. Are there any “go to” sites that will save time and provide reasonable range of options to review? 

grumiofoundation

https://monevator.com/investing-for-beginners-why-do-we-invest/
(number of articles for beginners on this website). 

Edit - from your title implies might be just UK tracker? This is riskier than a global index fund (cf eggs and basket analogies). 

https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/building-a-diversified-investment-portfolio

ProDave

Hold onto your cash just now.  Look at the FTSE100 (for example) it's firmly on a steepening downward trend as Covid cases and restrictions are spreading fast.

Wait until it has done it's falling, Covid is starting to get better again, and the markets start rising again, then buy into your tracker.

My gut feeling is that will not be this year, possibly in the spring?  But keep watching the markets.

Linton

If you have no experience of investing a world index tracker is a sensible idea.  A FTSE100 tracker is not in my view.  Delaying investing until what you consider to be a good time is on average a poor policy.    For a start, if you think it is a good time to invest the chances are that half the world has already come to the same conclusion and prices will have have risen significantly.   Better on average to invest when you have the money.   
                                                            
However, if you are actually going to need all your investment in 5-10 years  I suggest you go for something rather more cautious than putting all your money into shares which is what a FTSE or world index tracker holds. 5-10 years is short/medium term with investing, to get the full benefits you need to be thinking long term.

Sebo027

Linton said:

If you have no experience of investing a world index tracker is a sensible idea.  A FTSE100 tracker is not in my view.  Delaying investing until what you consider to be a good time is on average a poor policy.    For a start, if you think it is a good time to invest the chances are that half the world has already come to the same conclusion and prices will have have risen significantly.   Better on average to invest when you have the money.   
                                                            
However, if you are actually going to need all your investment in 5-10 years  I suggest you go for something rather more cautious than putting all your money into shares which is what a FTSE or world index tracker holds. 5-10 years is short/medium term with investing, to get the full benefits you need to be thinking long term.

I second this. And read this:
https://monevator.com/investing-for-beginners-why-do-we-invest/

dunstonh

FTSE tracker

Which one? 

There are many FTSE indexes to track.   However, when used in shorthand, FTSE often means FTSE100.   However, that is an awful index and no sensible investor would track it.   

Alexland

If you want to invest a £10k lump sum for 10 years into the global FTSE All World index there is an HSBC accumulation tracker fund at 0.13% and you could hold it in a S&S ISA wrapper at iWeb (run by Halifax) who would only charge £25 setup then £5 to trade for the purchase and eventually £5 to trade for the sell at the end.

However as Linton describes going 100% equities for the period may be unwise and you may wish to have an asset allocation and platform that allows you to derisk the portfolio in the years leading up to the withdrawal to give more certainty of outcome. As you get towards the end of an adventurous investment the upside potential isn't enough for the capital loss risk.

Thrugelmir

When investing the last thing you should be looking to do is to "save time".  Take your time, do your research, understand what you actually investing. Nor is 5 years a recommended time frame for investing in stock markets. Think 10 years plus. If there's a fixed objective for the money. How comfortable would you be if the value of your investments fell? 

Another_Saver

nocash said:

I want to punt £10k on the stock market as a 5-10 year investment. A friend suggested  tracker fund. I will be researching the web over the next few days and only go with a well established firm. Are there any “go to” sites that will save time and provide reasonable range of options to review? 

Investing is not gambling so don't think of it as such.

Why only 5-10 years?

"a friend suggested" - would you buy a house, car, fridge, TV, boiler or phone based solely on what a friend suggested?

Is this for retirement, general savings...?

FTSE is a company that publishes indices that fund management companies create funds to track so to say "FTSE tracker" doesn't tell us much.

An index is just a list of companies with a % next to each that sums to 100%.

In the UK our main three indices are the FTSE 100 (biggest 100 companies), FTSE 250 (next 250 down) and FTSE All-Share (100 + 250 + a tiny amount of companies too small to get into the 250). The UK, in particular the 100, isn't very popular in this forum as you can tell. There is nothing "wrong" with the 100 index per se, it was made up the same way any other index (like the American S&P 500, or FTSE Global All Cap) were made up. The biggest 10 companies make up 40% of the 100 index, the 10 biggest companies in the global stock market make up 14%, so the 100 is more concentrated into fewer companies. The 100 has more oil & gas giants, banks, mining and big pharma companies, and less tech, than the rest of the rest of the world so is considered less diverse and full of dying industires. Also, since the Brexit referendum the UK has been the worst performing mainstream investment available and no-one wants to bet on a loser.

General wisdom is, if you're new to investing, use some of the links above and go for a good, cheap global index fund. Personally I like the Vanguard FTSE Global All Cap fund, but there are plenty, sometimes cheaper others available.

steampowered

A stock market investment over 5-10 years is not a "punt". It's a pretty safe bet.

The statistical chance of making a profit investing into the stock markets at a random point in time and leaving it there for 5 years is about 90%. Have a read of https://www.nutmeg.com/nutmegonomics/increasing-your-chances-of-positive-portfolio-returns-the-facts-about-long-term-investing/.

I would go with the funds recommended by Alexland or Another_Saver - as they are global and low cost. You don't want to be limited just to the FTSE 100.

If you wanted to "punt" you could start selecting individual shares, which increases the potential rewards but also dramatically increases the potential risk.

steampowered

Thrugelmir said:

Nor is 5 years a recommended time frame for investing in stock markets. Think 10 years plus. 

People sometimes say this but I don't believe it is supported by the facts.

When you actually look at the statistics since the 1970s, there is not much difference in risk between a 5 year investment and a 10 year investment. The risk inflection point appears to come at about 4 years.

Exhibit A:

Source: Macrobond; MSCI World Equity Mid and MSCI Large Cap Total Return in GBP, 1 January 1971-20 May 2020