Investing for a beginner

madlyn

I have a regular savings account due to mature in September, I plan to use part of it to pay a lump sum off my mortgage and invest the rest of it and I am happy to lock it away for several years.
I have read various guides and posts on s&s ISAs but still find it very confusing,is there a super simple process of setting up one of these?

Albermarle

It is 'super simple ' to set  up a S&S ISA  on line . Can take only 5 minutes .

The less easy bit is to decide what investments to hold within the S&S ISA. This partly depends on your personal circumstances ; what other savings/pensions/mortgage/debts etc you have and your 'risk tolerance' . Also your age and what is your objective for investing.

kuratowski

If you want to keep it super simple, then look at Nutmeg or Wealthify.

However, these are "do everything for me" apps and so they charge a bit more.  As this is a money saving site, most of the discussion on here is around cheaper options e.g. Vanguard.

tacpot12

The process is super simple. I recently opened an S&S ISA with AJ Bell.

The main thing you need to decide (once you are certain that investing is correct for you) is what to invest in. 

It is wise to only invest money that can be tied up for quite a long time. 7-10 years is a recommended figure, but you can plan to invest for less time, but it is more risky. It becomes less risky if you have some flexibility about when you wihdraw the money. Say you had invested in 2019, July 2020 would have been a very bad time to withdraw you money. If you could have waited until July 2021, you would have seen a reasonable return on the investment. So investing the money to be able to go on a nice holiday is practical over short terms because you can take your holiday the year after if your investments are not doing very well when you think you might want to take a holiday. 

I always recommend investing in a collective investment fund of some sort. This could be a Unit Trust Fund, an Exchange Traded Fund or an Investment Trust, the main thing is that it should be an investment that holds the shares of many individual companies. It should also be a large fund, so that you are effectively following  the herd. This gives great protection against making fundamental mistakes. 

One such Unit Trust Fund that is often recommended here is the Vanguard Lifestrategy 100% Equity Fund. This invests in a very wide range of global stocks and shares by holding a number of other Vanguard funds. It could be described as a fund of funds. It has low charges, which is a very important factor when selecting investments.

I would suggest you have a read up about this fund here: LifeStrategy® 100% Equity Fund - Accumulation (vanguardinvestor.co.uk) and see if you can find a fund that is better than it. If you can't, then you have found  something that might be a good starting point for you.

I would say not to let the apparent complexity put you off. You can open the ISA and just invest a small amount to start with. Once you are happy with the process, you can then invest some more.  

madlyn

Thank you all for the replies.
I am 46 and more than happy to lock it away for 7-10 years and looking at something medium risk.
Do I us a lump sum or a bit each month?

Billycock

A lump sum rather than a little each month would probably be better, the investment time in the market is the way to go. i.e.
If you had 12k to invest, invest 12k initially will have been invested for the full 12 months after 1 year, drip feeding 1k each month then your investments haven't been invested for the full 12 months over the same period.
Personally for a medium risk I would choose Vanguard LifeStrategey60 fund, a diversified multi asset fund. Fire and forget fund aka deposit your sum and get on with life, there's nothing else you need to do.
And go with Vanguard Investor website.

madlyn

Deffinitely wont be 12k, nearer 1k.

grumiofoundation

madlyn said:

Thank you all for the replies.
I am 46 and more than happy to lock it away for 7-10 years and looking at something medium risk.
Do I us a lump sum or a bit each month?

Over that timescale would a pension not be better than stocks and shares ISA? (due to tax relief)

Can invest in the same things in either (e.g. could open vanguard pension as opposed to ISA and choose VLS 60 if you decide to go with vanguard).

Billycock

madlyn said:

Deffinitely wont be 12k, nearer 1k.

That's fine, I was just giving an example. It's £500 minimum to set up the account and then can deposit any amount as you want afterwards. That's if you want to add more, maybe when you have a little cash to spare. Entirely up to you.

Albermarle

As mentioned , investing in a pension might be better due to tax relief.

What is your current pension situation ?

madlyn

I have a personal pension and I also pay the max amount into my work pension.
Just had a quick look at their pensions, and I can still choose a ready made fund and either deposit a lump sum or pay in monthly?
The ready made funds have years in their title, does this mean anything? Do I choose a fund closest to my retirement age or when I want to start drawing on it?