Investing for a beginner

Billycock

Eco_Miser said:

madlyn said:

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?

If that's the Target Retirement funds, you choose the date nearest to when you want to start drawing on it.

The relevance is that the balance between the constituent funds is changed every year to lower the risk as you approch drawdown. This isn't necessarily a good thing, and you can also chose a LifeStrategy fund, in which the balance is adjusted to maintain a constant ratio of equity to bonds. as indicated in the names - LS20 is 20% equity, LS100 is 100% equity, etc.

I agree that the Target Retirement Funds aren't necessarily a good thing, my opinion is they start reducing equities/bonds a little too early. Personally I'd rather remain on LS60 funds a little longer then switch to LS40 when retirements approaching. 

madlyn, look up anything about Vanguard Investing on YouTube. James Shack (YouTube) explains Life Strategy vs Target Retirement funds in depth.

madlyn

Billycock said:

madlyn said:

This may be Female logik here, but could I open an pension and a s&s ISA?
£500 into each then put £40 a month away and every 6 months split that and deposit it into each account.
The pension is working for my retirement and the ISA is there if and when needed.

You can do that if you foresee a need to access funds before age 55, ISA will allow access before 55 years old.
If you were to open both accounts with £500 then rather than have the £40 saved each month for 6 months then splitting and depositing why wouldn't you just put £20 in each account monthly since you can add any amounts with the £500 opening option.
Since you're new to investing then do be prepared to see downturns as well as upturns on your investments, time in the market plays a major role and the longer you remain invested the likelihood your perseverance will be rewarded. 

I have misunderstood things, I thought as well as the minimum £500 opening deposit the minimum monthly deposit must be £100.
Did not realise that once a £500 pound deposit has been made any amount can be deposited monthly

Billycock

Any amount can be put in the account once opened via the 500 lump sum option. Doesn't have to be monthly, can be hourly, daily, weekly,monthly,anually,only on a Sunday even 

Albermarle

Most pension funds to that I believe.

Not true . 

What actually happens , especially with workplace pensions , is that you are offered the possibility to choose your own  funds ( can be hundreds or just a few ) 

>95% ( I think ) can't be bothered /do not understand , so the money goes into a default fund . This can be ( but not necessarily so ) a fund that automatically derisks when you start to approach retirement age.

So probably quite a significant % of money goes into these funds, but there are a lot of alternatives in case one can be bothered to look.