Stocks and Shares ISA

Thriftyandgifty

I have (finally- after years of deliberating) deposited cash in a Stocks and Shares ISA on the Hargreaves and Lansdown platform as I want to grow my money long term (6-10 years), but I'm unsure the best way to choose the shares to invest in. I was going to opt for a track the market ready made investment (as I'm new to investing), but I not sure if this is the best route. If I didn't go for this, do I need to choose companies to invest in and how would I find information on these companies? Apologies if this is a daft question- I've been reading and researching and I am going around in circles so any guidance would be appreciated. Thanks in advance.

Baldytyke88

Even tracking the market, you still need to choose which one, do you want to track the UK all share or the world market?

This is one that came uo first on my search - Fidelity Index World (Class P)

Albermarle

https://forums.moneysavingexpert.com/discussion/6656402/stocks-and-shares-isa

Buying and selling individual shares is risky, and many experienced investors keep away from doing that.

If you buy a 100% equity index tracker, that should grow nicely in the long run, but there could be scary drops in the meantime. Best really for a >10 years time horizon.

For your time horizon something a bit less racy is probably better, like a Multi asset fund, with say 60% equity.

If you spent some time reading and researching through this forum, you will get better informed about your choices.

dunstonh

I have (finally- after years of deliberating) deposited cash in a Stocks and Shares ISA on the Hargreaves and Lansdown platform as I want to grow my money long term (6-10 years)

That is not long-term. It is in the medium-term band(it varies, but the ballpark for medium-term is often referred to as being in 8-15 years).

10 years means you are not likely to be investing for a full cycle. So, you need to factor in the reduced timescale in your risk. Going 100% into equities is a bit gung-ho for someone just starting out investing. You are diving in at the deep end at your first attempt, and whilst in most 10-year periods you would expect healthy gains, there have been loss periods over 10 years (including some in modern times).

However, if you have a healthy cash savings position which can cover the risk, then that is fine.

Newbie_John

With your defined medium term Id go for something like:

Vanguard Target Retirement 2035

It lowers risk over time approaching that date.

And as said above - if you choose individual shares as a beginner it's like going to casino.. way too risky. Also buying funds with HL is free, shares cost £12 per deal.

Bostonerimus1

Forget about individual company shares. They are risky and should be avoided by 99% of retail investors. You should be buying investment funds that are a "basket" that hold hundreds or even thousands of individual stocks and/or investment bonds. So go away and research about the various different types of investment funds and how they can be used. IMO you will probably be best with what's called a multi-asset fund. That owns many stocks, bonds and even some cash. There are different flavours of these with various ratios of stock and bonds and ways of managing them. So don't do any investing yet; take a couple of weeks or months to understand what you are doing and why you are doing it.

infj

Have a look at the Monevator site and the link to Investing - Passive investing - they go through the options of how it all works. You probably just need a low cost global tracker fund - but don't try to do too much analysis (thus leading to paralysis as it sounds like you have already been doing to some extent.). It probably won't make much difference in reality which global tracker fund you choose - you just need to get your toe in the water.

But don't go checking the value every 5 minutes - every 6 months or once a year is perfectly fine to avoid the drama of the markets.

Doshwaster

For a beginner I wouldn't go anywhere near individual company shares. Just buy into a tracker so that you are getting a (very small) piece of hundreds or thousands of businesses so the failure of any one of them doesn't make much difference.

The Vanguard LifeStrategy 100% Equity and Vanguard FTSE Global All Cap Index are good starting points. The main difference to the two is that the LifeStrategy fund has a bigger UK weighting.

Rollinghome

Thriftyandgifty

I was going to opt for a track the market ready made investment (as I'm new to investing), but I not sure if this is the best route.

There was once a time when investing in "unit trusts" was very expensive. Typically, there would be a 5% initial charge and 1.5% pa ongoing charge, so it might take a year or more just to break even.

Consequently, it could make sense to invest directly, despite all the time and research needed, or perhaps to use investment trusts. Now unit trusts and their modern equivalent, OEICs, or ETFs are cheap. So cheap that you can buy a global tracker for around 0.10%. Beating those returns by investing directly is surprisingly difficult even for professionals.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81895043#Comment_81895043

100% global index funds are OK if you think you can sit on your hands when the market is plummeting, which it will inevitably do at some point.

The big danger is that a new (ish) investor might sell out after the index has tanked, and before it starts to recover again. So really they should only be recommended to people with a relatively high risk tolerance and/or a better understanding of how the markets work.

One thing for sure is that every time the market drops more than a few per cent, the forum is awash with threads with worried investors wondering what to do.

Thriftyandgifty

https://forums.moneysavingexpert.com/discussion/comment/81894197#Comment_81894197

Thanks for your response- I have read through a few threads, but I am still no further forward. I will research multi assets funds.👍️