Opened S&S ISA... and confused about the options now

kempiejon

Global index tracker funds are made from individual stocks. A diversified portfolio of such can capture a global index's return without ongoing fees. Stocks are not the only assets in town, but might be the most volatile, separately any one could fall to zero but a diversified portfolio of a few dozen should mitigate such a risk. A global index tracker mind holds thousands of stocks, obviously most at less than 0.5% weight.

Eco_Miser

https://forums.moneysavingexpert.com/discussion/comment/82164419#Comment_82164419

You may find it beneficial to place the money in a general investment account with AJ Bell and then drip-feed this into an S&S ISA over the course of the year (aka pound cost averaging).

What's the point of putting the money (as a lump sum) in a GIA then transferring it bit by bit to the ISA? It's not pound cost averaging if it's invested in the GIA, and if it's not invested than surely a cash ISA would be a better home? Or put it all in the S&S ISA and only invest it over the course of the year.

But usually investing as soon as possible gives better results.

Section62

https://forums.moneysavingexpert.com/discussion/comment/82164368#Comment_82164368

DO NOT buy individual stocks

There's a risk of that being interpreted with more weight than may be necessary. It implies buying shares in individual companies is never a good idea. The truth is more nuanced than that. There are some companies who offer shareholder perks that might be worth having. And if children are involved then a small holding in a company that they interact with on a daily/weekly basis could be good from an educational perspective - it is more meaningful to see what is happening to a company they know, than looking at 'VWRP' and a number going up and down on a platform's app.

This isn't a recommendation to buy individual stocks. Rather pointing out that excluding them as an option in a portfolio should be done from an informed position, rather than by decree.

People will try to bombard you with ifs, buts and maybes

That's investing for you. There are no certainties. Understanding some of the "ifs, buts and maybes" is part of increasing your chances of a successful outcome. Ignoring them is risky.

Albermarle's point is key here - buying something you don't really understand and then selling it in a panic when the price drops is a real risk, which shouldn't be discounted.

StewedApple

https://forums.moneysavingexpert.com/discussion/comment/82164878#Comment_82164878

Well it would certainly assist them if the market crashed the day after you recommended going all in! but I'd agree it's not the most efficient use of their money, but it may also assist them to gain a degree of confidence about investing.

Eco_Miser

https://forums.moneysavingexpert.com/discussion/comment/82165209#Comment_82165209

That's a valid answer to my second paragraph, but what about the main question - why use a GIA at all?

StewedApple

https://forums.moneysavingexpert.com/discussion/comment/82165283#Comment_82165283

Happy to hear your thoughtd on where else they would hold the funds.

EthicsGradient

https://forums.moneysavingexpert.com/discussion/comment/82165412#Comment_82165412

Any easy access savings account that pays better interest than a GIA does (and there will be plenty). You called this "pound cost averaging", so you're advocating a gradual move from cash into investments.

Eco_Miser

https://forums.moneysavingexpert.com/discussion/comment/82165412#Comment_82165412

I answered that already.

But what do you mean by 'funds'? Cash equivalent? or an OEIC or ETF investment? In the second case, in an S&S ISA, in the first case an easy access Cash ISA.

masonic

The OP hasn't disclosed whether or not the money exceeds the annual allowance for this tax year or whether they've already subscribed this money to the S&S ISA, but if they are a taxpayer, the best option would be to use something like Royal London Short Term Money Market within the AJ Bell S&S ISA.

If there is a surplus of money that cannot be subscribed until the next tax year, the best option would probably be an easy access account such as LemFi @ 5% or a 6 month fix such as GB Bank @ 4.62%.

AJ Bell's dealing account only pays 0.75% on the first £2k and nothing above that. Buying a MMF unwrapped creates a reportable tax liability, which will be a hassle if the OP doesn't already complete a tax return.