23 year old needs your advice. lump sum to invest plus monthly payments.

THENOX

Hello

Someone will need to back me up on these or disagree as I'm a newbie (although I feel being a Convert already ) but:

Pro ETF:
1) If you are considering something for as far as nearly like a pension (10y++) there is a saying that actively managed funds will have serious problems with outperforming the trackers (for the reason of their charges alone and problems with picking consistent winners over so many years).
2) If you'll go for ETFs: Selftrade used to have free ETFs purchases (not sales) but this will end soon (5th of April). -Worth checking if they'll continue or not (stop promotion for this year but start for new one -who knows -we'll see monday ).
3) If you don't care too much about weekly price fluctuations the idea of cost averaging might be useful: iii.co.uk has the program called 'portfolio builder' which allows you to buy eg. ETFs for L1.5 on the 4 certain days of the month.
4) with ETFs you've got real time pricing whereas funds are forward priced
5) I'm not sure about this one (and it's a question to others): don't know whether platforms allow you to set stop loss order and others with funds as they with shares.
6) I'm not sure about this one as well (and it's another question to others): don't think that technical analysis principles can be applied to funds (no volume data etc.).
7) Lack of clarity of what the fund actually holds (if someone really cares ) -with etf it's really clear

Pro funds:
1) I've heard somewhere that there is not much choice regarding emerging markets exposure through ETFs as compared to funds.
2) Emerging markets are quite volatile so active management can provide a safety net (can adopt more cautious strategy in bad times {like now :mad:) [at least reducing losses] whereas trackers will just follow the index dive].
3) Some funds have one price -so you save yourself some money on a spread.
4) Playing around with funds is free (as long as you choose them with full initial charge reduction) whereas with etfs you've got dealing stuff.
5) ETFs (even that priced in GBP) involve not moderated currency exposure.

Didn't have any experience so I can only talk about what I've read about comparsion of charges + T&C but when going for funds HL seems to be the cheapest option when going for HB (outside of ISA) seems cheapest.

Sorry for lack of consistent reply above but I've just spent whole easter break to figure which one too choose.

In current (a bit hectic economic situation) I'd go for Actively managed stuff FOR NOW with managers which are believed to add value: try www.bestinvest.co.uk / fundmanagers as they (have the potential) to at least reduce potential losses suffered. When that storm will be over (and when you'll get more experience) you can switch to the cheaper (and more effective) in the long-run option.

Hope this helps,

THE NOX

john_kane_2

the nox,

thanks a lot for the detailed reply, very much appreciated. backed up some of what ive read as well as points i havent read before so very useful, thanks.

emerging markets etf seem to be very hard to locate, plus i feel active management could add a lot more value here. i like the look of the ifunds, because they invest only in etfs, but actively change the weightings to suit the current market conditions (including switching in to cash like other funds). but the annual charge of 1.75% is pretty gross.

as the years go by i can put my money far more into index funds to help the long term weighting of manly index funds rather than actively managed funds.

I still can't believe what I've just red:135k playing poker during studies? I'm just during studies and struggling to locate my 33k :-(

Serious question as I'm considering spread betting at the end how come you consider spread betting more risky than poker? For me (as a layman) spread betting can be aided by fundamental and technical analysis + news and comments + academic and professional literature whereas poker require pure skill.

Would you be able to share your experiences (experiences not techniques about both spread betting and poker) on sending post on prive or starting a new post. It would be absolutely great to hear about experiences of such a successful player.

i got into online poker mainly during my first year at university (wont say which one but it's usually around 5th-8th in league tables) studying economics. in theory it should have been pretty challenging, but it wasn't at all really. i had endless free time, except for when exam time came when i'd cram like mad for the 2 weeks beforehand. so, when i wasnt drinking or playing/watching sport, id be reading poker forums, reading poker books and playing online, only deposited about $100 or so playing really low stakes tournaments.

the prospect of a student summer job doing menial work wasnt inviting, so i decided to try playing online poker as a job. it didnt go well really, i was still learning, probably won about £500 over the summer and used my student loan+overdraft to pay for pub etc. though the week before i went back for second year i won £500, which was awesome at the time.

so during 2nd year i really got playing a lot, my typical day was wake up hungover, play online for 5-6 hours, may go play sport, then pub. day after day. never really went to lectures, i used to internet notes prior to exams. over the duration of second year i grinded out about £6k or so.

over that summer i tried being a pro again, but not much success again, only a few grand. roll on third year and now after 2 years i was starting to get much better with a lot of studying and experience under my belt. i was playing a lot and started to make some decent money, probably about £15k though a lot of this went on booze. i did a lot of work for student poker scene in the uk during this year. towards the end of 3rd year i bought a large screen laptop (dell 9400, super laptop) so i could play 6 tables simulatenously (used to play 2-3 tables).

having paid off student loans and overdraft, i had £4k to my name. so i set up a challenge, to go from £4k to £50k in poker winnings. i felt i was now a decent player, and wanted to give it a bash. i managed the challenge in a fraction less than a year. very pleased with how it all went, i did a blog for it as well:
http://chrisharveypoker.blogspot.com/

after that i then had to study real hard to get my degree and managed a 2.1 which was very happy with. i had also accepted a job offer for a big accountancy firm because i expected online poker to get a lot tougher (this sort of easy money usually doesn't last few years). so i set a summer challenge to go from £50k to £100k. i failed but still got to around £70k. about a month before my job started, i reanalysed my entire poker game - the games were tougher and i hadnt adapted to them. since doing so my game has greatly improved, and i'd now like to think of myself as one of the really decent mid-stakes poker players around. i managed to win another £60k or so since starting the job about 6 months ago, though i blew around £15k of this on 2 holidays (one of which was vegas over new years...). with having to work longer hours, so i turned to spreadbetting to see if i could make money there relatively passively. over the last year investing id found increasinly interesting and had gotten into reading a lot about gold (mainly from www.jsmineset.com) and i like hearing anything jim rogers has to say. so i started spreadbetting gold, deposited £1k and had £30 per $1 swing when it was about $730 (this would have been when i was starting my job), i switched up to £100 per $1 whilst increasing my deposit to £15k, around $800 spot price and at one point had £450 per $1 when gold was at $940 (seriously degenerate but i had around £130k to my name i figured gold would not hit $750 so i could have a swing of around $200 so decided to invest £90k into this).

well, needless to say the swings were too large so i reduced gold to around £250 per $1 and cancelled some other trades (was also long palladium, CHF/GBP, JPY/USD) as it was getting a bit crazy. when gold hit $1030, my deposit of £15k had grown to £65k. awesome, i had now around £165k to my name.

trigger the $130 correction! on the way down i was averaging around £150 per $1 swing, plus i had just started shorting US financials for a lot, so in total i lost £30k in the 4 trading days before Easter.

i kinda knew this would happen at some point so was eerily calm about it all. well, i then thought to myself, i have £135k, and here i am now! ive decided to put £100k in savings for house deposit and £10k for holiday spending, im my £15k profits in spreadbetting account and long gold at £45 per $1 (stop loss $735) and shorting US financials for a similar exposure (about £400 per 1% swing).

that leaves £10k, which im startng for my long term portfolio, and hopefully add another couple of grand every month.

looking back, i should have taken this year or a few years as poker playing years. my last 200 hours im averaging £400/hour. pretty sick. although im generally playing prime time (evenings and weekends) when more weaker players are about. i should have taken time off to play till the games were no longer profitable enough, or i got bored and wanted to get a job. though this is hard, very few decent professions like a gambling addict as they'd see it (i really, really wanted to get into trading, they liked the poker aspect a lot, and i can see why because screen trading and online poker share a lot of similar qualities, though i didnt know enough about actual trading during my interviews with the banks).

if my parents didnt care about me, without a doubt id of quit this job (ive come very close). im certain whilst at a job ill kinda wish i had quit/do quit, but if i do quit ill of wished i had stuck at the job.

so why am i a trainee accountant for £12/hr rather than an online poker player for £200/hr (thats my expected average)? im probably mad, but ive spent enough time deciding whats best, and if i can qualify as an accountant, then i can go play poker professionally with the safety net of knowing i can get a job with a £50k-£60k salary.

hope ive answered your questions. if any of this doesnt quite add up, im sorry, ive tried to reply as accurately as i can. edit: ive reread this and i hope it doesnt come across as 'look at me isnt this great'. its not great at all, i was just lucky to stumble into online poker 4 years ago and enjoy it and it turned out to be a very profitable hobby/semi-job. there are a few kids out there who have won well over £1m in a couple of years, and there are loads of people out there making very good money. but the games are getting tougher, and will always get tougher so long as they remain significantly more profitable than getting a job.

thanks again for your thoughts about the funds, much appreciated.

john

THENOX

Hello!.:-)

Thanks for answering my question in so much detail! It's really greatly appreciated!!!

I think quite seriously about starting to combine more of an active trading and spread betting. But atm I'm just at the beginning of the route looking for platforms and learning learning learning... Cheers for pointing out the active character of poker as opposed to sb -didn't think about this that way...

Regarding the funds of etfs
of:
1) (equity index trackers): to be honest I personally think that it's quite bad combination to actively manage something that is passively managed:
Managers team (at least should :mad:) have the ability to pick the good stock out of the index by using: their approach to value and growth, fundamental and technical analyisis + keeping and eye on news etc. It's seems to me much more difficult to assess the whole index than single stock because of the amount of variables and interaction. + the amount of fees payable equals even more (practically) because you end up paying: all dealing fees of a tracker (something like 0.5%) + all charges of a fund (1,7%) with no guarantee that it will perform any better then single share (perfect markets? ). = 1,7% for just picking a couple etfs seems quite a lot for something that 'everyone can do' :mad: (as based on much more general data -regarding performance of sectors or even countries) as opposed to (at least trying to spot :A) couple of companies in something like real estate company in eg. Latvia that have prospects to outperform in a given period. :cool:

What I was saying was more like: either go for funds picking single stuff or for etfs. Like Captain Planet used to say (i think he is nearly dead now ): The Power is Yours!

2) Fund of commodity etfs -it's only variation of the above (commodities are cool as the portfolio diversifier cause they behave in a bit different way to equities) but what's the difference in resigning from hands on advantage of active management to pay trackers fees on top. If you want some exposure to commodities you can buy etf tracking all or some of them. If you want a commodity fund (I think that) you need to seek for fund investing in commodity producers as (at least I haven't heard of :huh:) a fund directly investing in commodities (apart from commodity pools -but it seems a different piece of cake).

(everything what I've written is just my personal opinion and do not constitute advice -just a food for thought).

Hope this helps,

THE NOX

PS: There are extremely useful posts on this forum, try eg. active vs passive investment, etf and actually everything else in the tab: savings and investments

john_kane_2

Snowing today - crazy british weather!

ive used ig index for my spreadbetting and theyve been very good.


thanks for your points about the funds of etfs, i agree that it's pretty ridicuous the high charges for simply changing weightings of etfs.

ill do a new thread with my final portfolio plan and search about the cheapest way to invest in etfs.

thanks again

john

lilpelon

im almost 18yrs of age i got about a 1,000 to start investing
and i can add on 500-2000 monthly
but i dont know where or how to invest it
which brings me to asking for help
and really appreciate it

ESKIMO

lilpelon wrote: »

im almost 18yrs of age i got about a 1,000 to start investing
and i can add on 500-2000 monthly
but i dont know where or how to invest it
which brings me to asking for help
and really appreciate it

Best advice i ever received was; 'Start small, grow BIG. Start BIG, go BUST!'

Take your time, your only 17.

If you don't need access to it straight away, put it into a nice savings account and keep it simple.

Try not to get carried away with trying to 'beat' or 'play' the system. Stocks and shares are still quite volatile atm. If your looking for a high return i would steer well clear. Plus tax liabilities can be a downer and may "cancel' out any possible return you have made.

If however, you are still interested in investing, say in stocks and shares i would highly reccommend that you slowly "drip-feed" into any investments. Take your time to learn and gauge the industry and markets. Allocate yourself, say... £100 for the year. Put £10 in each month and at the end of the year assess how you think you did, did you enjoy it, spot any trends, have an 'investment strategy/plan' or try and 'wing it'. Then can make an informed decision as to whether it is for you. Plus you will only have 'lost' £100 at worst case as opposed to £1k+. Can be risk business at times so take care.

All the best either way. Let me know what you think?

Hope this helps?

ESKIMO

23 year old needs your advice. lump sum to invest plus monthly payments.

Have you any premium bonds? If not, have you thought about investing in them?

You can purchase a max of £30,000.00 of them. They are entered into 'lots' which is effectively a lottery, all winnings are tax-free and there is more of a chance of winning something compared to gambling (even if you are good at it - which i can notice you are.)

The only 'downside' (as such) is that you don't earn any interest on your £30K. You are effectively 'buying' the 'bonds' ('raffle' in lamens terms) in the high likelyhood that you will win something and quite regularly.

Prizes range from £5 to £1m, are drawn monthly, there are normally lots of winners and you can withdraw (exchange) your bonds back to your initial cash investment at any time.

Check it out on Teletext, BBC Red Button or online.

Something certainly worth considering. May suit you that your a gambler.

ATB. HIH.

sKiTz-0

Everyone knows the OP is over 2 years old, right?