New to investing

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acerazor1
acerazor1 Posts: 45 Forumite
edited 11 July 2017 at 2:51PM in Savings & investments
I currently have aeound £400 a month spare cash and would like to stadt making my money work harder! I've transferred my bank account to M&S to take advantage of their 5% regular saver, and would like to try investing the remaining £100-£150 per month into an investment ISA. I was looking at investing into a fund with H&L but there are so many different funds, its all very overwhelming to a begginer. How do you guys go about picking a fund? Are there any relatively safe first-timer funds? What sort of % return should i expect? I am happy to leave my money long term (5-10 years). I understand the basics of shares but picking them is a complete mystery, I may aswell be clicking with my eyes closed!

Btw I have a mortgage fixed at 2.57% so unless I can expect better returns I guess I should overpay each month.

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  • Bravepants
    Bravepants Posts: 1,503 Forumite
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    If you are brand new at investing, and depending on your age you might want to look at global index tracker funds.


    Or funds of funds like Vanguard LifeStrategy, which are multiple funds investing in various equity indexes and bond funds. Other funds of funds are available! In general passive investing via index funds have lower charges than active funds (actively managed by a fund manager). You should be looking to pay less than 1% per annum for total charges, you can these days pay less than 0.5%.


    Buy, or borrow, a copy of Tim Hale's "Smarter Investing" and read the first chapter to give you a general overview, it's a very good read.


    Then take a look at the Monevator website.


    Depending on your income level, if you are over the 40% tax bracket it may be worth you paying AVC or into a SIPP to skim off the 40% part of your income, particularly if you plan to retire early, say from age 55.


    Good luck!
    If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    I was looking at investing into a fund with H&L but there are so many different funds, its all very overwhelming to a begginer.

    Investing is made unnecessarily complicated. I say the same thing over and over again so here goes again. Go over to vanguard.co.uk, look at their website and c=decide which LifeStartegy fund matches your tolerance for risk, then open an ISA account with Vanguard and start investing.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • acerazor1
    acerazor1 Posts: 45 Forumite
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    Thanks for the replys guys will thank!!

    Ive heard abit about vanguard, what exactly is it?
  • xylophone
    xylophone Posts: 44,413 Forumite
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    https://en.wikipedia.org/wiki/The_Vanguard_Group


    http://www.telegraph.co.uk/investing/funds/probably-lifestyle-fund-good/
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
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    bostonerimus wrote: »
    Investing is made unnecessarily complicated. I say the same thing over and over again so here goes again. Go over to vanguard.co.uk, look at their website and c=decide which LifeStartegy fund matches your tolerance for risk, then open an ISA account with Vanguard and start investing.
    That's one option. Even if you go entirely with Vanguard products, other platforms may be cheaper, depending on how much and how often you invest.
    Eco Miser
    Saving money for well over half a century
  • Eco_Miser
    Eco_Miser Posts: 4,708 Forumite
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    edited 11 July 2017 at 5:00PM
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    acerazor1 wrote: »
    I was looking at investing into a fund with H&L
    Why H&L? They are frequently the most expensive platform.
    See http://monevator.com/compare-uk-cheapest-online-brokers/ for a list of others. Take note of the exit fees as well as the annual and transaction charges.

    Have you got 6 months expenditure in cash (earning 3-5% - you can have more than one current account) for emergencies? If not it's probably too soon to start investing, as you don't want to be a forced seller in a downturn.
    Eco Miser
    Saving money for well over half a century
  • TheShape
    TheShape Posts: 1,779 Forumite
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    Eco_Miser wrote: »
    Have you got 6 months expenditure in cash (earning 3-5% - you can have more than one current account) for emergencies? If not it's probably too soon to start investing, as you don't want to be a forced seller in a downturn.

    Take note of this. You do not want to have to sell investments if you need money in an emergency. Doubly important as your M&S Monthly Saver does not permit early withdrawals unless you forfeit the 5% interest (you would receive only a very low rate).

    Have a look at other current accounts that pay 3-5%.
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