Where do I start?

[smogg21]

Hi,

I'm brand new to investing and am having a hard time understanding the minefield of information available on different investment strategies for my particular goals.

Essentially I'm looking to grow my money over the next 25-30 years to support retirement (this is in addition to a private pension I have) and I'm interested in a fund that will pay dividends which I can roll back into the fund to take advantage of compound growth over the longterm. I want to pay monthly into this fund circa 1200 and I won't be making an initial lumpsum deposit (so this will be grown from zero).

I've been looking at various funds on HL website which I think are suitable but they mention that this particular fund should only make up 6% of my overall portfolio.

What I am after is a single fund that I can pay directly into and grow my money for the future - where do i start?

[ReformedCharacter]

Hi,

I'm brand new to investing and am having a hard time understanding the minefield of information available on different investment strategies for my particular goals.

Essentially I'm looking to grow my money over the next 25-30 years to support retirement (this is in addition to a private pension I have) and I'm interested in a fund that will pay dividends which I can roll back into the fund to take advantage of compound growth over the longterm. I want to pay monthly into this fund circa 1200 and I won't be making an initial lumpsum deposit (so this will be grown from zero).

I've been looking at various funds on HL website which I think are suitable but they mention that this particular fund should only make up 6% of my overall portfolio.

What I am after is a single fund that I can pay directly into and grow my money for the future - where do i start?

You could have a look at Vanguard's Index Funds:

https://www.vanguardinvestor.co.uk/

RC

[AsleepInYorkshire]

Hi,

I'm brand new to investing and am having a hard time understanding the minefield of information available on different investment strategies for my particular goals.

Essentially I'm looking to grow my money over the next 25-30 years to support retirement (this is in addition to a private pension I have) and I'm interested in a fund that will pay dividends which I can roll back into the fund to take advantage of compound growth over the long term. I want to pay monthly into this fund circa 1200 and I won't be making an initial lumpsum deposit (so this will be grown from zero).

I've been looking at various funds on HL website which I think are suitable but they mention that this particular fund should only make up 6% of my overall portfolio.

What I am after is a single fund that I can pay directly into and grow my money for the future - where do I start?

Make a cup of tea, or if you prefer coffee. Someone will be along shortly.

You're going to need to be patient with yourself and don't rush to start investing until you have a clear plan.

It's only a minefield if you set yourself timelines that are unachievable. You can start with a simple fund and pay into that as and when you want and you can, if you feel it's what you want to do, look at other areas of investment later. There will be a strategy that you are comfortable understanding and managing and that allows you to sleep nights as it's within your tolerance for risk.

Warren Buffett advises people to invest in the S&P 500. So my first suggestion is put that on your list of funds to consider.

AiY(D)

[tjh290633]

I know what I would have done in your circumstances. I would have started saving monthly into an Investment Trust. Back in 1958 I did that, but into a unit trust specializing in ITs. Knowing what I do know, I would go straight into one of the global investment trusts, Alliance, F&C or Witan.. there are others, of course. I have been doing that for my grandchildren over the last 20 years and FCIT has been the best performer, giving a total return over 10%, but all three have done well.

Your best approach is to open a low cost account with an online broker. You mention HL, who took over Witan's Jump savings scheme. You need a SIPP by the look of it. Check out the alternatives, looking at costs and charges. HL are expensive if you invest in funds. Less so for shares.

TJH

[JohnW]

They’re all sound ideas, and you want a fund, but you could really benefit from getting your own grounding in investing rather than putting your faith in the advice of any Tom, dick or Harry whom you can’t go back and question if your investment turns sour.
Smarter Investing is a very good book by Tim Hale. If you want free e-books:
https://investingroadmap.wordpress.com/ Very comprehensive.
https://drive.google.com/file/d/14gCYdH ... RkCMU/view Is only 40 pages if that’s your limit at this stage, written by a dad for his adult children. And,
http://flip4u.org/docs/If%20You%20Can%2 ... nstein.pdf Is only 16 pages, and the style might appeal to you.
I think that’s where you start.

[smogg21]

Thanks everyone for all your great advice - really helpful in understanding some of my options, much appreciated!

[Dod101]

I know what I would have done in your circumstances. I would have started saving monthly into an Investment Trust. Back in 1958 I did that, but into a unit trust specializing in ITs. Knowing what I do know, I would go straight into one of the global investment trusts, Alliance, F&C or Witan.. there are others, of course. I have been doing that for my grandchildren over the last 20 years and FCIT has been the best performer, giving a total return over 10%, but all three have done well.

Your best approach is to open a low cost account with an online broker. You mention HL, who took over Witan's Jump savings scheme. You need a SIPP by the look of it. Check out the alternatives, looking at costs and charges. HL are expensive if you invest in funds. Less so for shares.

TJH

I would endorse exactly what TJH has said as I did the same. Investment trusts are a good way to start because their accounts are usually fairly easy to understand and you can watch what the managers are doing. I have held Alliance since these days, in my case about 30 years ago and i wish I had started earlier.

Index funds are the popular way these days but I do not think you will learn very much about investing that way.

Dod

[JohnW]

Index funds are the popular way these days but I do not think you will learn very much about investing that way.

And therein lies their democratising beauty: you don’t have to know much about investing in order to get your share of the returns the market has on offer (less costs). No wonder so many in the finance field have been so against them from the start; they’ve been made redundant.

[Dod101]

Index funds are the popular way these days but I do not think you will learn very much about investing that way.

And therein lies their democratising beauty: you don’t have to know much about investing in order to get your share of the returns the market has on offer (less costs). No wonder so many in the finance field have been so against them from the start; they’ve been made redundant.

And of course taken to extremes, if it were not for active traders, there could be no index funds.

Dod

[JohnW]

Indeed, and grateful we are for their efforts to make prices sesnsible.

[Bagger46]

The OP is starting at a good time, with markets as they are. They might go lower of course, but at least the current prices on offer at not flying at ridiculous levels as they were last year.

First bit of advice: With HL I would not touch FUNDS(OEICs and ITs), since the ad valorem charges are just plain daylight robbery. So only consider ITs, ETfs and individual shares.

Second bit of advice: At £1200 a month, I would invest accumulated £3600 every three months, timed to coincide with say quarterly divi to maximise things cost effectively. The OP should find, as most of us did, that the monthly available money increases sharply in later years.

Third bit of advice: Similarly to what has been said above by some, the OP could do worse than concentrating on ITs until a portfolio of a few hundred £ks has been built. There is plenty to be learnt by studying ITs annual reports and accounts for a beginner. Many of us very experienced investors started that way, and retain massive proportion of their wealth in ITs to this day with no regrets.

Fourthly: RESIST the false lure of HIGH YIELD. The ONLY thing with matters in the end is the size of the pot built, and no matter what ANYBODY tells you, ALL that investors get is TOTAL RETURN, whatever type of investors they think they are. So ignore the HYP board, I certainly do, so do all my many investor friends, as we have massive skin in that game.

Choose either just one generalist such as FCIT or Brunner, etc...or a very small basket of ITs ( 6 max say is plenty) with very different remits to each other and not UK market centred ( I could help off board on this if required). With such a long investing horizon, I would ignore so called Wealth Preservation ITs, they might appear to protect on the way down, but they badly lag on the way up in my experience.

OP, Take your time in deciding how to proceed, there is no rush.

Bagger

[BullDog]

The OP is starting at a good time, with markets as they are. They might go lower of course, but at least the current prices on offer at not flying at ridiculous levels as they were last year.

First bit of advice: With HL I would not touch FUNDS(OEICs and ITs), since the ad valorem charges are just plain daylight robbery. So only consider ITs, ETfs and individual shares.

Second bit of advice: At £1200 a month, I would invest accumulated £3600 every three months, timed to coincide with say quarterly divi to maximise things cost effectively. The OP should find, as most of us did, that the monthly available money increases sharply in later years.

Third bit of advice: Similarly to what has been said above by some, the OP could do worse than concentrating on ITs until a portfolio of a few hundred £ks has been built. There is plenty to be learnt by studying ITs annual reports and accounts for a beginner. Many of us very experienced investors started that way, and retain massive proportion of their wealth in ITs to this day with no regrets.

Fourthly: RESIST the false lure of HIGH YIELD. The ONLY thing with matters in the end is the size of the pot built, and no matter what ANYBODY tells you, ALL that investors get is TOTAL RETURN, whatever type of investors they think they are. So ignore the HYP board, I certainly do, so do all my many investor friends, as we have massive skin in that game.

Choose either just one generalist such as FCIT or Brunner, etc...or a very small basket of ITs ( 6 max say is plenty) with very different remits to each other and not UK market centred ( I could help off board on this if required). With such a long investing horizon, I would ignore so called Wealth Preservation ITs, they might appear to protect on the way down, but they badly lag on the way up in my experience.

OP, Take your time in deciding how to proceed, there is no rush.

Bagger

That's great advice. I bolded what I consider the most important bit. I would throw JP Morgan Global Growth into the pot as a suggested long term steady investment option. It pays a dividend but as OP said, it can be reinvested. If possible, the pot should be invested inside an ISA wrapper.

[AleisterCrowley]

Predictably, I'm going to say...meh... stick a regular investment into a really cheap global tracker, and do something more interesting with your time

ITs are great if you pick the right ones at the right time, as with all managed investments
As an example SMT (Scottish Mortgage) was a great investment, until it wasn't
About £5.50 three years ago (July 19)
You could have sold at £15.00 in late 2021

If you'd have invested in late 2021 though you'd be sitting on a loss of around 50% in 7 months

[Dod101]

Predictably, I'm going to say...meh... stick a regular investment into a really cheap global tracker, and do something more interesting with your time

ITs are great if you pick the right ones at the right time, as with all managed investments
As an example SMT (Scottish Mortgage) was a great investment, until it wasn't
About £5.50 three years ago (July 19)
You could have sold at £15.00 in late 2021

If you'd have invested in late 2021 though you'd be sitting on a loss of around 50% in 7 months

Re Scottish Mortgage, that is of course an extreme example, and volatility can be your friend, especially with a long time horizon but no one has suggested it until you did. The ITs that have been mentioned are much more measured in their performance and all good for long term good return.

Dod

[AleisterCrowley]

I'm sure a decent selection of ITs would do well, but if you buy a big enough basket of them (for diversity, stability etc) you end up with a 'closet global tracker' with higher costs than a simple global ETF...

SMT was often mentioned as a stalwart , along with CTY
I did actually buy small chunks of both many years ago, both have done fine from a TR point of view

[JohnB]

I suggest the O/P visits movevator.com and reads the articles there, and buys Lars Kroijer's book Investing Demystified to decide wher they stand on tracker funds. If they like trackers, the simplest approach is a world index tracker, which has a bit of everything, and needs no thought other than tax.

[monabri]

First bit of advice: With HL I would not touch FUNDS(OEICs and ITs), since the ad valorem charges are just plain daylight robbery. So only consider ITs, ETfs and individual shares.

Bagger

Do you mean Unit Trusts here ...

[Bagger46]

First bit of advice: With HL I would not touch FUNDS(OEICs and ITs), since the ad valorem charges are just plain daylight robbery. So only consider ITs, ETfs and individual shares.

Bagger

Do you mean Unit Trusts here ...

Yes of course, it is a typo. I meant to type UTs.

Thank you for pointing this out, as there is an important distinction.

Bagger

[AleisterCrowley]

I suggest the O/P visits movevator.com and reads the articles there, and buys Lars Kroijer's book Investing Demystified to decide wher they stand on tracker funds. If they like trackers, the simplest approach is a world index tracker, which has a bit of everything, and needs no thought other than tax.

For the avoidance of doubt - correcting typo;
https://monevator.com/
https://monevator.com/category/investin ... investing/

[nmdhqbc]

Essentially I'm looking to grow my money over the next 25-30 years to support retirement (this is in addition to a private pension I have) and I'm interested in a fund that will pay dividends which I can roll back into the fund to take advantage of compound growth over the longterm. I want to pay monthly into this fund circa 1200 and I won't be making an initial lumpsum deposit (so this will be grown from zero).

i think someone said above to take your time. i have to disagree. so many take forever learning about investing and never get started. my advise is to go for the default i suggest below straight away and then take your time learning about it all if you so desire. then at least your money is working in a good default option on the off chance that the learning stage never ends.

to me the default should be a simple global world tracker. no bonds given the over 25 years timeframe. If you use HL or other broker that charges a % fee on open ended funds i suggest the ETF below which pays out the dividend.
VANGUARD FUNDS PLC FTSE ALL-WORLD UCITS ETF (USD) DISTRIBUTING - GBP (VWRL)

If you use a fixed fee broker like iWeb or ii then go for this open ended fund. you mentioned wanting dividends which you can re-invest but open ended funds like the first one below do it automatically. that's what the "accumulation" in the name means. the price has the dividends built into it. complicates your tax returns though so only buy the accumulation units in tax shelter like ISA/LISA/SIPP. use the "income" option in taxable accounts.
HSBC FTSE ALL WORLD INDEX CLASS C - ACCUMULATION (GBP)
HSBC FTSE ALL WORLD INDEX CLASS C - INCOME (GBP)