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Where do I start?

Investment discussion for beginners. Why you should invest your money, get help getting started
DrFfybes
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Re: Where do I start?

#514658

Postby DrFfybes » July 15th, 2022, 4:32 pm

smogg21 wrote: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)
[...]

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?


As others have said - a Global Tracker or IT is a good place to start.

But first you need to decide what tax wrapper to use. With £1200/month spare I assume you are a higher rate taxpayer, in which case a SIPP would be a good option, however there is noting to stop you also investing in an ISA. One is taxed on the way in, the other on the way out (at whatever your rate will be when you draw it).

And with £1200/month to invest, HL wil start to cost more than one of the fixed fee platforms after 3 years.

Paul

AleisterCrowley
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Re: Where do I start?

#514786

Postby AleisterCrowley » July 16th, 2022, 12:50 pm

nmdhqbc wrote: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)

.

Someone, Geoff1000?, pointed out that a mix of Vanguard's VEVE and VFEM cover the same (?) as VWRL but at a lower cost
I think it's about 90% VEVE, 10% VFEM
Please check first...

Brokers table from Monevator:

https://monevator.com/compare-uk-cheape ... e-brokers/

I use HSDL, and InvestEngine for my second account
InvestEngine has a limited range of ETFs available, but it's FREE...
Disclaimer: I have a small (<£2k) CrowdCube stake in InvestEngine

nmdhqbc
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Re: Where do I start?

#514788

Postby nmdhqbc » July 16th, 2022, 1:05 pm

AleisterCrowley wrote:Someone, Geoff1000?, pointed out that a mix of Vanguard's VEVE and VFEM cover the same (?) as VWRL but at a lower cost
I think it's about 90% VEVE, 10% VFEM


yeah i was paying particular attention to this bit of the original post and trying to keep it as simple as possible...

smogg21 wrote: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?

AleisterCrowley
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Re: Where do I start?

#514794

Postby AleisterCrowley » July 16th, 2022, 1:26 pm

Yes, VWRL is a good starting point - agree a mix makes it more complex, depends on how keen one is to get costs right down
There are other global trackers that are cheaper than VWRL - I think Monevator did a survey - which may be a bit out of date now

kempiejon
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Re: Where do I start?

#514795

Postby kempiejon » July 16th, 2022, 1:32 pm

smogg21 wrote: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?


Others have said a global collective might be your thing trackers, ETFs, Investment Trusts etc as your single shot. It's said that most funds do not beat an index after costs, there are some cheap ways to follow an index. Long term fees can compound too.
Before you invest your other finances need to be in order. Have you a good slug of cash to get you through a catastrophe? A buffer for a new car or roof and redundancy? Are your credit cards cleared each month, do you have a mortgage if yes have you considered overpaying it.
You have a work pension, taking your own SIPP too means you'd defer tax on the way in and can then get 25% tax free from 55/7. If you want to retire/downscale early a SIPP might not suit but funds there are protected from bankruptcy and don't usually count towards any benefits.

LooseCannon101
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Re: Where do I start?

#515027

Postby LooseCannon101 » July 17th, 2022, 12:46 pm

F&C Investment Trust (FCIT) has been mentioned. I can thoroughly recommend this trust as an investment vehicle over the long term.

Columbia Threadneedle manage the portfolio of FCIT, and have a great savings plan which only costs £72 per year for an ISA. The plan gives you automatic access to the FCIT's annual general meeting (AGM) - usually in May, and also to an excellent online account facility. Paul Niven who actually manages the portfolio, gives regular updates both online and at the AGM.

As others might say, the plan limits you to only those trusts managed by Columbia Threadneedle, but in my experience, FCIT is a 'one-stop shop' if one wishes to have a highly-diversified world equity portfolio. The expression 'one-stop shop' was used by a former chairman - Simon Fraser, when asked what the trust's unique selling point is to potential investors.

Buying FCIT or similar trust monthly and re-investing dividends over the long term, through the inevitable market lows and highs, is a good strategy - probably beating 90% of retail investors (that's you and me).

elephanthunt11
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Re: Where do I start?

#518566

Postby elephanthunt11 » July 31st, 2022, 4:07 pm

I've read through most of the posts here, some great advise and in my opinion, some questionable.

What you're going to find it conflicting information everywhere and depending on who you ask. My opinion is that some of the information you've been given is great but too complicated for where you are in your investment journey; this applies to most of what you've been told about ITs (investment trusts).

The first thing I would recommend is to maintain your monthly contributions. Do not try to time the market by contributing quarterly to coincide with dividend payments as a previous poster has suggested. This is unnecessarily complicated, doesn't actually make much sense and is effectively timing the market, which all of us agree is a fool's game.

Right, let's begin.

1. Open a stocks and shares ISA with HL. They are not the cheapest but their app is really well developed and their customer service is great.
2. Decide whether you are looking for an income portfolio or a capital growth portfolio. Given your time horizon, I couldn't, with any integrity, advise you to gear towards an income generating portfolio.
3. Before you invest, you need to decide how you want your portfolio structured: understand the term 'Core/Satelltie' by doing some googling. Your core (60-70%) should be a very broad based, highly diversified low cost index tracker. A global fund or an S&P 500 fund is probably your best bet at this stage. ETFs will be the better option later. At this stage, ETFs are traded like stocks, you will therefore incur an £11.95 fee per month, on a £1200 contribution this will be a whole 1%. Fund dealing is commission free on HL. When it gets to a certain value ETFs are better, right now they absolutely are not.
4. Your satellites should be commensurate with whatever level of risk you are willing to take. These can be investment trusts, or direct equities. My advice is to stay away from everything except the most boring index tracker for around two years, explained below.

This is basically it as far as my advice goes, but, the biggest piece of advice I can give you right now is just build up your core holding .
The reason I say this is that successful investing is largely strategic lethargy: doing nothing. I believe 80% of successful investing is stomach, not brain. Managing your emotions towards market fluctuations is not something that happens overnight. I'm 30 as of last week, started investing in 2017/18, stock portfolio is £70k right now. If I had a £70k PF to manage 4/5 years ago, a -3% would've destroyed me watching 2k just get wiped off my holdings in cold blood. Now it's 'just another day in the market'. You will build you emotional tolerance to fluctuation by investing consistently each month.

Some books I would recommend:

The Simple Path to Wealth by J L Collins. The definitive guide to index investing.

Common Sense Investing by John Bogle, founder of Vanguard.

In summary, there is a lot of conflicting information out there. When you realise the undeniable power of indexing you simply won't be able to go with an alternative despite how exciting holding direct equities may be. Every piece of data in investing shows that passively tracking the market will beat professional stock pickers 80% of the time over a ten year period, increasing to 99% of the time over a 30 year period.

Feel free to ask questions, I'm happy to elaborate on any of the points made in this post.

Itsallaguess
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Re: Where do I start?

#518573

Postby Itsallaguess » July 31st, 2022, 4:17 pm

elephanthunt11 wrote:
the biggest piece of advice I can give you right now is just build up your core holding .

The reason I say this is that successful investing is largely strategic lethargy: doing nothing. I believe 80% of successful investing is stomach, not brain.

Managing your emotions towards market fluctuations is not something that happens overnight. I'm 30 as of last week, started investing in 2017/18, stock portfolio is £70k right now.

If I had a £70k PF to manage 4/5 years ago, a -3% would've destroyed me watching 2k just get wiped off my holdings in cold blood. Now it's 'just another day in the market'.

You will build you emotional tolerance to fluctuation by investing consistently each month.


Great advice, and fundamental to long term investing outcomes regardless of any underlying strategy involved.

Cheers,

Itsallaguess

EthicsGradient
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Re: Where do I start?

#518600

Postby EthicsGradient » July 31st, 2022, 5:40 pm

elephanthunt11 wrote:3. Before you invest, you need to decide how you want your portfolio structured: understand the term 'Core/Satelltie' by doing some googling. Your core (60-70%) should be a very broad based, highly diversified low cost index tracker. A global fund or an S&P 500 fund is probably your best bet at this stage. ETFs will be the better option later. At this stage, ETFs are traded like stocks, you will therefore incur an £11.95 fee per month, on a £1200 contribution this will be a whole 1%. Fund dealing is commission free on HL. When it gets to a certain value ETFs are better, right now they absolutely are not.

HL, like most platforms, charges less for regular investing of ETFs/stocks - £1.50 per month: https://www.hl.co.uk/investment-service ... rect-debit

With their ISA account charges on ETFs/stocks of 0.45% capped at £45, that cap operates from £10,000 invested upwards. So after about a year, using ETFs could start to be cheaper than funds.


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