Investments, funds etc.

I may well have a couple of grand coming to me in the near future. I was thinking I'd just stick it in an ISA but someone has told me that you can make a lot more money by investing in investment accounts, managed funds etc. All this is gobbledygook to me at the moment so has anyone got any advice on how to dip my toe into this world?!

 

Try spread betting. Profit for fun.

 

I toyed with the idea of investing about a 100 a month in shares...any know much about this..? - worth doing..?

 

A low cast tracker fund can be fun and does well over the medium term, beating most managed funds.

 

Can you start one of them in most high street banks Bob, or is it better to go to an investment bank for these things?

 

In my completely non-professional opinion (ie. this is not advice) there are generally better returns from investing in stocks and shares if performance is analysed over an extended period.

This naturally means that short term gains are difficult to get. In order to stand a chance of short term gains from investment in stocks you would have to take bigger risks.

It is also quite possible that you could invest every month for a couple of years and end up with a loss, yet if you kept investing you are statistically likely to see gains which would outstrip interest on cash investments.

Also if you invest a fixed sum each month, when times are tough and shares are performing badly - yes you may be losing money on your existing investment - but your pound/cost ratio will be much better at that point. This means your monthly investment is buying more for every pound. As such when shares start to grow those pounds invested during a slump will be making more profit for you.

In summary - if you don't expect immediate returns and won't need to dip into the money then investing in a FTSE 100 or All Share tracker, using your ISA allowance as the tax free vehicle, would be a decent idea in my opinion.

You may benefit from talking to an IFA and doing some research into which tracker ISA's are recently considered well performing.

 

Many investment managers and managed funds offer isas and isas have the advantage of being tax free. I have isas with newton (oriental opportunities) and artemis (uk smaller companies and special situations). I have increased my capital two and half times in 6 years though I did get in at the dead arse lows (partially by design). Investing in china is likely to be good for at least 5 more years.

 

m9myk...you've screwed up your first post! Stick your question in HiFi.

 

You should be prepared to lock the money away for a minimum of 5 years though. Anything can happen in the short-term (and it normally does)

 

Thanks for the tips folks. I'll go armed with a little more knowledge now although think I might be consulting an IFA or someone else in the business!

Otherwise I think I could get a good return from putting it all on one colour on the roulette table. I suppose I have no other tips on this except for what Wesley Snipes says...always bet on black! Wish me luck!

 

WTF? Are you not familiar with the concept of upgrading?

Why invest in the stock market when you can buy a Naim super-cap instead

DT

Though in all seriousness, if you're interested in "dipping a toe in", you could do worse than putting £1500 in a straight interest-bearing ISA and trading the other £500 in a spread-betting account. It's very risky, and you'll probably loose all your money. However, it WILL provide you with a suitably steep learning curve for not very much capital (in the grand scheme of things).

You'll be a raving stock geek within six months, which should help you invest the remaining £1500 a little more wisely (hopefully!). Spread betting is also good because you can make money on falling share prices too. Considering current valuations, this could be a very desirable tool to have at your disposal

Coincidentally, I recently gave my 18 year old brother a £2k pot to start trading with, in the vain hope of getting him interested in a proper job in the City (and not stacking shelves in Wollies for the rest of his life). I've given him a minimum ten stock diversification floor, and two of them must be shorts. Once I'm confident he's chosen them for the right reasons, and thought the investments through properly, we'll get the "portfolio" vested. I think it's worth losing £2k, if it gives him a sense of something greater than moping-up spilt milk in aisle seven

 

When consulting an IFA be aware that there are different types. There are those who charge a fee and who are not dependent on your product choice for their money and would feed back any commission back to you and those who don't charge a fee but earn their money from the commission you pay them via your choices, and who are often tied to certain companies products. Many bank advisers are this type.
Personally I would never take financial advice from anyone who had a pecuniary interest in my choices.

Do not indulge in spread betting, it is for fools who have money to throw away.

 

pay it off your mortgage...

 

He's right. The vast majority of IFA's are only a few cells up the evolutionary ladder from troglodytes. I wouldn't touch them with a poo-stick.

DT

 

Put it in a tracker ISA. Or if you have a house, pay it off your mortgage (as mentioned above).

For most of the population with only moderate amounts of spare cash, investing doesn't need to be much more complicated than that. IFA's won't tell you that of course.

Do you really want to be funding all those lovely city bonuses going around this year?

 

I wonder how many IFAs actually invest in the same products they 'flog'....that would be an interesting survey..?

The big question is when/if you need to spend it & could you afford to lose it?
If it's needed to pay off the car in three years time...pay it off now!
If it's 'gambling' money, and you really want a chance of a life changing return from it, don't give it to someone else to gamble - they'll just take a chunk of it for themselves & probably not do much better than a high interest account anyway. Gamble it yourself, but be prepared to lose it.

Personally, & with no advice intended, I opened up a low cost share trading account (with the likes of idealing or Hoodless brennon etc).
Spend a little time reading up about some shares, decide what sector you think will be a grower, & buy some shares in a small company with potential over the next say 5 years. Set a stop loss at whatever you think you can afford to lose (but make it more than 5-10% if in small shares), then walk away & forget about it.
You won't be able to forget about it.
If it comes about that you are fortunate enough to start worrying about capital gains, sell some & stuff the proceeds in an ISA.
I have my 'gambling' funds in OXB & TRP right now (Not advice, just money where mouth is!)