Stocks and shares ISA or ... ?

[anonymous-user]

Hello,

Looking to start saving outside of cash / pension / mortgage and was thinking about putting a small amount each month, with a medium term view, into some of the, historically, secure shares such as HSBC, Shell, GSK with a view to reinvesting any dividends.

Just £2-300 per month split across these three companies, am I best to buy £100 per month or one block of £300 per month?

I have only dabbled in the past and have a number of shares for the company and work for and made a little on Lloyds after the crash!

Not looking to trade or anything, just invest and leave, what is the best platform / site to do this from?

[sidicks]

Trexthedinosaur said:

Hello,

Looking to start saving outside of cash / pension / mortgage and was thinking about putting a small amount each month, with a medium term view, into some of the, historically, secure shares such as HSBC, Shell, GSK with a view to reinvesting any dividends.

Just £2-300 per month split across these three companies, am I best to buy £100 per month or one block of £300 per month?

I have only dabbled in the past and have a number of shares for the company and work for and made a little on Lloyds after the crash!

Not looking to trade or anything, just invest and leave, what is the best platform / site to do this from?

My view is that you're be better off investing in a passive UK Tracker fund and having much more diversification (and any dividends will automatically be reinvested for you).

[anonymous-user]

Or is this even the right idea, an ISA?

I have used 'SharePrice' in the past and never had any problems finding / withdrawing.

[anonymous-user]

Thanks Sidicks, I know there are a few recommendations on here, Hargreaves perhaps?

i just want to deposit £300 pm and leave it really.

[sidicks]

Trexthedinosaur said:

Thanks Sidicks, I know there are a few recommendations on here, Hargreaves perhaps?

i just want to deposit £300 pm and leave it really.

An Isa will give you tax-free growth, so probably the best choice (assuming you've not used up your ISA allowance on your cash savings)?

I use HL for investments, but there may be other better / cheaper options.

[BoRED S2upid]

I’d just drip feed into a couple of funds rather than try and select shares yourself even safe shares can tumble in value.

[Countdown]

sidicks said:

My view is that you're be better off investing in a passive UK Tracker fund and having much more diversification (and any dividends will automatically be reinvested for you).

Not sure if your point about automatic reinvestment is right.....?

VUKE for example pays the dividend into the "cash" bit of my S&S ISA, as do all the other shareholdings. Periodically I decide where to reinvest the dividends, it's not automatic. Are you thinking of an Accumulator investment fund?

[sidicks]

Countdown said:

sidicks said:

My view is that you're be better off investing in a passive UK Tracker fund and having much more diversification (and any dividends will automatically be reinvested for you).

Not sure if your point about automatic reinvestment is right.....?

VUKE for example pays the dividend into the "cash" bit of my S&S ISA, as do all the other shareholdings. Periodically I decide where to reinvest the dividends, it's not automatic. Are you thinking of an Accumulator investment fund?

I meant invest in a (total return) Tracker fund that automatically reinvests dividends.

[red_slr]

Vanguard do their own SSISA

[Countdown]

red_slr said:

Vanguard do their own SSISA

Are you not limited to Vanguard products only?

[Jon39]

Trexthedinosaur said:

Looking to start saving outside of cash / pension / mortgage and was thinking about putting a small amount each month, with a medium term view, into some of the, historically, secure shares such as HSBC, Shell, GSK with a view to reinvesting any dividends.

Just £2-300 per month split across these three companies, am I best to buy £100 per month or one block of £300 per month?

You have the right idea.
Most on here will suggest buy funds, but here are some points that you might want to consider.

Buy stakes in businesses directly gives you a feeling of being a little more involved, and you will gain practical experience of investment.
Holding long-term is very sensible and often proves to be the most successful way to invest. You could if you want to, buy in certificated form, which has an extra cost but after that you will never pay a holding fee to anyone. Need to keep the certificates very carefully.
If you do follow this route, I would not buy every month, because overall purchase costs will be too much. Perhaps make your purchases every six months.
Hopefully, as your investment grows, you can also build holdings within an ISA, so that your taxes are minimised.

Funds are easy. You don't have to have any knowledge or experience, but on average they don't perform as well as people imagine. Few 'experts' are able to beat the average, and the industry incentive are fees, not how their customer's money performs, although get it too wrong and the customers eventually leave. They quote fees which might not seem much, but multiply that over say 30 years. In addition you pay have to pay hidden fees, e.g.. transactions will take place within the fund and who pays for those?

You mention shares and your employer. If they are in option schemes, then go for the maximum. You cannot lose, so it is the best investment opportunity anyone can have. Just have to hope that the business grows well.

Best of luck.

Edited by Jon39 on Monday 9th October 08:40

[sidicks]

Jon39 said:

You have the right idea.
Most on here will suggest buy funds, but here are some points that you might want to consider.

Buy stakes in businesses directly gives you a feeling of being a little more involved, and you will gain practical experience of investment.

What sort of sense of involvement do you have if you are holiding 0.0000000001% of a companies shares?

Jon39 said:

Holding long-term is very sensible and often proves to be the most successful way to invest. You could if you want to, buy in certificated form, which has an extra cost but after that you will never pay a holding fee to anyone. Need to keep the certificates very carefully.
If you do follow this route, I would not buy every month, because overall purchase costs will be too much. Perhaps make your purchases every six months.

So as well as a lack of diviersificatiin you have a significant market timing risk!

jon39 said:

Hopefully, as your investment grows, you can also build holdings within an ISA, so that your taxes are minimised.

Why can’t you build holdings within the ISA wrapper from day 1?

jon39 said:

Funds are easy. You don't have to have any knowledge or experience, but on average they don't perform as well as people imagine. Few 'experts' are able to beat the average, and the industry incentive are fees, not how their customer's money performs, although get it too wrong and the customers eventually leave.
They quote fees which might not seem much, but multiply that over say 30 years.

In addition you pay have to pay hidden fees, e.g.. transactions will take place within the fund and who pays for those?

Who pays for the transaction costs when you trade yourself?

[red_slr]

Countdown said:

red_slr said:

Vanguard do their own SSISA

Are you not limited to Vanguard products only?

Yaha.

[Jon39]

sidicks said:

What sort of sense of involvement do you have if you are holiding 0.0000000001% of a companies shares?

Yes miniscule obviously, but even with a tiny ownership you are probably more likely to follow what the business is doing, you receive all company communications, follow price changes, can even go to the AGM and talk to the directors if you want to.
To be a successful DIY investor, it helps to have knowledge, experience and a feeling for what is going on, so some direct ownership should be an encouragement to learn more.

sidicks said:

So as well as a lack of diviersificatiin you have a significant market timing risk!

Bound to be the situation when we all start. I do know people who had bad luck with their very first shareholding, and never bought shares again. A shame, but that is always possible. Funny, because some of those shareholdings did really well later on, but they had sold before then.
It obviously takes everyone time to build about 25 holdings.

sidicks said:

Why can’t you build holdings within the ISA wrapper from day 1?

No reason why not, but with initial modest values, might as well keep fees to nil. The CGT and dividend allowances are in place.

sidicks said:

Who pays for the transaction costs when you trade yourself?i

Yes but my point being, you know how much when paying yourself, but with funds it remains secret.


( I only post on here, because it might encourage a few to think about equities. )

[sidicks]

Jon39 said:

Yes but my point being, you know how much when paying yourself, but with funds it remains secret.


( I only post on here, because it might encourage a few to think about equities. )

Fair comments (but there are many economies of scale that a fund can achieve)!

[jonny70]

Trexthedinosaur said:

Hello,

Looking to start saving outside of cash / pension / mortgage and was thinking about putting a small amount each month, with a medium term view, into some of the, historically, secure shares such as HSBC, Shell, GSK with a view to reinvesting any dividends.

Just £2-300 per month split across these three companies, am I best to buy £100 per month or one block of £300 per month?

I have only dabbled in the past and have a number of shares for the company and work for and made a little on Lloyds after the crash!

Not looking to trade or anything, just invest and leave, what is the best platform / site to do this from?

Do you have 6 months easy across cash for emergencies ? And decent pension provisions?

I would recommend Hargreaves Landsdown and I would invest in funds rather than shares for 2 reasons; the transaction costs of buying 3 lots of £100 shares each month will be high where as with funds there is no dealing costs to buy on a monthly basis.
Secondly if your not looking to trade and just hold and forget then funds are more diversified. Have a look at funds like Fundsmith , Slater Growth , Lindsell Train and Marlborough Special Situations etc