share investments/portfolio
Discussion
Hey!
We have just had our first grandchild and would like to invest some money in either a portfolio or just one company's shares. Hopefully so that what we invest now will increase and be profitable and increase in value when he is say 18/21 years.
Any ideas advice. Not really a stock market player.
We have just had our first grandchild and would like to invest some money in either a portfolio or just one company's shares. Hopefully so that what we invest now will increase and be profitable and increase in value when he is say 18/21 years.
Any ideas advice. Not really a stock market player.
Jessica,
Congratulations! I'm an IFA but I won't offer advice because a) I can't online anyway, and b) it's been a long day and I'm knackered.
Having said that, take advice on picking a fund that is cheap and in principle, has 'legs' and room/time to grow. Active funds are possibly far too complex and expensive so consider something like a passive tracker fund - dead cheap and simple.
Take your risks and chances early if you have a 20 year investment window - look at Fidelity's new uber cheap trackers (silly money at 0.09%) or look at Vanguard/Black Rock passive trackers as well. A tracker fund is a fund which simply tracks what an index (such as the FTSE 100 is doing).
http://www.telegraph.co.uk/finance/personalfinance...
Whatever you, take authorised and regulated advice that you trust about not touching an expensive brokerage service with a bargepole!!! If any more grandkids are on the way, look at (re)writing your will so that this particular fund is split in a way that you think is fair in the event of your death(s) before the eldest reaches adulthood.
Edited for rubbish typos.
Congratulations! I'm an IFA but I won't offer advice because a) I can't online anyway, and b) it's been a long day and I'm knackered.
Having said that, take advice on picking a fund that is cheap and in principle, has 'legs' and room/time to grow. Active funds are possibly far too complex and expensive so consider something like a passive tracker fund - dead cheap and simple.
Take your risks and chances early if you have a 20 year investment window - look at Fidelity's new uber cheap trackers (silly money at 0.09%) or look at Vanguard/Black Rock passive trackers as well. A tracker fund is a fund which simply tracks what an index (such as the FTSE 100 is doing).
http://www.telegraph.co.uk/finance/personalfinance...
Whatever you, take authorised and regulated advice that you trust about not touching an expensive brokerage service with a bargepole!!! If any more grandkids are on the way, look at (re)writing your will so that this particular fund is split in a way that you think is fair in the event of your death(s) before the eldest reaches adulthood.
Edited for rubbish typos.
Edited by Ginge R on Monday 23 June 19:27
One thing you'll have to decide is whether you keep the money in your name or set up an account under his (Junior ISA for instance). I think you're better off trying to keep control so the money isn't wasted on coke & hookers at 18 and instead is used for something more meaningful like a house deposit or Uni fees - however keeping the money in your name may have implications financially for you.
I'm a novice at this, but I set up my ISA with Charles Stanley Direct and invested into Vanguard Lifestrategy funds (as a core, have since started others) as a low cost option.
One you could look at is the new Woodford fund, if you look at the performance since launch of his old Invesco fund - you'd be pretty happy.
Your investment may go up as well as down etc etc...
I'm a novice at this, but I set up my ISA with Charles Stanley Direct and invested into Vanguard Lifestrategy funds (as a core, have since started others) as a low cost option.
One you could look at is the new Woodford fund, if you look at the performance since launch of his old Invesco fund - you'd be pretty happy.
Your investment may go up as well as down etc etc...
Vanguard Life Strategy funds are definitely worth a look, as is the Black Rock offering. 7 Investment Management also has some asset allocated passives. If I was chatting with a client about setting up a first grand child's investment, I think it would be best to consider retaining the flexibility of keeping things outside a Junior ISA wrapper at outset in case anymore grandkids turned up and you wished you had kept things simple. You could always transfer an accumulated pot into a junior ISA after a few years anyway.
I think you're right to consider Woodford and there are some good deals to be had with him right now. Skandia has announced it at 0.65%, as has Hargreaves. But to get maximum benefit, you should have assets under management already as other costs could erode the overall value of your returns.
Don't forget, there are three things that matter when calculating the real returns from your investment portfolio – the performance of the underlying investment, the tax implications of the vehicle in which your investment is held and the fees that are charged by the provider and the (erm) parasite adviser involved with selecting the investment product. They will all add a hurdle to how well your money really does (look on it like treading water with weights around your ankles).
http://www2.skandia.co.uk/Media-Centre/2014-press-...
Finally, and this most definitely isn't advice, but if you had a lump sum to invest you could take advice on placing your money for junior(s) into a simple investment bond wrapper. You retain complete ownership and control, but can allocate fillets of your investment annually (5% pa) with no liability for tax. After 20 years, if you haven't touched any of it, you can bring forward unused segments and allocate (20 x 5) 100% to you or someone else (junior?). Tax on the rest is deferred and things are starting to get complicated if you wanted to set things up in trust as part of an estate plannng exercise.
If you're not a 30 year old grand mum, you could also take advice about investing via a pension wrapper. You get tax relief going in so the money that you invest grows far more rapidly because George Osborne has added to it, and new legislation allows so called 'trivial' pots at aged 60 to be taken far more kindly and tax efficiently than before.
There are restrictions and caveats and it isn't for everyone, and remember to nominate grand child (and subsequent grandchildren) as the intended beneficiary/ies if you die before you can reach the age (60) which allows you to cash the trivial pot in, in one go. Remember that legislation risk may apply and things are getting intricate now - but whatever you do, do cheap!!! You shouldn't need this fund to be advised or managed by an expensive broker unless your other circumstances warrant it. In which case, it's possibly money well spent if you want peace of mind and if you find someone you trust. In financial services??
http://www.pensionsadvisoryservice.org.uk/media/95...
Is that all too complicated though? For most people, yes, it probably is. So I'll shut up now. I knew I shouldn't have had that strong first coffee before replying. Oxford bypass/ring road hell on tarmac, here we come.
I think you're right to consider Woodford and there are some good deals to be had with him right now. Skandia has announced it at 0.65%, as has Hargreaves. But to get maximum benefit, you should have assets under management already as other costs could erode the overall value of your returns.
Don't forget, there are three things that matter when calculating the real returns from your investment portfolio – the performance of the underlying investment, the tax implications of the vehicle in which your investment is held and the fees that are charged by the provider and the (erm) parasite adviser involved with selecting the investment product. They will all add a hurdle to how well your money really does (look on it like treading water with weights around your ankles).
http://www2.skandia.co.uk/Media-Centre/2014-press-...
Finally, and this most definitely isn't advice, but if you had a lump sum to invest you could take advice on placing your money for junior(s) into a simple investment bond wrapper. You retain complete ownership and control, but can allocate fillets of your investment annually (5% pa) with no liability for tax. After 20 years, if you haven't touched any of it, you can bring forward unused segments and allocate (20 x 5) 100% to you or someone else (junior?). Tax on the rest is deferred and things are starting to get complicated if you wanted to set things up in trust as part of an estate plannng exercise.
If you're not a 30 year old grand mum, you could also take advice about investing via a pension wrapper. You get tax relief going in so the money that you invest grows far more rapidly because George Osborne has added to it, and new legislation allows so called 'trivial' pots at aged 60 to be taken far more kindly and tax efficiently than before.
There are restrictions and caveats and it isn't for everyone, and remember to nominate grand child (and subsequent grandchildren) as the intended beneficiary/ies if you die before you can reach the age (60) which allows you to cash the trivial pot in, in one go. Remember that legislation risk may apply and things are getting intricate now - but whatever you do, do cheap!!! You shouldn't need this fund to be advised or managed by an expensive broker unless your other circumstances warrant it. In which case, it's possibly money well spent if you want peace of mind and if you find someone you trust. In financial services??
http://www.pensionsadvisoryservice.org.uk/media/95...
Is that all too complicated though? For most people, yes, it probably is. So I'll shut up now. I knew I shouldn't have had that strong first coffee before replying. Oxford bypass/ring road hell on tarmac, here we come.
Are you going to spread the risk over sufficient companies and monitor those companies for the next 18-21 years?
Remember that over that timeframe companies come and go - Abbey National, Blue Arrow, Courtaulds, Eurotunnel, Friends Provident, Freeserve, Hawker Siddley, Polly Peck, Railtrack, Rowntree, Thomas Cook have all been in the FTSE 100 and now aren't - some like Polly Peck have gone bust.
I'd take the advice above and get a cheap tracker (0.09% - 0.4% TER) with reinvestment of dividends, preferably in a tax-free wrapper. That way you are buying shares in the FTSE 30 / 100 / UK high dividend companies / US or whatever index you decide to track. You'd have diversification of risk and wouldn't need to monitor it, sort out M&A, rights issues, reinvestment of dividends, tax (which their parents would potentially be liable to) etc.
Edited to add a comma between dividends and tax!
Remember that over that timeframe companies come and go - Abbey National, Blue Arrow, Courtaulds, Eurotunnel, Friends Provident, Freeserve, Hawker Siddley, Polly Peck, Railtrack, Rowntree, Thomas Cook have all been in the FTSE 100 and now aren't - some like Polly Peck have gone bust.
I'd take the advice above and get a cheap tracker (0.09% - 0.4% TER) with reinvestment of dividends, preferably in a tax-free wrapper. That way you are buying shares in the FTSE 30 / 100 / UK high dividend companies / US or whatever index you decide to track. You'd have diversification of risk and wouldn't need to monitor it, sort out M&A, rights issues, reinvestment of dividends, tax (which their parents would potentially be liable to) etc.
Edited to add a comma between dividends and tax!
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