FTSE100 tracker

[Ari]

Actually came to say, looks like I might break even again tomorrow!

[Ari]

Quick monthly(ish) update.

FTSE100 tracker is up £420 and the World Tracker up £28 (plus a few quid in dividends) for a total return currently of 5.57%.

Monthly amount is still going in to the FTSE100 plus the (very) occasional top up of the World Tracker (which I intend to top up more, but keep having other expenses taking priority).

[GT03ROB]

Markets have been very kind this year so far.

[Ari]

It's a bit of a win/win for me, given it's a long term thing.

If they go up I get to feel good about my 'wise investments', if they drop I get to buy more with my regular drip feed of money into it.

[Ari]

It was looking so good...

FTSE100 tracker now just £99.34 up, All World is £2.08 down.

Long term. Think long term...

[daddy cool]

Ari said:

It was looking so good...

FTSE100 tracker now just £99.34 up, All World is £2.08 down.

Long term. Think long term...

Ari, hows it looking today? Ive been dabbling in S&S ISA for just over a year now, and as of a week ago I was about 1% down... and this weeks almost all of my funds have shot up, seeing me about 3% up today!

(Fully expect them to go down again next week, but enjoying the high now, and feeling like a Poundland-Warren Buffet for a few days)

[Ari]

Sorry, just seen this.

FTSE100 tracker, £11,160 paid in, current value £11,607 so £447 up
All World tracker, £1,157 in, current value £1,229 so £72 up

Plus some dividends minus some fees, the exact figure is £516.64 up. 6.05% in about a year and a half.

Good news!

[Ellb123]

First of all, I'd just like to thank Ari and everyone else for sharing their experience and knowledge throughout this thread, it’s not often a thread doesn’t descend into petty arguments these days but I’m glad this has stayed on topic and has provided some great information for people like me.

A couple of questions if you don’t mind Ari;
Would you have still invested the same way if you knew now what you did at the beginning (obviously not including what has happened to the increase/decrease in value), would you of put that £5k in the world tracker instead?

How long do you plan to stick this out for? I’m guessing this is a retirement fund or something similar?

And I guess a general question to the PH experts;
I’ve read Millionaire Teacher which echo’s a lot of the thought in here about investing in an index fund rather than an actively managed fund or trying to do it yourself by picking and choosing. I’m looking to start the same kind of journey as Ari here, although my circumstances seem slightly different, I’m 24, currently saving for a house (almost there) and earn around £20k PA. I was planning to start off with a £100 deposit and drip feeding in £50 per month, until I can afford a little more to put in and grow some confidence with the investment, treating this as a long-term thing and possibly an early retirement fund. I’m telling myself that it’s better to be in and started with a smaller amount than waiting say 5 years and investing more then, I’d be interested to hear your thoughts.

[emicen]

Ellb123 said:

First of all, I'd just like to thank Ari and everyone else for sharing their experience and knowledge throughout this thread, it’s not often a thread doesn’t descend into petty arguments these days but I’m glad this has stayed on topic and has provided some great information for people like me.

A couple of questions if you don’t mind Ari;
Would you have still invested the same way if you knew now what you did at the beginning (obviously not including what has happened to the increase/decrease in value), would you of put that £5k in the world tracker instead?

How long do you plan to stick this out for? I’m guessing this is a retirement fund or something similar?

And I guess a general question to the PH experts;
I’ve read Millionaire Teacher which echo’s a lot of the thought in here about investing in an index fund rather than an actively managed fund or trying to do it yourself by picking and choosing. I’m looking to start the same kind of journey as Ari here, although my circumstances seem slightly different, I’m 24, currently saving for a house (almost there) and earn around £20k PA. I was planning to start off with a £100 deposit and drip feeding in £50 per month, until I can afford a little more to put in and grow some confidence with the investment, treating this as a long-term thing and possibly an early retirement fund. I’m telling myself that it’s better to be in and started with a smaller amount than waiting say 5 years and investing more then, I’d be interested to hear your thoughts.

With your age, initial contribution amount, intended monthly contribution and possible desire to buy a house, I would suggest you definitely want to be looking at a Lifetime ISA (LISA).

The government 25% top up makes this tough to beat if it is genuine long term (house or retirement) savings you are aiming for.

[putonghua73]

Ellb123 said:

And I guess a general question to the PH experts;

I’ve read Millionaire Teacher which echo’s a lot of the thought in here about investing in an index fund rather than an actively managed fund or trying to do it yourself by picking and choosing. I’m looking to start the same kind of journey as Ari here, although my circumstances seem slightly different, I’m 24, currently saving for a house (almost there) and earn around £20k PA. I was planning to start off with a £100 deposit and drip feeding in £50 per month, until I can afford a little more to put in and grow some confidence with the investment, treating this as a long-term thing and possibly an early retirement fund. I’m telling myself that it’s better to be in and started with a smaller amount than waiting say 5 years and investing more then, I’d be interested to hear your thoughts.

Far from an expert. However, with your immediate goal [house] and all the expenses that arise from a house purchase (legal fees, mortgage arrangement fees, moving fees, various insurances, etc), in tandem with your relatively small investment amounts, I'd advise against setting aside money for investments and focus on (a) house purchase and moving, and (b) setting up a 6 months fund (unexpected bills, etc) in an easy access / no notice account.

Even with drip-feeding, there is a transaction cost and at certain levels the transaction costs eat into your returns. When you are in position to invest, I would recommend building up a larger initial deposit and maybe drip-feeding once every quarter or 6 months..

I would not recommend investing (the type discussed here - not short-term trading or value plays) unless you are looking at a 10 year minimum horizon. That said, I agree with your thoughts that it is better to start with a smaller amount, purely based upon the psychological / behavioural aspect. Unfortunately, early experience tends to frame one's perception of investing i.e. good returns breeds over-confidence, bad returns breeds mistrust of investments, without a deeper understanding of what you are doing, why, and what are one's goals.

All the best with your house purchase! That should be your main focus until you are settled, and your finances are in order. When I was your age, my immediate goals were making sure that my drink (in hand) remained topped up, the tunes were banging, and failing miserably to pull club hotties in short skirts! You are a lot more switched on than I was!

[Ari]

Ellb123 said:

First of all, I'd just like to thank Ari and everyone else for sharing their experience and knowledge throughout this thread, it’s not often a thread doesn’t descend into petty arguments these days but I’m glad this has stayed on topic and has provided some great information for people like me.

A couple of questions if you don’t mind Ari;
Would you have still invested the same way if you knew now what you did at the beginning (obviously not including what has happened to the increase/decrease in value), would you of put that £5k in the world tracker instead?

How long do you plan to stick this out for? I’m guessing this is a retirement fund or something similar?

And I guess a general question to the PH experts;
I’ve read Millionaire Teacher which echo’s a lot of the thought in here about investing in an index fund rather than an actively managed fund or trying to do it yourself by picking and choosing. I’m looking to start the same kind of journey as Ari here, although my circumstances seem slightly different, I’m 24, currently saving for a house (almost there) and earn around £20k PA. I was planning to start off with a £100 deposit and drip feeding in £50 per month, until I can afford a little more to put in and grow some confidence with the investment, treating this as a long-term thing and possibly an early retirement fund. I’m telling myself that it’s better to be in and started with a smaller amount than waiting say 5 years and investing more then, I’d be interested to hear your thoughts.

Hi Ellb. I'm glad it's helped someone, that was very much the intention, to give a real world journey into this, good or bad.

To give some background, my view was always that there is no point saving (beyond a small emergency fund) or investing while still owing money (in my case a house mortgage). I appreciate other people may have different views, but this was mine. My view was very much, would I remortgage for (say) £10K in order to have £10K of savings? Of course not - so why would I have £10K in the bank when it could come off the mortgage (same situation). Same with investments, would I borrow £10K to invest it? No, so why start investing while I still owe.

So, my priority was to pour everything into the mortgage, partly because (to me) it made the most sense and partly because it offered the most security. The less I owe, the better position I'm in if earnings drop or cease. Once the mortgage was paid off, then I saved. Once I had a reasonable buffer (a year plus of survival) I figured I needed to do something more creative, and this is it.

In your situation, would I invest while saving for a house? Probably not, because it's too short term. If you've put £10K in over 2 years and at the point you want to use it as a house deposit it's turned into £8K you're going to be pretty upset. Whereas I'm able to take a much longer term view - if £10K has become £8K then I'll just leave it there till it comes back, even if it's years.

And to answer this: Would you have still invested the same way if you knew now what you did at the beginning (obviously not including what has happened to the increase/decrease in value), would you of put that £5k in the world tracker instead?

No, if I was able to know the answers before I invested, I'd have put it into winning lottery tickets. My point being, it's not really worth thinking about what you would have done if you knew what was going to happen because you never ever do. So all you can do is use your best judgement, be prepared to accept the 'worst case', hope for the best case and sally forth.

Good luck!

[Badda]

Ari said:

Sorry, just seen this.

FTSE100 tracker, £11,160 paid in, current value £11,607 so £447 up
All World tracker, £1,157 in, current value £1,229 so £72 up

Plus some dividends minus some fees, the exact figure is £516.64 up. 6.05% in about a year and a half.

Good news!

I bought into Vanguard FTSE Developed World ex-UK Equity Index at about the same time as I was concerned about Brexit affecting UK equity markets. Up 19.8% in that time with a 1.74% yield. Worth considering.

[gazza5]

Ellb123 said:

First of all, I'd just like to thank Ari and everyone else for sharing their experience and knowledge throughout this thread, it’s not often a thread doesn’t descend into petty arguments these days but I’m glad this has stayed on topic and has provided some great information for people like me.


And I guess a general question to the PH experts;
I’ve read Millionaire Teacher which echo’s a lot of the thought in here about investing in an index fund rather than an actively managed fund or trying to do it yourself by picking and choosing. I’m looking to start the same kind of journey as Ari here, although my circumstances seem slightly different, I’m 24, currently saving for a house (almost there) and earn around £20k PA. I was planning to start off with a £100 deposit and drip feeding in £50 per month, until I can afford a little more to put in and grow some confidence with the investment, treating this as a long-term thing and possibly an early retirement fund. I’m telling myself that it’s better to be in and started with a smaller amount than waiting say 5 years and investing more then, I’d be interested to hear your thoughts.

No harm in doing both, while I appreciate you are buying your first property etc, no harm in doing a bit of dabbling in a ISA fund as well if you can afford it, you canalways stop the monthly thing for a few months then revisit it.

There will be no transaction costs if investing in a index fund monthly, unlike investing in shares, you will have a management charge for the year can be anything from 0.10% up to 1%, so pick wisely. Also some fund places like Hargreaves Lansdown have a 0.45% fee that is yearly for having a isa with them. (I have my stuff with Hargreaves Lansdown due to my small portfolio of investments)

I have a mixture currently - I am no way a expert or a high powered earner but this is me currently:

£150 a month into Isa with Hargreaves Lansdown - this buys 6 different funds at £25 a pop (the lowest you can do is £25 per month per fund).
£30 into a pension (to get some tax break - I am not a higher rate taxpayer)
£30 into the lifetime Isa (again to get the free government money).

Basically I am putting away 15% of my net pay a month.

There is no issue with starting with small sums, I put £25 a month into each of my daughters junior ISA, I know when they turn 18 I would of paid in £6k ish, so we aren't talking huge amounts, but I would hope it would have at least doubled (hoping it triples), to give them a head start when 18.

Obviously we have had quite a good run in the stock market and it won't last forever, there will be another recession at some point of course, so I would not dwell on what has happened in the past too much.

If I was to invest differently (or starting out again) I would have not bothered with shares, i also dabbled with AIM a bit - don't go there, just done funds, and wish I had diversified more, as in the last year I have only really been invested in the USA, and have a World Fund, before this I was in europe, japan, but mostly in FTSE funds.

[Ari]

Little update on this for anyone still interested.

FTSE100 Index Unit Trust Accumulation has £11,910 paid in and is worth £12,443
FTSE All World has £1,639 paid in and is worth £1,747

A return of 7%.

Very pleasing (and planning to add a bit more over the usual regular payments shortly).

[Ari]

Another little update.

FTSE100 Tracker, paid in £13,029, current value £14,094
FTSE All World paid in £3,575, current value £3,856

So £1,345 up, rate of return is 13.54%

All rather pleasing really.

[Mopey]

Ari said:

Another little update.

FTSE100 Tracker, paid in £13,029, current value £14,094
FTSE All World paid in £3,575, current value £3,856

So £1,345 up, rate of return is 13.54%

All rather pleasing really.

Over what period is that Ari and forgive my ignorance but how do I get started?!

[daddy cool]

Ari said:

Another little update.

FTSE100 Tracker, paid in £13,029, current value £14,094
FTSE All World paid in £3,575, current value £3,856

So £1,345 up, rate of return is 13.54%

All rather pleasing really.

Nice one. I like hearing your updates, and your ups and down tend to match what happens on mine. Its almost 2 years since I started a S&S ISA with Fidelity, and have maxed out my allowance both years. Unlike you (and because im an absolute noob at this) I ended up with 12 funds, all spread across different geographies and whatnot. After an initial rise (where I felt like I was the next Warren Buffet) ive spent most of the last year seeing almost all of them decline... but I kept my nerve, kept drip feeding, and consequently buying cheap stock, and pretty much since the general election result they have all gone up like a rocket!
As of today, my stats are £40k invested, current value £44,448 - a return of 11.12%, which isn't bad I guess.
My single best is a Legal & General Pharmaceutical trust - £4.3K invested, current value £5.3K - a return of 20.1%

Im not expecting to retire early or anything, but it seems to be doing better than just keeping it in a savings account, and its fun to keep an eye on every couple of days.

[BobToc]

Ari said:

Another little update.

FTSE100 Tracker, paid in £13,029, current value £14,094
FTSE All World paid in £3,575, current value £3,856

So £1,345 up, rate of return is 13.54%

All rather pleasing really.

Does that include dividends as well?

[bitchstewie]

Mopey said:

Ari said:

Another little update.

FTSE100 Tracker, paid in £13,029, current value £14,094
FTSE All World paid in £3,575, current value £3,856

So £1,345 up, rate of return is 13.54%

All rather pleasing really.

Over what period is that Ari and forgive my ignorance but how do I get started?!

To give some idea if you'd simply invested in a global stock tracker you'd have made around 25% over the last 12 months though don't look at 12 months in isolation as that isn't typical.

I would start by looking at a site such as Monevator and Vanguard Investor and doing some reading of some of the threads on here as I know when I started investing which was only a couple of years ago it was a bunch of meaningless words and concepts.

It soon starts to make some kind of sense.

Keep in mind, and I apologise if I'm patronising you, that investing is not saving so if you invest £1000 there is no promise that you will still have £1000 when you come to need it.

It might have £2000 or you might have £400 as investments can and do go down as well as up (look at what happened in 2008) but the longer it is before you need it the greater the likelihood that your investments will have grown.

[Ari]

Mopey said:

Ari said:

Another little update.

FTSE100 Tracker, paid in £13,029, current value £14,094
FTSE All World paid in £3,575, current value £3,856

So £1,345 up, rate of return is 13.54%

All rather pleasing really.

Over what period is that Ari and forgive my ignorance but how do I get started?!

About 2 years. If you read this thread from the beginning it should give you some pointers.