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Investing 101 for beginners. Advice please


One percent
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One percent

I’ve a house mortgage free and around 250k in cash, sat in the ns&i for protection purposes (I don’t think government is going bankrupt soon and if it does, the cash will be least of my worries). 
 

im not looking for growth at my age but want to protect from the worst of inflation and ideally get an income. @Frank Hovis suggested trackers but suggested i ask further for the best provider. 
 

any advice greatly appreciated. 

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23rdian
Posted (edited)

I'm relatively new to the game too but these are my feelings at the moment...

I am currently investing in both individual shares and low cost trackers. E.g. Vanguard . The trackers are safer (you are less exposed to a particular company going bankrupt which has happened to me before) but the rewards can also be a bit more muted.

I would always look for some sort of dividend or yield from either. For me its currently 3pc or greater that's important. Also at the moment inflation "proof" stocks may be a wise thing.

This is for the bulk of my funds. Although I do have some side bets on risky stuff such as penny shares and crypto but this to me is just gambling so expect losses if you do this too.

I am looking to cover all my day to day expenses from my investments. You shouldn't have a problem doing this too with the right buys if you wanted.

Edited by 23rdian
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23rdian
Posted (edited)

Also you should buy in an ISA unless you enjoy record keeping. I am not sure if you have a broker already but you can buy the Vanguard funds cheaper on platforms like FreeTrade or even Interactive Investor. But if you don't intend to buy anything other than their stuff then their website is an easy way to get into things for 0.15% per annum. But if you intend to have more than 50k in there you might be better off with at least one flat fee broker.

If you want a recommendation for either of these above which will give you a startup freebie - Pm me.

There are plenty of YouTube videos which are quite helpful if you don't want to sit down and read too much. It's hard to pick everything up but you want to avoid companies with too much debt etc.

I started a thread recently which has a link to another small forum I am finding useful.

 

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Andersen

I can't help but it's now bookmarked in case I can make use of any suggestions ... 

Fair point about ns&i being Gov't backed but there's no harm in moving some of the savings to other banks to spread the risk. Beware some banks are linked (Lloyds TBS used to be one), the £85k protection was for the total savings in the "group" *not* £85k in each bank. https://www.fca.org.uk/consumers/deposit-savings-protection 

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nirvana
16 hours ago, One percent said:

250k in cash

crypto, you'll double it in a month! :P

joking apart you can afford to play with 10-20k with that amount of money.......something to do rather than getting upset with convid and the sheeple all the time

We are all George xD

 

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SpectrumFX

If you don't need the money then I'd suggest giving a chunk of it to your kids. Think of it as an investment in their future as it'll help them pay off mortgages etc.

 

 

 

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wherebee
2 hours ago, SpectrumFX said:

If you don't need the money then I'd suggest giving a chunk of it to your kids. Think of it as an investment in their future as it'll help them pay off mortgages etc.

 

 

 

But be aware of tax implications.

I have seen families before deal with this by having the parents make a loan, with a low interest rate.  The will of the parents then splits the inheritance taking into account the loan balance.  The funds are not a gift, so do not trigger gift tax.

Note, some countries allow annual gifts up to X amount, which the loans can be decreased by.  DYOR, etc etc.

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wherebee

You may have missed posts before where we also discussed it's not just the return, but the certainty of return of income and capital.  As the world financial and economic markets become more fucked in the head, to use a professional term, expect more events like this:

https://www.reuters.com/business/unicredit-skip-coupon-payment-cashes-notes-after-2020-loss-2021-05-21/

So when choosing your investments, also consider counterparty risk.  And that includes the platform you invest through - has it been through a market collapse before?  How did it handle it?  What does the board and exec say about business ethics and the like (for example, I would not use a broker that was full on climate change and equality, because that shows either they don't analyse risk data properly or they are happy to lie loudly to the market.

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DeepLurker

Hello,

Great idea for a thread - likewise I'm taking a more active interest in interest, partly because our house purchase project is on hold for "reasons" and we've got money earning 0.00000000001%.

It's more of a defensive reflex than a greed reflex - I'm concerned about the various spending plans by governments, I'm thinking that it will be financed by printing money and I'm already anecdotally seeing prices go up. So my aim is more "safeguard capital" rather than "find a startup that could become the next Amazon".

My investing so far:

  1. Pharmaceuticals: I thought that with Covid19 the companies that found a vaccine would make a neat profit. So I bought into Sanofi... and they screwed up their vaccine. Oops.
  2. Growth opportunities: which companies will do well in the post-pandemic world? I thought that China (and the far east generally) would bounce back first (and strongest) as they've escaped relatively untouched. So it was either a tracker in far-east companies, or... Louis Vutton, a French company that makes luxury trinkets loved by the Chinese. I went for option b and so far I'm nicely in the black.
  3. A generic tracker (CAC40, French equivalent of the Footsie). First time I touch a tracker so it's just one tracker and I want to follow it a bit to understand the ins and outs and charges and stuff. The idea here is that it's easy to monitor (if the whole stockmarket goes down it'll be all over the news so I'll know to sell).
  4. Next chunk of investing... up for grabs yet. I'm thinking of a company that will keep its value no matter what the currencies do or if the economy crashes. So something whose worth is based on basic physical assets: oil fields, land, iron ore mines. Maybe Rio Tinto? It would have the advantage of spreading some of our money elsewhere than in France so reducing risk if the French (or EU) markets go down?

Thoughts/input/criticism of my brain farts are very welcome. Fire away!

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MrXxxx
On 01/06/2021 at 22:22, DeepLurker said:

The idea here is that it's easy to monitor (if the whole stockmarket goes down it'll be all over the news so I'll know to sell).

Just as everyone else is heading for the exit having read the same news...?

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One percent
On 25/05/2021 at 23:43, Great Guy said:

Do you work? Do you have a pension?

 

No

very small one which I am waiting on it beginning to pay out 

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Frank Hovis
On 04/06/2021 at 08:00, One percent said:

No

very small one which I am waiting on it beginning to pay out 

Tbh in your position Onesie I would be very tempted to sit on my hands for a bit because everything is going a bit bonkers.

If the stock market crashes, though I'm not saying that it will, you should certainly buy in then IMO.

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One percent
39 minutes ago, Frank Hovis said:

Tbh in your position Onesie I would be very tempted to sit on my hands for a bit because everything is going a bit bonkers.

If the stock market crashes, though I'm not saying that it will, you should certainly buy in then IMO.

My thoughts Frank. Stuffed it all in National savings at the moment. Let’s see how it plays out post covid 

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sleepwello'nights

Timing is impossible. There are two types of stock picker; those who think they can time the market and those that have already found out they can't.

On the credit deflation thread @DurhamBorn "ladders in" to his investments. He decides what stock he wants to purchase and then splits the amount he wants to invest into tranches. If the stock falls in value his later purchases cost less and he buys fewer if the price increases before he has spent the funds allocated to it. 

Basically cost price averaging. 

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Frank Hovis
1 hour ago, sleepwello'nights said:

Timing is impossible. There are two types of stock picker; those who think they can time the market and those that have already found out they can't.

On the credit deflation thread @DurhamBorn "ladders in" to his investments. He decides what stock he wants to purchase and then splits the amount he wants to invest into tranches. If the stock falls in value his later purchases cost less and he buys fewer if the price increases before he has spent the funds allocated to it. 

Basically cost price averaging. 

I've always bought fairly evenly through time  - steady investments evey year for thirty plus years - but that's primarily because it was matching my income coming in and I've never liked being in cash deposits.

My in-year approach is to have the £20k ready for the ISA / SIPP in case of a market fall but if there isn't one then invest it in March anyway.

With a big lump sum to go in it probably does make more sense to wait for a correction; though I admit that that does presuppose that one will occur within a reasonable timeframe.

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Yadda yadda yadda
27 minutes ago, Frank Hovis said:

I've always bought fairly evenly through time  - steady investments evey year for thirty plus years - but that's primarily because it was matching my income coming in and I've never liked being in cash deposits.

My in-year approach is to have the £20k ready for the ISA / SIPP in case of a market fall but if there isn't one then invest it in March anyway.

With a big lump sum to go in it probably does make more sense to wait for a correction; though I admit that that does presuppose that one will occur within a reasonable timeframe.

Either wait or drip feed month on month. Then if there is a crash it is still an opportunity.

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Frank Hovis
5 minutes ago, Yadda yadda yadda said:

Either wait or drip feed month on month. Then if there is a crash it is still an opportunity.

Onesie's call.  That's a reasonable approach.

My aim in all of these and similar threads is trying to stop enthusiastic novice investors from losing their shirts as I have been pushing on the Bitcoin threads.

Smart investors can make money on anything with close monitoring, profit taking and stop loss.  Most newbies just think buy -> get rich.

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Yadda yadda yadda
7 minutes ago, Frank Hovis said:

Onesie's call.  That's a reasonable approach.

My aim in all of these and similar threads is trying to stop enthusiastic novice investors from losing their shirts as I have been pushing on the Bitcoin threads.

Smart investors can make money on anything with close monitoring, profit taking and stop loss.  Most newbies just think buy -> get rich.

Agreed. A plan is needed and stick to it. Questions to ask include the following. How much time am I prepared to put in? If not a lot that rules out stock picking. How much risk am I prepared to take and will I panic if I'm losing on paper? What are my aims? Are they to keep value, generate an income to live from or to gain value?

Really difficult to give someone advice.

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Frank Hovis
Just now, Yadda yadda yadda said:

Agreed. A plan is needed and stick to it. Questions to ask include the following. How much time am I prepared to put in? If not a lot that rules out stock picking. How much risk am I prepared to take and will I panic if I'm losing on paper? What are my aims? Are they to keep value, generate an income to live from or to gain value?

Really difficult to give someone advice.

Yup.

I think I'm the only one here who has been into Venture Capital Trusts and that is because they have suited my situation very nicely and have been ideal for me.

I wanted two things out of them:

  • Recover all of my tax paid each year without having to tie my money up in a pension
  • Provide a decent tax free income stream which is my primary source of income now that I've stopped working.

And they do those things brilliantly.

What they don't do is:

  • Reward buying and then selling (no tax advanatges for second buyer so price drops)
  • Provide both an increasing dividend and an increasing capital value as a normal share would do; instead you get your money back (and usually a lot more) through the dividends without having to sell and every successful sale / flotation of a invested company brings a big special dividend but reduces the asset pool and so the share value.

Overall most people find them to be too complicated or not suitable for what they want and back away.  And they're probably right to do so but for me: great investment.

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DTMark

I can't add much, only to sound a cautionary note.

I looked into setting up one of those shell companies.

But luckily I did the research and found that there was very little demand for shells.

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Frank Hovis
17 hours ago, DTMark said:

I can't add much, only to sound a cautionary note.

I looked into setting up one of those shell companies.

But luckily I did the research and found that there was very little demand for shells.

FirstResponsibleArchaeocete-size_restric

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