Stocks and Shares

[threebikesmcginty]

Put all on your money into scone stocks - buy buy buy!

 

[cisamcgu]

Put all on your money into scone stocks - buy buy buy!

 

[cisamcgu]

For a 'good read around' I recommend this http://www.amazon.co...t/dp/0954809327

It's not a beginner's read, but his central premise is well set out:-
- not even the best fund managers can beat their benchmark consistently;
- they charge you in numerous hidden ways (bid and offer spread, management fees, trailing commissions etc) so that you cannot easily see how much you are being charged;
- those charges will erode your returns very significantly;
- you are being charged for something which is usually worthless, because in the long term they don't out-perform;
- you can easily become more expert than most financial advisers and their interests are not the same as yours.

John Kay's conclusion is that almost everyone would get the best returns by a) choosing a range of sectors which give a good spread of risk and b) within that sector, picking the ETF or Tracker which has the lowest TER [total expense ratio, a figure which they have to declare.]

HSBC have a good range of ETFs and Trackers. So do Blackrock and several other providers.

If you are going to invest, an ISA is a sensible vehicle provided you don't have to pay any extra for the tax wrapper. One of Gordon Brown's less publicised actions was to remove the tax benefit from dividends accrued in an ISA, so that for a standard rate taxpayer they have no advantage unless you manage to create an investment gain above the CGT threshold. There are several ISA providers who make no extra charge. [Hargreaves Lansdown's Vantage ISA is only free if you invest in funds i.e. not free at all, because of the arguments above and because commission is fed back to them by the fund managers.]

Even in my very limited reading in the last few days, I have found this stated again and again, that over the longer term, trackers will nearly always out perform managed funds because of the extra cost of the managed ones. I have commited to the HSBC 250 Tracker (had pretty much the lowest TER I could see, about 20% of the Virgin money one) which I purchased yesterday, and have already made almost £10 (I know that it is a long term thing, but it is still fun to watch the prices change). I have put 1/5 of my ISA allowance into this, so still have some more cash to play with, invest carefully

Is it sensible to stick with HSBC trackers if I fancy a more Global outlook ? (I am just pondering, I know this is a cycling forum and not a financial chat room and will not take any responses as Gospel )

 

[ASC1951]

I have commited to the HSBC 250 Tracker (had pretty much the lowest TER I could see, about 20% of the Virgin money one)

A good choice, says I. Well, I would have to, since I reached the same conclusion a couple of months ago. The TER is 0.35% for the ETF, which is what I bought.. You shouldn't be paying more than 0.75% for a tracker/ETF and people who pay 2%+ for a closet tracker are being taken for a ride. Most large managed funds are in fact trackers.

Is it sensible to stick with HSBC trackers if I fancy a more Global outlook ? (I am just pondering, I know this is a cycling forum and not a financial chat room and will not take any responses as Gospel )

By 'trackers' I assume you include ETFs. My reasonably extensive researches narrowed the providers to iShares, HSBC and Vanguard - I specifically avoided Deutsche Bank and Lyxor, who are two of the biggest in the market, because many of their funds are "synthetic ETFs". With a physical ETF the fund buys all of the shares in the index it tracks, but synthetic ETFs use whatever ingredients they fancy and put up completely unrelated shares as security i.e. you aren't buying what you think you are buying.

FWIW, I went for a second HSBC ETF, their S&P 500 tracker, which is the US equivalent of the UK 250 index. It has a 0.09% TER. I also have a couple of emerging markets ETFs, one from iShares and the other the Vanguard Global Small Cap Index (0.4% TER).

I think any medium to long term investor should have some exposure to eastern economies, particularly China and India and a tracker/ETF is the only sensible way to do it. Of course the FTSE 100 and the US equivalent have many companies which get most of their profits from international trade, but if you want to avoid the currency risk and the medium term effect of the 'debt crisis' you could look at HSBC's MSCI World ETF (TER 0.35%), or at some of their regional or even country-specific trackers.

Only you can decide what is a sensible level of risk or diversification for you, so this isn't even advice, let alone Gospel. But you could hardly get a more broad based long term equity investment than a World Index, for instance, and it is ludicrous that people are stuffing money into banks' heavily advertised own brand UK funds - and paying 2 - 5% compounded annually for the privilege - when you could buy pretty much the same assets for as little as 0.15%.

 

[cisamcgu]

Many thanks for your sage advice, I am still unsure of exactly what an EFT is as opposed to a tracker, but I will delve a bit deeper into the, rather confusing, world of shares

 

[GaryA]

http://www.gamblersanonymous.org.uk/what-is-ga.html

 

[byegad]

Many thanks for your sage advice, I am still unsure of exactly what an EFT is as opposed to a tracker, but I will delve a bit deeper into the, rather confusing, world of shares

OR You could give me all of your money now and when you want it back I'll return double.

Honest!

 

[swee'pea99]

I'll match his double and raise you 50%.

 

[Archie_tect]

SP99 has Greco-Icelandic parentage.

 

[Archie_tect]

cisamcgu,
For £79.98 of your GBP Sterling I can make you an Indonesian millionaire. PM your bank details, together with your PIN number to see how fast your investment can fly.

 

[cisamcgu]

 

[ASC1951]

http://www.gamblersa...what-is-ga.html

I'm glad to say I have never gambled in my life, not even to the extent of a single Lottery ticket.