threebikesmcginty
Corn Fed Hick...
- Location
- ...on the slake
Put all on your money into scone stocks - buy buy buy!
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.]
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.I have commited to the HSBC 250 Tracker (had pretty much the lowest TER I could see, about 20% of the Virgin money one)
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.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)
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![]()
I'm glad to say I have never gambled in my life, not even to the extent of a single Lottery ticket.