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Stock and shares ISA as a way to start investing? Watch

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    When I start my graduate job, I am considering opening a stocks and shares ISA where I pay a monthly direct debit into (I am thinking £100 a month). This would be for a long term (probably over 10 years)

    The reason for this is that the money in tax-free, interest rates on cash isas are very low and stocks and shares can yield high gains due to compound interest

    Of course there is a natural risk and uncertainty with these things, but that is why I plan to have the account for 10+ years to 'ride out' any significant losses

    The problem is I do not know where to start. I realise there is no definite answer for this, but considering I am a new investor, willing to have the account for 10+ years, around £100 every month, and, of course with the goal of getting the highest yield possible

    I saw that Lloyds offer stocks and share ISAs for low, medium and high risks (which invest in a mixture of property, shares...etc).

    Could I go too far wrong opening up a Lloyds medium risk stocks and shares ISA with the aim of £100 a month for the long term? Would you recommend something else?

    I hope someone can advise me on this, I have no experience so all opinions welcome
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    (Original post by number23)
    When I start my graduate job, I am considering opening a stocks and shares ISA where I pay a monthly direct debit into (I am thinking £100 a month). This would be for a long term (probably over 10 years)

    The reason for this is that the money in tax-free, interest rates on cash isas are very low and stocks and shares can yield high gains due to compound interest

    Of course there is a natural risk and uncertainty with these things, but that is why I plan to have the account for 10+ years to 'ride out' any significant losses

    The problem is I do not know where to start. I realise there is no definite answer for this, but considering I am a new investor, willing to have the account for 10+ years, around £100 every month, and, of course with the goal of getting the highest yield possible

    I saw that Lloyds offer stocks and share ISAs for low, medium and high risks (which invest in a mixture of property, shares...etc).

    Could I go too far wrong opening up a Lloyds medium risk stocks and shares ISA with the aim of £100 a month for the long term? Would you recommend something else?

    I hope someone can advise me on this, I have no experience so all opinions welcome
    I dont know what the potential gain on a stocks and shares isa but you could just stick your wage in a club lloyds for 4% interest with no risk involved, but then i m not a risk taker money wise.
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    (Original post by claireestelle)
    I dont know what the potential gain on a stocks and shares isa but you could just stick your wage in a club lloyds for 4% interest with no risk involved, but then i m not a risk taker money wise.
    True. It's tricky because its potentially possible to triple your money over the long term. Its also possible to lose everything lol.
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    (Original post by number23)
    True. It's tricky because its potentially possible to triple your money over the long term. Its also possible to lose everything lol.
    yeah i couldnt handle the risk of losing it all, i'll stick to my £250 interest a year and the help to buy isa bonus i think.
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    (Original post by number23)
    When I start my graduate job, I am considering opening a stocks and shares ISA where I pay a monthly direct debit into (I am thinking £100 a month). This would be for a long term (probably over 10 years)

    The reason for this is that the money in tax-free, interest rates on cash isas are very low and stocks and shares can yield high gains due to compound interest

    Of course there is a natural risk and uncertainty with these things, but that is why I plan to have the account for 10+ years to 'ride out' any significant losses

    The problem is I do not know where to start. I realise there is no definite answer for this, but considering I am a new investor, willing to have the account for 10+ years, around £100 every month, and, of course with the goal of getting the highest yield possible

    I saw that Lloyds offer stocks and share ISAs for low, medium and high risks (which invest in a mixture of property, shares...etc).

    Could I go too far wrong opening up a Lloyds medium risk stocks and shares ISA with the aim of £100 a month for the long term? Would you recommend something else?

    I hope someone can advise me on this, I have no experience so all opinions welcome
    You need to do a lot of research of your own if you're looking to invest because everyone is different. For a start, what are you investing for (i.e. what is your objective - something more tangible than just higher yield)? What level of risk tolerance do you have (to what degree can you handle wild swings in the value of your investments)? Are you going to take an active role in researching new investments or do you want a hands-off approach (active vs passive)? These are all factors you need to consider so that you're not taking unnecessary risk.

    Regarding the Lloyds Investment ISA, I would be mindful that you are paying 0.45% of the value of your investments every year in costs, in addition to a 0.24% service fee, regardless of how well the investment ISA performs. Because this is an actively managed product, you're essentially trusting Scottish Widows to generate a greater return than the market and are paying them a hefty amount in relation to what you put in to do so. In general, the majority of actively managed funds under-perform the market so you must be confident in the ability of the manager to "generate alpha" and deliver a greater return than investing into the market in general. If you haven't considered the factors in the first paragraph, I would suggest looking at whether there are cheaper alternatives to the product from Lloyds. A lot of markets can be invested into through ETFs which have substantially lower costs than actively managed funds as their purpose isn't to outperform but to follow the market they track.

    (I'm not saying it's necessarily a bad product btw nor that ETFs are the way to go. Just that you need to be mindful of whether it is the right thing for you. There are a hell of a lot of options out there so you need to consider whether going with something is a good idea otherwise you're just throwing away money)

    Tl;dr: Look into why you are investing first. Then look at how you can achieve your objective in a way that minimises any unnecessary risk as well as costs.
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    (Original post by number23)
    When I start my graduate job, I am considering opening a stocks and shares ISA where I pay a monthly direct debit into (I am thinking £100 a month). This would be for a long term (probably over 10 years)

    The reason for this is that the money in tax-free, interest rates on cash isas are very low and stocks and shares can yield high gains due to compound interest

    Of course there is a natural risk and uncertainty with these things, but that is why I plan to have the account for 10+ years to 'ride out' any significant losses

    The problem is I do not know where to start. I realise there is no definite answer for this, but considering I am a new investor, willing to have the account for 10+ years, around £100 every month, and, of course with the goal of getting the highest yield possible

    I saw that Lloyds offer stocks and share ISAs for low, medium and high risks (which invest in a mixture of property, shares...etc).

    Could I go too far wrong opening up a Lloyds medium risk stocks and shares ISA with the aim of £100 a month for the long term? Would you recommend something else?

    I hope someone can advise me on this, I have no experience so all opinions welcome
    save it up in a cash isa than just do some side trade in swiss watches buy them cheaply and flip them profitably
    i have seen a £30,000 retail 2 year old patek philippe for under £6,000 if i had it available i would have done it like that and sold it for about £15,000 to another dealer
    just watch the video that explains a lot more than i could in words alone
    https://www.udemy.com/how-to-flip-lu...un-and-profit/
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    (Original post by claireestelle)
    I dont know what the potential gain on a stocks and shares isa but you could just stick your wage in a club lloyds for 4% interest with no risk involved, but then i m not a risk taker money wise.
    The markets ride up and down and whilst there's the potential to make a lot better than 4% in a stocks and shares ISA, there's also a risk that you won't. Over previous decades, mostly people would have gained, but there's no guarantee that will continue.

    One thing OP could look at doing (if they are interested in trying to have more control) is to sign up for one of the big non-bank operators who run platforms (people like Hargreaves and Landsown for example - theirs is the biggest) as they let you examine lots of possible funds and choose precisely how much to put in each every month and to move money between them. So they offer more flexibility and learning than the ones run by Lloyds for example.

    Stocks and Shares ISAs are best for long term saving, like the 10 year plan that OP has - for shorter term savings where you want to take money in and out, cash ISAs are better.
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    (Original post by Fullofsurprises)
    The markets ride up and down and whilst there's the potential to make a lot better than 4% in a stocks and shares ISA, there's also a risk that you won't. Over previous decades, mostly people would have gained, but there's no guarantee that will continue.

    One thing OP could look at doing (if they are interested in trying to have more control) is to sign up for one of the big non-bank operators who run platforms (people like Hargreaves and Landsown for example - theirs is the biggest) as they let you examine lots of possible funds and choose precisely how much to put in each every month and to move money between them. So they offer more flexibility and learning than the ones run by Lloyds for example.

    Stocks and Shares ISAs are best for long term saving, like the 10 year plan that OP has - for shorter term savings where you want to take money in and out, cash ISAs are better.
    I guess the risk is never worth it for me, imagine losing a house deposit over a bad choice, that just terrifies me otherwise i would get into the stock market, besides it's likely my savings will be spent in the next 3 years assuming we get our credit ratings sorted enough to get a mortgage in 2019.
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    (Original post by claireestelle)
    I guess the risk is never worth it for me, imagine losing a house deposit over a bad choice, that just terrifies me otherwise i would get into the stock market, besides it's likely my savings will be spent in the next 3 years assuming we get our credit ratings sorted enough to get a mortgage in 2019.
    To be fair, I think if you lost a large part of the money in a stocks and shares ISA, it would be because the whole economy had severely crashed and that's highly likely to mean the banks get hammered too, not to mention the whole governmental system, so I think in that scenario it isn't likely that your savings in a bank would be much safer.

    The realistic difference is a percentage up or down. Most of these standard cash ISA interest rate offers sound good to start with, but they bring the rates down after a year. You can keep switching, but it's a pain. Generally, even the simplest 'tracker' kind of stocks and shares ISA will probably do better than those in performance, but only if you keep your money in it for some years.
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    (Original post by Fullofsurprises)
    To be fair, I think if you lost a large part of the money in a stocks and shares ISA, it would be because the whole economy had severely crashed and that's highly likely to mean the banks get hammered too, not to mention the whole governmental system, so I think in that scenario it isn't likely that your savings in a bank would be much safer.

    The realistic difference is a percentage up or down. Most of these standard cash ISA interest rate offers sound good to start with, but they bring the rates down after a year. You can keep switching, but it's a pain. Generally, even the simplest 'tracker' kind of stocks and shares ISA will probably do better than those in performance, but only if you keep your money in it for some years.
    Generally the majority of my money is in non isa accounts as its in he accounts I get through my current account except my help to buy isa so I get the 25% at the end.
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    (Original post by claireestelle)
    Generally the majority of my money is in non isa accounts as its in he accounts I get through my current account except my help to buy isa so I get the 25% at the end.
    Yeah, the help to buy ones are a total no-brainer, if you are in that situation, they are the best thing currently on the market.

    I see that Halifax have now dropped the 4% rate they were offering on theirs to 2% though. Others have dropped as well. Too popular evidently.
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    (Original post by Fullofsurprises)
    Yeah, the help to buy ones are a total no-brainer, if you are in that situation, they are the best thing currently on the market.

    I see that Halifax have now dropped the 4% rate they were offering on theirs to 2% though. Others have dropped as well. Too popular evidently.
    Yeah so with help to buy I can put a maximum of £200. I have realised I can save around £500 a month, so that's why I was considering stocks and shares

    I think Hargreaves and Landsown would probably be the best option due to flexibility. Although with a fulltime job and little experience in the stockmarket, I think it may be better to get an 'experienced fund manager' to do it for me..

    Although, seeing as I would like to be buying individual stocks and shares further down the line, maybe it is best to start as I mean to go on...

    Also, do you know if trades Hargreaves and Landsown would count towards your annual ISA limit?
 
 
 
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