First time investment plan help

Interesting opinion, I don’t completely agree. In terms of total return you are mostly right though as it will just give the average return of the market (and due to weighting is basically almost just S&P500), but has the opportunity to grow if an unexpected market starts to outperform, with mostly lower volatility.

That said ETFs are mostly a way to manage risk so 🤷 I’m doing pretty well without relying on ETFs for managing my own risk.

The only other reason I’d pick up an ETF than risk management would be if it gives me:

  • access to companies I don’t otherwise have access to (e.g. I have an investment in ESPO to get some of the Chinese gaming and tech big boys) or;
  • an investment into without really caring what I’m investing into exactly (clean energy ETF, it’s the future but I don’t really want to research about it so I picked up the ETF).

You’re not wrong there :roll_eyes::joy:

Thanks. Thought I am feeling very itchy. But I think I will follow your suggestion and use the Practice platform with my proposed portoflio for a month at least, or whenever the lockdown is announced.

Thanks for the suggestions. Yeah, I am planning to make FAANG+ pie. I will just add all the top tech giants.

Thanks for the suggestions.

For the FAANG stocks, if I start putting in £100 per month, it will average out the stock price. No need to wait for the right moment in this case. Right ?

I have been in the stock market for over two decades and if I learnt anything that is “I am terrible at timing the market” so what you said is essentially correct.

I have a long list of things to buy and I buy “some” of them when ever I have money. But some of them get very expensive (i.e amazon at the moment) from time to time, and I stop buying those for a while, until others catch up or may be the expensive share goes into correction. In the meantime I can buy something else from my “bucket list”

I’ve listed them in this topic My current buy list (future pies)

it is not up to date but should give you an idea

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Not a bad should/split, but you could consider an ETF that does what you suggest already - something like VWRL.

Why are you interested in holding FANG stocks - does that not over expose yourself to US stocks? Then again if it’s £100 a month, but to throw a spanner into the works, look at XDWT as an alternative. :joy:

To be fair, FAANG+M (MAFANG?) Are all globally exposed companies, so it’s not a huge point of worry these days.

Maybe if the EU really does push through their new rule stopping the US snooping through European data stored on US data centres/servers and ones like FB pull out of EU like they promise…

You raise a good point Matt. I even think I have heard that 75% of the FTSE100 companies revenue comes from abroad.

Why do you say its expensive ? With fractional investment, you can buy any fraction of stock with whatever money you want to invest, right ?

Yeah. @Matt_C mentioned the same thing regarding ETFs. So VWRL does exactly what I am doing, but will probably cost me less. I guess I might switch my £300/month just to VWRL.

Why FANG+ stocks ? Well it seems fun and excitely to see that with their current growth and with my £100/month, in 15 years I may have £1Million. Obviously that might not happen, but it’s worth a risk. No ?

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Some good points raised. I think it’s a solid plan, home bias aside. To clarify, it is cheaper to buy regional ETFs than, for example, VWRL. @Scrooge_McCodf’s guide on buying the world with an annual charge of 0.116% (versus 0.23% for Vanguard’s global all-cap fund) may be of interest.

Worth considering 212 ISA than invest accounts so that you don’t have to worry about capital gains as you build your portfolio.

For each ETF, you should look at the management costs (the smaller the better) and fund size (the bigger the better) on justetf.com. Apart from that, your pie looks good :slight_smile:

By the way, you could simplify and just go with MSCI world ETFs. You would get a good selection of companies directly from one product (the standard MSCI world index follows the performance of the 1500 best western companies for example).

It might be cheaper, but for a saving of 0.11% is it worth it?

If you could match the weightings like for like, then effectively over a 5 year period, you would only save 0.55%.

If you drill down - VWRP aims to track the performance of the FTSE All-World Index, by directly holding securities, and can hold cash. Is it worth monitoring the FTSE all world index?

Some would say it’s not worth the effort, and I hold the all-cap fund in my Sipp and Isa, but the savings can be significant over time. Over 40 years at £300 a month, as a rough example, you could be looking at about £15k in charges rather than £30k.

I did not mean expensive stock price, well yes i did mean expensive stock price but on comparative basis. price to earnings, price to book, price to free cash flow etc.

Please don’t take this condescending but I just realised I forgot to mention the most important thing. It is sincere advice, you can buy a few good books and should cost you about £100-150 but trust me it is worth it.

I copied following from another post of mine in another thread.

I don’t know how young/old you are but I think everyone who remotely considers trading should read Intelligent Investor by Ben Graham, and Irrational Exuberance Bob Shiller.

Rich dad poor dad by Kiyosaki will hammer the idea about educating yourself about finance while rudely pointing out the differences between classes.

If you want to read about dividends, “The Single Best Investment” by Lowel Miller is probably the best one despite being old.

Yes I am a dinosaur, I don’t own a kindle still buy hard cover books, and use youtube to watch LPL Vods :man_shrugging:

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Yep. I am planning to use 212 ISA, as my £500/month will be under £20K ISA limit.

Yep. My investment plan is for 15 years, so yeah I need to look at the management prices and see what’s the best option.

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Thanks. I am definitely keen to learn more about investing. Proper books for knowledgeable professionals is always a good start.