I have no clue how stock and shares inside ISA work. I intend investing £5000 into this,please explain how to go about it. I have Natwest cashISA only
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212SoftwareBear postedthe simplest will be a share tracker ... you choose your level of comfort to risk and they'll take your money and put it into a big pot called 'low', 'medium' or 'high' for instance ... recording your proportion of the pot.
They use the pot of money to invest in things that meet the risk level of the pot and any profits or losses to into the pot.
They'll take their fees from the pot.
The pots usually 'track' some 'index' that indicates the relative worth of that group that the pot represents. EG you might have a safe as houses pot, FTSE100 pot, a FTSE500 pot, a dodgy war zone investment pot, Tracking means that the people tasked with executing the pot should make investments that will generally keep the pot moving at a rate similar to the index they are tracking. So if they had every share in the sector and executed perfectly they generally would track the index.
Others may make their money elsewhere but promise to track the index regardless because they made more money elsewhere (but they soak up the losses not you).
Then when you close your ISA they'll calculate your proportion of the various pots you have on that date and give it to you.
You may invest in lots of pots of different risk levels all within the same ISA and they'll keep you up to date on it all (via a website).
More complex ones involve you doing your own research and buying/selling your own shares, but obviously then you're in charge of your own money in your own pot.
Posted on 22 November 2009 |
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2yashdra posted
Thanks,SoftwareBear,can we go specific with the £5000 which I place with ISA share at Natwest, what would the management fee be to start with. Would it be one off on the total capital or annual on the total value?What returns can I anticipate to go up or down?
Posted on 22 November 2009 | Love 0 loves
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804MikeGG1 posted
Yashdra
If you are new to Stocks and Shares investment, I would recommend that you go for a low cost All-Share Tracker with someone like Legal & General or Fidelity, and not NatWest. Unless you need the income, go for Accumulation Units, where dividends are re-invested automatically.
The rule about only having one provider is one provider for a Cash ISA and one for a S&S ISA. They can both be the same or different. Next year's contributions can be with the same or another pair.
The limits on contributions this year depend on whether you will be 50 by 5 April 2010 or not. If you will be, you can contribute up to £10,200 in total of which a maximum of £5,100 can be in a Cash ISA. If you are lucky enough to be younger, the levels for this year are £7,200 and £3,600. Next year it will be £10,200 and £5,100 for everyone.
Mike
Posted on 22 November 2009 | Love 1 love
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2yashdra posted
So,Mike I could leave CashISA with Natwest, and invest £5100 with Legal & General or Fidelity,for stocks and shares. I am lucky enough to be 50+ this November, so might as well use up allowance of £10,200 pa.
I could move Cash ISA to Cheltanham & Gloucester which has Cash ISA Two year Fix rate of 3.75%. Then add top up in April 2010 according to performance?
Posted on 22 November 2009 | Love 0 loves
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2yashdra posted
Thanks Mike for your help, I shall start with low cost All-Share Tracker with Legal & Gen or Fidelity.I like the dividends to be re-invested automatically.
I happened to click for free brochure on Motley Fool site and have information from Fidelity,but had no chance to go through. I will dig them out.
Posted on 22 November 2009 | Love 0 loves
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