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building a portfolio only in stock & shares isa

by compound200 21 January 2010 |

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april 2010

using full allowance £10200(does allowance include costs?)

monthly/pound cost ave--25%

lump/sum ETFs--longterm--25%

lump/sum shares--medium/long--50%

cheapest way to do it?

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manzanilla posted
does allowance include costs? - That is the max you can put into your ISA account and all dealing costs have to be paid from there. Some brokers (like Selftrade) let you pay the annual ISA admin charge from outside the account though.
monthly/pound cost ave--25% do you mean you will invest 75% at the start and then 25% of £10200 monthly? ie just £200 a month? This isnt sensible. Either invest the whole lot at the start, or in say 6 chunks during the year.

lump/sum ETFs--longterm--25% & lump/sum shares--medium/long--50% if you want to buy individual shares, then you can't really diversify with just 25%. If these are your first equity investments, then I suggest you go for all ETFs this year. Then next year go for say 1/3 ETFs and 1/3 shares, planning to buy 6 individual shares.
manzanilla
Posted on 21 January 2010 | Love 0 loves Report
7

compound200 posted
say 4 payments 2.5k
the £200 you use as costs
gradualy every year add 4
Posted on 21 January 2010 | Love 0 loves Report
134

liesarenocomfort posted
I don't understand etfs (have only just about got my head round OEICs) but I noticed some discussion by some clever people on the Fool site about "counterparty risk" (whatever that is)
http://www.fool.co.uk/news/investing/investing-strategy/2009/09/08/how-safe-are-etfs.aspx?source=isesitlnk0000001&mrr=0.17
One of the supposed advantages of etfs, "all day tradeability" seems a bit of an irrelevance for long term investors (what difference does it make if you hold them for 5 years whether you can only sell the investment once a day or all day?!).
Perhaps it's just that they're a bit recent and "new-fangled" (humbug, humbug!)
Perhaps I need to do some more research.

Posted on 21 January 2010 | Love 0 loves Report
804

MikeGG1 posted
If you are investing £2,500 4 times a year then invest half of each instalment in a single Company Share and the other half in an ETF. Then use the next instalment to buy a different company share and either the same or a different ETF.
One of the 4 ETF puchases could be an overseas ETF. The second year one could be an Emerging Market ETF.
The companies should be in different business sectors. You can start repeating sectors after a couple of years and companies after another 2 years.
By then you would have a reasonably balanced portfolio and you could consider switching some of your ETFs to overseas ETFs and using all new money for share purchase.
Up to one third could be overseas, half of which could be Emerging Market.
As you build up your portfolio, you could start buying shares in Western Europe or North America, but that would be another 5 or 6 years away.
Mike
Posted on 21 January 2010 | Love 1 love Report