Well the headline says it all .....
I am in UK and will start investing in Stock and Share ISA from thsi coming financial year......
I have planned the following ---- as plan is for long term growth --- atleast 5 years ( Have £1600 / month )
$MSFT - £400
$AAPL - £400
$AMZN - £400
$BABA - £400
$PYPL - £100
$TSM - £100
$INTU - £100
$FB - £ 100
Is that a feasible list? Wanting a >10% growth /year .... preferrably 12.5%
Please criticise ....
As its individual shares, broker costs will eat in to your deposits quite considerably each month. Maybe some sort of index tracker or fund would be better suited to drip feeding your ISA in this way or buying your shares in a more concentrated way. Good luck.
Feasible list but unless you have free or low cost dealing the amounts are too small. Probably better to buy 2 shares per month.
Yes could consider buying a S&P 500 tracker, until you have more funds.
I believe Trading212 is an entirely free platform - no management nor dealing fees, even for an ISA.
Just had a quick look at the Trading 212 website. From the broker comparison chart it does appear to be free to trade and no fees. Which begs the question how do they make their money? Is it too good to be true?
If you're mainly buying tech look at ISHRS S&P 500 INF TECH SECT USD ETF (LON:IITU) as that covers most of those!
Good questions. I guess there must be add-ons somewhere that they charge for. Maybe they make money from the CFD service. I have played around with them, using tiny sums and buying some fractional US shares. Seems to work really well, though don’t expect all bells and whistles- that’s what my Stockopedia subscription is for!
Just been looking at Trading 212 website. Is the practice the same as real dealing?
It is based in Euros, can you change that to £, as that would drive me nuts.
Maybe the spread is wider than some platforms?
Are stop losses only available for current day's trading?
How safe is it, it's registered in Bulgaria?
I would go for a recognised broker and if there was a charge of (say) £5 per trade (e.g. iWEB=Halifax), minimise the impact by buying just one of the stocks per month. Or even 1 every 6 weeks.
This should even out over 10 years.
A few things ...
Firstly do use an ISA. The tax gains over a lifetime are insane. I can buy or sell anything without ever worrying about taxes. In 30 years you could be sheltering millions if things work out for you.
Look for a really low cost platform - Cavendish or iWeb are the cheapest. When you have more funds to play with move to a full service broker if only to get the extra protection of the larger providers. But dealing such small amounts you must keep costs down otherwise they'll hurt your returns,
Plan for 2 years - I'd buy 1 company a month at £1600. At the end of the 2 year period you'll have a 24 stock portfolio. That's reasonable diversification. If you don't like that then 2 companies a month at £800. Nothing smaller.
I don't think you can afford to buy US stocks. They're good companies but the extra costs will destroy your returns. You need to be dealing in £10K chucks before diversifying overseas and taking currency risk. But if you do go down this route I think the companies you've chosen are good choices right now, but I'm not sure you know why?
Don't buy companies just because you've heard of them. Do some research, try and identify some companies that you think will do well. Buying what you've heard of is not a good investment strategy - you need to know why in order to replicate in future. But by all means come back and explain why you think these companies are good investments.
Moderate your expectations. 10%+ is easily possible on a small portfolio but it doesn't mean anything, it could be luck or skill. There are people here who have lost 30% to 40% of their very large portfolios in less than a month. Consider that I've lost considerably more than the total of your first two years investments on at least 7 separate days in March (*). This is the nature of stockmarkets.
For you this is a learning exercise, the rewards of which will come in later years. You'll learn far more putting real money into the market than any theoretical exercise. Ditch the targets for 2 years, you're just making a rod for your own back.
If you have even a half-way decent disposition this will be the most liberating decision you've ever made in your life. But you have to find your own way, we all do it differently.
Come back and tell us how it's gone. Good luck!
timarr
I agree with timarr about ISAs, I won't buy any foreign shares outside an ISA, if they pay dividends, as you have to declare them on your tax return and it can be a bit of a mess working out out all the rates of exchange. Note if you have any cash ISAs you can move these over into your share ISA, I did this when one matured.
If you are planning to use HL platform then there is a 1% forex fee on all foreign currency shares, does not sound much but if you buy and sell that is 2% lost.
Trading 212 seem to be the cheapest but I have not used them yet but may well do next tax year.
There are people here who have lost 30% to 40% of their very large portfolios in less than a month. Consider that I've lost considerably more than the total of your first two years investments on at least 7 separate days in March (*). This is the nature of stockmarkets.
Not sure if this is schadenfreude, but I find this a very comforting statement in light of my own losses!
Thanks Timarr
Just discovered that Trading212 don't trade AIM shares, so that might be a problem for some investors.
Fractional shares is a good idea with some of the high prices on the US markets such as GOOG and AMZN.
They cover some AIM shares, Sylvania Platinum (LON:SLP) and ASOS (LON:ASC) for instance. But there are a lot of shares, etfs and investment trusts missing. I think it probably depends on what's been requested (most perhaps) on the forums.
Currency risk, as acknowledged, is a major factor to consider when buying foreign shares. Over the last 4 months we have seen the GBP swing from a high of 1.35 USD to 1.15 USD ( a 17% difference). This puts a Forex of 1% into perspective. With regard to the advice:
'You need to be dealing in £10K chucks before diversifying overseas and taking currency risk', I would respectfully disagree in general, unless the GBP is at a one year high against the USD, or within 5% of that high (assuming we are talking mainly about US shares).
An inexperienced investor who wishes to buy US shares might be well advised to wait for the GBP to rise above $1.28 and buy a smallish amount, say £1-2K and watch the GBP:USD rate before buying more as the value of the GBP rises. Admittedly the dealing commissions may add up to £12 for each transaction, but in percentage terms that's cheap insurance against a weakening of the dollar.
