Pensions and ISA ideas

Snap

ToneControl said:

between March and May, I made 50% on my ISA in UK stocks. Never invested in shares before in my life. It's not that hard.

But you would though - if you bought at the bottom of a crash. If you have cash making money in a crash is a cinch. If you'd bought a selection of good companies when the FTSE was edgin towards 5000, you'd be laughing.
However, managing your money through the ups and downs, if you are already invested is a different matter. Your real challenge will come if we have another big dip and you are already invested. 

My point is, what you do with your money and how you do it depends on it's relative importance to you and the size of the pot, and your stage of life.
Dabbling with 20k of shares when you are 30 is a lot different to dabbling with the same amount when you are 50. 
If you are in your 50s and you are looking at hundreds of k in investments, which will be your nest egg, then that becomes an entirely different scenario.

Then you have another potential complication of overlaying tax management when that become relevant. 

Personal circumstances dictate what you do, and all I'd say, is based on my own experience over a long time, leaving it to a pro makes sense for every single reason that matters.

Do the research, find a good institution and relax. For anyone seriously considering what to do with their money for mid to long term have a look at findawealthmanager.com. They are a broker, and match your needs to a selection of firms for you to contact and grill. I found them very useful, open and helpful.

ThePrettyDamned

This one is where I have plumped. Low fees etc, and aimed at long term gains and accumulation/reinvestment, rather than short term. 

https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F00000OMUC

ToneControl

Snap said:

ToneControl said:

between March and May, I made 50% on my ISA in UK stocks. Never invested in shares before in my life. It's not that hard.

But you would though - if you bought at the bottom of a crash. If you have cash making money in a crash is a cinch. If you'd bought a selection of good companies when the FTSE was edgin towards 5000, you'd be laughing.
However, managing your money through the ups and downs, if you are already invested is a different matter. Your real challenge will come if we have another big dip and you are already invested. 

My point is, what you do with your money and how you do it depends on it's relative importance to you and the size of the pot, and your stage of life.
Dabbling with 20k of shares when you are 30 is a lot different to dabbling with the same amount when you are 50. 
If you are in your 50s and you are looking at hundreds of k in investments, which will be your nest egg, then that becomes an entirely different scenario.

Then you have another potential complication of overlaying tax management when that become relevant. 

Personal circumstances dictate what you do, and all I'd say, is based on my own experience over a long time, leaving it to a pro makes sense for every single reason that matters.

Do the research, find a good institution and relax. For anyone seriously considering what to do with their money for mid to long term have a look at findawealthmanager.com. They are a broker, and match your needs to a selection of firms for you to contact and grill. I found them very useful, open and helpful.

I am sitting on a much larger SIPP fund, and genuinely don't trust the fund managers. They are in a competition to make more gains when the sun is shining, not to safeguard your cash. I may decide to use some of them, but definitely would not just hand over my life savings and be able to relax

RandallFlagg

Tesla stocks have taken a couple of days decline in value since I posted, stocks across the board took a bit of a thump on Friday, especially the big US Tech giants. Not sure if this is traders selling to lock in profits or a more general correction. We'll see.

An interesting view point here from Social Capital CEO Chamath Palihapitiya, who will remain invested in Tesla due to the bigger picture bet, beyond EVs, of more widespread electrification and decarbonised energy distribution and management which he believes Tesla will pioneer.

Also, his view on the knowledge and power of retail investors now matching or bettering the institutional investment professionals is interesting.

ToneControl

RandallFlagg said:

Tesla stocks have taken a couple of days decline in value since I posted, stocks across the board took a bit of a thump on Friday, especially the big US Tech giants. Not sure if this is traders selling to lock in profits or a more general correction. We'll see.

An interesting view point here from Social Capital CEO Chamath Palihapitiya, who will remain invested in Tesla due to the bigger picture bet, beyond EVs, of more widespread electrification and decarbonised energy distribution and management which he believes Tesla will pioneer.

Also, his view on the knowledge and power of retail investors now matching or bettering the institutional investment professionals is interesting.

well, he is right tbh

btw also: the small caps and micro caps are too hard to trade for the big funds, you can only buy/sell so many shares a day, not like RDSB or BT. I can easily dip in and out of these shares, which (as discussed) tend to move more

RandallFlagg

A contrary view on retail investors piling in to Tesla stocks here:

https://www.ccn.com/tesla-stock-crash-dumb-money-buy-dip/

"According to Robintrack, Tesla was the most popular stock on the Robinhood brokerage app for the previous 24 hours.

More than 16,000 new investors purchased TSLA stock in a single day. That’s all the more impressive considering it already appeared in more than half a million portfolios.

Robinhood’s user base trends toward inexperienced, younger investors of the millennial cohort. And it teems with impulsive amateur traders.

Institutional money disagrees sharply with the retail crowd on where Tesla stock is going next.

The unsophisticated retail investors piling into this bubble have little to no conception of these byzantine operations in equities markets. They naively bank on past performance in the hope of future returns.

Let’s settle this once and for all: Elon Musk and Wall Street are right; the people investing in their pajamas are wrong."

I have a tiny, tiny amount of skin on the Tesla game and the fund managers will decide how and when my small stake moves but I am intrigued as to how this one plays out over the next 12 months.

RandallFlagg

Another intriguing tech stock is AMD (Advanced Micro Devices, Inc). That stock is up 16.5% yesterday alone

"Advanced Micro Devices Inc. AMD, +16.50% shares recorded their best day in 18 months Friday after larger rival Intel Corp. INTC, -16.24% surprised investors with news that its competing 7-nanometer chip would be delayed by at least six months because of manufacturing issues. On Friday, AMD shares closed up 16.5% at a record $69.40, while Intel shares finished down 16.2% at $50.59"

ToneControl

RandallFlagg said:

A contrary view on retail investors piling in to Tesla stocks here:

https://www.ccn.com/tesla-stock-crash-dumb-money-buy-dip/

"According to Robintrack, Tesla was the most popular stock on the Robinhood brokerage app for the previous 24 hours.

More than 16,000 new investors purchased TSLA stock in a single day. That’s all the more impressive considering it already appeared in more than half a million portfolios.

Robinhood’s user base trends toward inexperienced, younger investors of the millennial cohort. And it teems with impulsive amateur traders.

Institutional money disagrees sharply with the retail crowd on where Tesla stock is going next.

The unsophisticated retail investors piling into this bubble have little to no conception of these byzantine operations in equities markets. They naively bank on past performance in the hope of future returns.

Let’s settle this once and for all: Elon Musk and Wall Street are right; the people investing in their pajamas are wrong."

I have a tiny, tiny amount of skin on the Tesla game and the fund managers will decide how and when my small stake moves but I am intrigued as to how this one plays out over the next 12 months.

you should watch CNBC, they covered the Robin Hood guys buying tech stocks a lot a few weeks ago
A couple of weeks ago they were switching into more traditional stock, the leaderboard on 14th July was:

symbol	name	popularity
F	Ford Motor	936656
GE	GE	838957
AAL	American Airlines	657383
DIS	Disney	628209
DAL	Delta Air Lines	586189
AAPL	Apple	540654
MSFT	Microsoft	530122
CCL	Carnival	490612
GPRO	GoPro	487451
TSLA	Tesla	479481
ACB	Aurora Cannabis	449971
PLUG	Plug Power	391837
AMZN	Amazon	362181
NCLH	Norwegian Cruise Line	360228
BAC	Bank of America	341799
SNAP	Snap	336563
FIT	Fitbit	332848
BA	Boeing	330786
UAL	United Airlines	328791
NIO	NIO	277264
HEXO	Hexo	261271
UBER	Uber	257631

RandallFlagg

If anyone is interested here's a recent interview with Harry Nimmo, head of the Aberdeen Standard Investments UK Smaller Companies trust and open ended fund.

He shares his views on the FTSE 100 and the prospects of UK smaller company stocks in the face of COVID & Brexit, among other points.

https://citywire.co.uk/wealth-manager/news/harry-nimmo-why-i-took-the-tricky-decision-to-buy-liontrust/a1381683  ;

horse

Can anybody help me understand the timing of ISA fund buying?

Eg the ftse100 dropped a little yesterday. If I buy into a ftse100 tracker today, am I buying at the value of the market at the end of the day yesterday?

I might be completely misunderstanding everything anyway, in which case please try to set me right!

RandallFlagg

horse said:

Can anybody help me understand the timing of ISA fund buying?

Eg the ftse100 dropped a little yesterday. If I buy into a ftse100 tracker today, am I buying at the value of the market at the end of the day yesterday?

I might be completely misunderstanding everything anyway, in which case please try to set me right!

It depends who your management company is. I'm with Standard Life and they don't move that quick, it takes a few days from request to buy and sell and so transaction date is very hard to time.

Tracker funds and mutual funds aren't really designed for quick trading, more a buy and hold for several years scenario. A software app like E-Toro, FreeTrade or the Interactive Investor site would be quicker but quick trading is usually done in individual shares. ETF's (Exchange Traded Funds) may be quicker than a regular Tracker fund but I have not experience of using them

yocky

ETFs are definitely the way to go if you're trying to time the market perfectly, and that can be a real bonus with the sort of volatility we're seeing.

The big downside for me with ETFs is that they tend to act like a normal share and distribute dividends on a regular basis. If you're investing for the long term an accumulative fund that holds onto the dividends and reinvests them for you is a much more cost effective and efficient option in the long run.

ToneControl

yocky said:

ETFs are definitely the way to go if you're trying to time the market perfectly, and that can be a real bonus with the sort of volatility we're seeing.

The big downside for me with ETFs is that they tend to act like a normal share and distribute dividends on a regular basis. If you're investing for the long term an accumulative fund that holds onto the dividends and reinvests them for you is a much more cost effective and efficient option in the long run.

not if your investing within a pension

ToneControl

horse said:

Can anybody help me understand the timing of ISA fund buying?

Eg the ftse100 dropped a little yesterday. If I buy into a ftse100 tracker today, am I buying at the value of the market at the end of the day yesterday?

I might be completely misunderstanding everything anyway, in which case please try to set me right!

AFAIK if you send in a buy order today, it is executed the next working day at the price set aroudn noon that day
I think you can buy up until 8am on that day for Uk funds (i.e. before the UK market opens)

horse

Ok thanks guys - so to a degree you're always jumping into the dark on the actual price you're buying in at?

I've held off completely since the initial market falls, but had started to think about dripping small amounts in when the FTSE is around or below 6000. My instinct is there may be another panic sell-off at some point, so I'll maybe hold fire for now.

yocky

horse said:

Ok thanks guys - so to a degree you're always jumping into the dark on the actual price you're buying in at?

I've held off completely since the initial market falls, but had started to think about dripping small amounts in when the FTSE is around or below 6000. My instinct is there may be another panic sell-off at some point, so I'll maybe hold fire for now.

Unless you're buying shares or an ETF, then yes you're at the mercy of the movements between your order being entered and the next valuation point of the fund.

For a FTSE tracker I would guess the dealing cut off is probably around midday and the valuation point (when your buying price is actually determined) will be at the 16:30 close of business. So it's not too bad

You might want to investigate ETFs, they would certainly work better for your timing the market attempts, plus it's often possible to choose to reinvest dividends automatically for a small fee within an ISA so you wouldn't lose out on the compounding aspect.

Vanguard have a FTSE one:

https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-100-ucits-etf-gbp-distributing

yocky

ToneControl said:

yocky said:

ETFs are definitely the way to go if you're trying to time the market perfectly, and that can be a real bonus with the sort of volatility we're seeing.

The big downside for me with ETFs is that they tend to act like a normal share and distribute dividends on a regular basis. If you're investing for the long term an accumulative fund that holds onto the dividends and reinvests them for you is a much more cost effective and efficient option in the long run.

not if your investing within a pension

I don't quite get this. I have a SIPP and dividends/distributions are not automatically invested anywhere, so it seems to be preferable to choose a fund that does that automatically.

Sorry if I've misunderstood your point.

RandallFlagg

yocky said:

ToneControl said:

yocky said:

ETFs are definitely the way to go if you're trying to time the market perfectly, and that can be a real bonus with the sort of volatility we're seeing.

The big downside for me with ETFs is that they tend to act like a normal share and distribute dividends on a regular basis. If you're investing for the long term an accumulative fund that holds onto the dividends and reinvests them for you is a much more cost effective and efficient option in the long run.

not if your investing within a pension

I don't quite get this. I have a SIPP and dividends/distributions are not automatically invested anywhere, so it seems to be preferable to choose a fund that does that automatically.

Sorry if I've misunderstood your point.

Depends on the underlying fund. Some funds have 2 running parallel and Inc (Income) and an Acc (accumulation). Baillie Gifford offer this with their American B fund. The Acc fund will reinvest dividends automatically the Inc fund will pay them out and these will go into the cash side within the ISA wrapper. You can then choose to manually reinvest them or as mentioned above it appears you have them automatically reinvest, although I'm not aware of this facility in my ISA. 

ToneControl

yocky said:

ToneControl said:

yocky said:

ETFs are definitely the way to go if you're trying to time the market perfectly, and that can be a real bonus with the sort of volatility we're seeing.

The big downside for me with ETFs is that they tend to act like a normal share and distribute dividends on a regular basis. If you're investing for the long term an accumulative fund that holds onto the dividends and reinvests them for you is a much more cost effective and efficient option in the long run.

not if your investing within a pension

I don't quite get this. I have a SIPP and dividends/distributions are not automatically invested anywhere, so it seems to be preferable to choose a fund that does that automatically.

Sorry if I've misunderstood your point.

AFAIK if you have a savings/investment account outside a pension or ISA, then gains are subject to capital gains tax, which I think is when accumulative funds are attractive.

Not sure that an acc. fund would be more cost effective than an ETF just because you don't need to reinvest cash dividends yourself, since the ETF fees are usually much lower than the fees for unit trust funds

yocky

Ah I see. wasn't really considering the tax implications, just the most effective way to ensure that dividends are reinvested to ensure the benefits of compounding are reaped.