Investor Clinic – Sarah's new to investing & wants to invest £10K


#1

This is our first investor clinic, the aim of the clinic is to allow ordinary investors to get feedback from others. To comment and get involved there
[See the full post at: Investor Clinic – Sarah’s new to investing & wants to invest £10K]


#2

Hi @SarahB

I don’t profess to be an expert in investments, I’m quite new to it too.

I’m sure you will get better feedback from more experienced investors on here than me.

I have got some tips from the articles on here and from their Buy List. Also, I’ve had some tips on other websites like www.MotleyFool.co.uk and from Trustnet Investazine - There’s a link to it in one of the forums on here.

Here’s is what I’ve bought and I’m really pleased with:
Schroder UK Growth trust
Diverse Income Trust
Finsbury Growth & Income
City of London Investment Trust
Henderson Value Trust
Scottish Investment Trust
Scottish Oriental Smaller Companies Trust
Herald Investment Trust

Why do I like them - because they’ve done well or in the case of Henderson value Trust which is a new one I bought I think it will do well.

All the trusts above are tipped on here.

I only Bought Witan last week as well after it was tipped here.

Good luck and I’m sure it help that you are starting so early.


#3

Hi @SarahB

I have been an investor for about 30 years. I wouldn’t call myself an expert but I have have done rather well out of it.

I invest in a mix of investment trusts/shares/funds.

Interestingly, although @MumKnowsBest professes not to be an expert, her suggestions are not bad at all and I wouldn’t disagree with any of them.

What i would suggest however is to buy the areas of the stockmarket which are cheap right now and should do well over your 5-10 year investment horizon.

I’d put more in Asia/Emerging markets, Scottish Oriental is a good call but I would invest in Templeton Emerging Markets too.

If you are patient you can make a lot of money out of Private Equity and I’d recommend you put something there. DBAG (Deutsche Beteiligungs) is a good choice.

Overall I’d suggest investing in 8 different trusts/funds, any more and you will struggle to cover the trading costs.


#4

Thank you very much for the feedback.

One thing I’m not at all sure about is when do I buy any of these?

I mean like literally where do I go because I don’t know?

Thanks :slight_smile:


#5

@SarahB I’m new to the investment trust world but I’ve been investing in funds and shares for many years.

Investment trusts are great but there are some really good funds out there too that I think you should consider.

One I’d recommend is Fundsmaith. It’s managed by the legendary Terry Smith who has been around in the city for years and since it was founded in 2010 it’s up 64%.

It’s the type of fund where you can leave your money without worrying. It invests in large household names the pay dividends and financially secure.

In terms of where to invest have you thought about Hargreaves Lansdown? I use them, it’s an easy platform to use and the fees are reasonable.


#6

@SarahB the recommendation from @MumKnowsBest is actually pretty good but for you it’s to UK focused so I’d change it a wee bit to make it more international.

Also, it’s missing is a fixed interest fund. I’d suggest Henderson Diversified Income because it’s got a lot of flexibility and low charges. Also it’s just got over £100 million in value which makes it more attractive to wealth managers so it should be more in demand.

I’ve bore in mind that you want to be able to leave them without worrying too much.

Henderson Diversified Income
Schroder UK Growth trust
Diverse Income Trust
Finsbury Growth & Income
Henderson Value Trust
Scottish Investment Trust
Scottish Oriental Smaller Companies Trust
Herald Investment Trust
Henderson European Focus
Baillie Gifford Japan

That’s 10, I’d put £1000 each.

I don’t know what is the best platform but I use Alliance Trust Savings.

Good luck hen!


#7

I agree with @AlexBarr you need to have a little bit more than @MumKnowsBest suggested overseas (though her selection was otherwise very good).

I think Templeton Emerging Markets is an essential for a long term investor who doesn’t want to worry too much and it’s pretty cheap right now too.

In Alex’s suggestion above I’d swap Scottish Investment trust for Templeton but otherwise it’s good to go.

This is a great feature by the way. I’d love to see some follow up in maybe 6 months a year.


#8

Wow, amazing. Thanks to all of you for your suggestions. I would never have come up with them.

One question I have is do I invest £1000 in to each of those ten, so do I do it equally or not?

Also, this might sound stupid but how do I buy them?

:slight_smile:


#9

There is a discussion about this board on Motley Fool. That’s how I found it…
http://boards.fool.co.uk/why-are-investment-trusts-suddenly-so-popular-13022452.aspx?sort=whole#13022452


#10

I’m new to this site but have been investing, mainly in ITs, for about 25 years.

  1. Make sure you are using your tax-free allowance - invest in an ISA wrapper.

  2. £10000 split 10 ways will make the charges add up significantly, as well as overcomplicating your investment. I would just bung the lot in a global generalist IT, giving an instant diverse spread of investments with minimum fuss.

  3. Some providers operate their own low-cost ISAs and savings schemes, with features like free dividend reinvestment. Take advantage of these.

I would take a look at the Scottish Investment Trust, Bailie Gifford Scottish Mortgage, Foreign and Colonial Trust and Aberdeen Murray International. Google their websites.

  1. Timing: you could just stick it all in at once or drip-feed monthly over a longer period. There are arguments for and against both approaches. You have to do what you are comfortable with.

Regards.


#11

You’ve got loads of good advice here now love, don’t want to confuse you but I thought I’d add my two pennies worth.

@rogerdecrecy’s point about putting it in an ISA is very important. He’s right about the simplicity of putting it all in one generalist global investment trust too because it’s cheaper, easier to manager, and you can just go away and forget about it.

You might think there is more fun to the suggestions above to invest in 10 trusts.

The cost to you would be around £10-12.50 to buy each trust, plus stamp duty (£5 in every £1,000) and there will be an annual fee for using whichever platform you use.

If you take @rogerdecrecy’s suggestion you’ll have no or low annual fee.

The other important thing is to reinvest your dividends. What this means is buy more shares with the dividends because that has been demonstrated to make you more money.

Have a look at the graph in this article here, it’s on pensions but take a butchers at the Scottish Widows graph to see how much better you will do if you reinvest your dividends… http://www.whichinvestmenttrust.com/ignorance-destroying-ordinary-investors-pension-pots/

Also, Scottish investment trust article here… http://www.whichinvestmenttrust.com/invest-sit-back-and-let-it-grow-scottish-investment-trust/


#12

@SarahB you have received a lot of very good feedback.

On a small amount such as you are investing the suggestion from @rogerdecrecy seems sensible to me.

If as your description suggests looking for a little bit more risk than of the investment trusts he mentioned Scottish Mortgage is the most adventurous. It invests more in tech stocks.

It will be interesting to learn what you decide so do please let us know.

You may like to know that women are supposed to make better investors that men, I hope you do well too.


#13

Sorry I’ve not been back here for a while. Unfortunately my Nan who gave me the money to invest died. She saw this board before she died though.

I am going ahead with some of your suggestion so thank you very much. I really didn’t know anything about how to invest of where to invest so I can’t tell you how much help this has been.

A big special thanks to @rogerdecrecy @DerekW @Buck @Mohammed @Steve @AlexBarr @MumKnowsBest @richardsmart @smithy101

:slight_smile: xx