Ask your beginners questions here 🐣

One way to look at this is we have just gone through a 'lot of uncertainty:
• US / China trade wars
• Global virus
• US election

…You would think that with this major uncertainty largely looking in the rear lights, real valuations and less concern would provide a green light.

The obvious signs to look out for are:
• Inflation
• After shocks from the virus.

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Depends on the market, the S&P and FTSE100 are back to where they were a few weeks ago, the Dow and DAX are a couple of pennies from their highs. The Nasdaq - not so good.

Some parts of the market are coming down fast, others are going up. If you look at sector ETFs in the US, financials, energy, industrials, materials are doing fine.

Although I am new to this game I do feel I am quite clued up on the global news and what might be dodgy or great to invest in but obviously have many things to learn. Rather than post regularly asking obvious questions that I could read up on I thought I would ask simply can anyone see any major flaws in my strategy below? I am not after a quick get rich scheme but something fairly safe with a bit of gambling to feel like I am “Billy Big Bollux” occasionally.
Basically I invest X amount each month spread across say 10 new safe-ish items I like and as I grow into it maybe top up some instead. With all the dividends I take gambles on things like pineapple power, napster and cannaboids etc.
In my mind, my main portfolio is spread well in what I rate as a good long term investment but I get the buzz playing with dividends and although maybe losses they feel acceptable as I never had that money in my pocket.
It did say beginners questions here so just thought I would ask in case I am missing a glaring error in my approach to my FT account.

You sound very well prepared! Your overall strategy of having a ‘core’ of a few safe-ish items (such as globally diversified index trackers) that you regularly drip-feed money into, plus a ‘satellite’ or ‘mad money’ section of your portfolio where you have the fun of researching companies and picking individual stocks, is solid. Your ‘core’ is where you will benefit from the fabled wonder of the world that is compounding of returns. Don’t spread yourself too thinly there – just a handful of ETFs would do you well. Your stock-picking ‘mad money’ should be the minority part of your investments (maybe limit it to 10%?), but that depends on your appetite for risk.

Some people will suggest that your ‘core’ should include cash and bonds for safety in case a stock market crash comes along. If you’re far from retirement, have a steady job/income, and are brave, that could be a small amount; conservative folks suggest keeping a cash ‘emergency fund’ of three, six, or even more months’ expenses as a safety net.

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An interesting reading not only for beginners, I think.

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Loss-Aversion bias doesn’t seem to bother me because I foolishly don’t set a target stock price. Haha.

I guess I probably should? =/

I don’t either

There is just so much advice out there that trying to narrow it down is really difficult. Other than this forum what are everyone’s top three forums, websites etc that give the best top stock picking tips.

I too have a similar “strategy” 80% of money into ETF’s, 20% into Dividend stocks and a £2k pot to play around with mining and meme stocks. Any profits over the £2k will periodically be moved from the Meme pot, back in the ETF’s and Divis.

It works for me… (so far) but of course DYOR.

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I think one aspect often overlooked around here is motivation!!! A lot of people on this app will be new to investing and the frequency they deposit is not a given. For some of these people small dividends may motivate to add more to top up to re-invest and not paying for a take out etc. I can’t help but think I would be a lot richer if this app was around 20 years ago :joy:

Everyone is different and as many say DYOR and most importantly what is best for you!

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Hey guys, beginner invester here. I’m just looking for some advice on this potential portfolio:

SWDA (developed world large/mid cap)

WLDS (developed world small cap)

EMIM (emerging markets)

Those 3 would make up most of the portfolio. They give good market cap and geographical diveraity.

But I wanted to allocate around 30% to sector specific ETFs. I have 8 of these in mind and they do not have much overlap having looked at the holdings. They are ISPY, BCHS, INRG, AIAG, DRDR, ESGB, CHRG, and RBTX.

Would this portfolio be wise, or have I misunderstood the way in which I should use different ETFs?

This is basically the same as what I have, 70% global indexes and 30% specific ETFs or funds.

I’ve also spread the cash across both SWDA and VWRP, just so I’m not fully invested in one fund provider.

I think it matches my risk profile pretty well, I want diversified exposure for the main ‘core’ of my portfolio but also like to take my chances on picking specific trends.

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Hey thanks for the reply dude.

The rational behind going with iShares is because different providers have different definitions of what consistutes large, medium, and small caps. So it avoids doubling up or totally missing out on things (credit to money unshackled on YouTube)

Ah, I never knew that! I’ve seen a couple others on here recommend not using the same fund provider for all of your portfolio but that’s an interesting point - we may be doubling up on those companies which are on the large/mid and mid/small borders :thinking:

I haven’t looked into the details of those specific funds, but I very much agree with the overall strategy of having (1) a globally-diversified portfolio covering developed and emerging markets, and large, medium, and small cap companies, and (2) a layer on top of that with more speculative sector plays. I think that’s exactly the way to go for building up your portfolio. If you’re so inclined, you can then add a third layer for picking individual stocks, secure in the knowledge that if you get your picks wrong, you’re at least getting the market average return for the majority of your money.

Have you also considered a cash and/or bond layer? It’s often advised that people should have an ‘emergency fund’ in cash that is sufficient to cover all living expenses for a while in case of a market downturn (so you won’t end up having to sell stocks while they are down). How long a crash you want to insure yourself against is up to you, but I’ve seen people advise keeping 3, 6, or even 12 months’ expenses in cash. Personally, I am self-employed, so my income is less stable than someone with a regular job, so I try to keep my emergency fund towards the upper end of that range. Young people with good jobs and no dependents can generally take more risk, and put most of their money into stocks; older people might consider keeping a well-stocked cash emergency fund and even a short-term bond fund to provide even more protection against bear markets.

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You’d also want to be looking at the error rate and the fees tbh.

Vanguard’s tends to be more accurate than ishares, though not always.

The other thing to consider is that sector etfs tend to have higher fees, most are rocking charges of 0.65% or within the range of 0.40-0.80%.

You need to consider, do these sector etfs offer enough growth to offset these extra charges that it would be a better investment than your global etf, which is likely to be charged at 0.22% (it does add up.)

I’d pay close heed to the sector etf make ups and their historical performance. Consider if a spiked etf is worthwhile (like inrg recently, which has dropped from its sharp spike), or whenever an etf is truly matching its definition. For example; I think one of the top holdings for robotics is Snapchat, and one of the top holdings for a sustainability fund is actually amazon.

Basically does the title match the holdings? Does it align with your own experience and understandings?

Is the sector worth more than the global market? If not, why are we investing in them?

For an example, I’m invested in wood, which is a lumber sector etf, and part of the reason I’m in it is because that etf is made up exclusively of reits (property) and lumber industry. So it nets me two for one in diversification as part of my portfolio goal. So, where do your sector investments fit? Do they perform growth wise or diversification wise?

Finally, I’d consider looking into a bond layer as already mentioned, etfs are great but you can always do with asset diversification as well. Bonds aren’t amazing, but they’re a useful asset all the same. Consider a small holding there.

Otherwise, your global/emerging and small cap is sensible and simple in my opinion, and is an ideal starting point. If in doubt, stick with those three as 100% of your portfolio for now until you’ve done more in depth research perhaps? You always have time to research and consider and you should as it is your money at risk.

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An insight all newer investors may enjoy to hear

Thank goodness for free trading platforms, think how much HL would eat into your gains as they charge per trade :worried:

Can anyone tell me how to cancel a queued trade please? I don’t have the option, when i go to the queued trade.

Hi newbie question. When you buy shares in ah ETF or trust that charges, how is this charge collected from your freetrade account or do they deduct it from your sell price?