-
Buffets response to the safest investment was āS&P 500 index fundā. Is that what is currently on Freetrade app?
-
Are stocks in a way ācompound interestā?
-
Iāve had some experience on something like IQ Option which is day trading if im not mistake, Freetrade is very different as its more long term? Which by extension means āshortingā isnāt possible?
1 Like
Yes, Buffet recommended Vanguardās S&P 500 index fund which is available in the app 
If you reinvest your returns then they compound. Weāve explained what that means in more detail in this blog post -
Exactly, this is one of the key differences of Freetradeās service - weāre building a service for long term investors, not day traders - which has a big influence on the design & services we offer. Typically services for day traders are provided by companies that offer CFDs & weāve explained why weāre not fans of those here -
As you say, we wonāt offer shorting or leverage because we donāt want to expose our users to the risk of losing more money than theyāve invested.
6 Likes
Clear answer / Use of Medium and Fast reply. 
4 Likes
An exceptionally dumb question coming up but asking has done me well so far so here goes.
If I wanted to put Ā£5000 in Vangard S&P with my Investment ISA, would I then only be able to invest another 15,000 forever or will it cap out at 20,000 over the years (hypothetically)? When it says 20,000, whatās the deal etc (apart from it being untaxed etc)
ISA limit is Ā£20,000 per year
2 Likes
What would happen with any earnings past that?
Itās Ā£20,000 across all ISA products. As far as I know youād end up paying normal rates of tax after that. If it was with one provider theyād probably refuse to take any more than Ā£20,000
This is one for @Vlad to clarify 
1 Like
Everything Emma said is correct. ISA contributionsā limit is renewed every 6th of April and you can contribute another Ā£20,000 across your ISAs until April the 5th of the following year (subject to the budgetary changes). Source.
If by āearningsā you mean additional contributions over Ā£20,000, it is theoretically possible if you have more than one ISA provider you contribute to simultaneously (e.g. Cash ISA and S&S ISA). Do not do that. HMRC are unbelievably panoptic and most likely know more about most individualsā earnings and tax affairs than said individuals do themselves. Simply do not contribute over Ā£20,000. If you happen to have done it, then call them up and explain the situation. If you do not, they will not hesitate to call you and you probably do not want them to do that 
6 Likes
If you mean contributions, see @Vlad The easiest mistakes to make with ISAs are contributing to too many ISAs in any one tax year (there are four kinds and youāre only allowed to contrib to one of each in any one tax year). And contributing too much in any one tax year. Both mistakes would need to be fixed.
But if earnings beyond that means you put X in and then it grows a bit because the investment goes up in valueā¦ then enjoy the fruits of your moneyās labour, and tax free!
2 Likes
Did you receive an answer to this???
Iād be keen to find out also.
Unfortunately we canāt allow US citizens of any kind to open a Freetrade account at the moment.
But with some more work, that could change, please vote for the request here FATCA compliance - enable Americans to use Freetrade.
My weeky question 
If I buy stock in a company and thereās a degree of expectation that that company will be bought out at some point. Letās use SNAP as an example. Thereās assumptions that a bigger fish will gobble up SNAP, what would happen to my stocks if that were to happen?
My first thought Is that my shares and what Iāve spent are converted into the new owners stock perhaps? so say I have 300 shares in SNAP that would equal to like 1-2 shares in Amazon. (if they were bought by amazon)
Kind regards,
p.s made my first buy this week 
4 Likes
There is a real science to mergers and acquisitions and there are numerous possibilities of what can happen.
In a nutshell, the acquirer offers the price, then the acquireeās key shareholders (not the minorities like ourselves) decide whether they want to sell and if they agree, given there are no questions raised by SEC, a merger will eventually happen,
The most likely scenario for you is that you will get cash equivalent of what was the tender price, and SNAP shares will disapper from your brokerage account. That is it. Sometimes there could be other arrangements, for example, you get shares of the acquirer, but it is not common. It is, however, more likely when two companies merge and for a new entity, but again, does not happen all the time.
One other thing to remember, the share price of acquiree almost always rises once the acquisition is announced. The acquirerās, on the other hand, will most like fall due to the premium they will be paying. Therefore, it is not always easy to calculate the sharesā equivalent you are eligible for, hence cash is the most likely option.
You can read more on this here if interested.
Interestingly, there can be an opposite scenario, whereby a public company splits into more than one. For example, Freetrade has dealt with the split of Old Mutual, which turned into two separate public companies (Old Mutual + Quilter), and if you held shares of Old Mutual prior to the split, you would have got both (presumably of comparable value) the day after that.
10 Likes
Congrats on your first buy, hope it is the first of many. (Was it SNAP?)
1 Like
Afternoon! Iām buying my first few shares whilst I learn how the market works. Iāve been searching for an answer to this question but canāt find it anywhere!
I understand that when buying shares, I need to āspendā more than the shares current price to cover any rises, but is there a general rule for how much this extra amount will be?
Iām trying to work out how I would know what 5 shares of a company would cost with the extra cost included? Is it a percentage of the current price or a fixed price?
2 Likes
The way I look at Basic Trades is what is the maximum I would be happy to pay for per/share, and then go from there. Itās worth using the guidance Freetrade for daily price changes, see
There is a small caveat, in that if you were to enter Ā£3.55 expecting to buy 2 shares, you might find you get only 1 as the price has gone up. However, Iām sure in time Freetrade will provide some functionality to let you buy a fixed number of shares.
2 Likes
I tried doing this for a purchase earlier and input 1p above the current price, but it wouldnāt let me review my order.
The only way I could get it to let me continue was to add an extra 50p or so onto the price
It sounds like you need to include +0.5% for Stamp duty. Or it might be that āInstant orderā is checked as this is the default.
1 Like
Ah that may be it! I wasnāt factoring stamp duty!
1 Like