New to investing little assistance needed please

Hello fellow investors :slight_smile:

I have registered with Freetrade little bit over one year. I just learned about investing, money value, and business in general(coming from the ex-communist country nothing was taught in schools and the mentality was safe money under the mattress) I discovered I don’t know anything about investing. With determination to learn, I went over a few books aka “the little book that beat the market” “Security analysis” by Preston Pysh “The richest man in Babylon” and much more mainly around Mr Buffet mindset. And thousands of hours on youtube. As it’s said knowledge its more valuable than money :slight_smile:
Finally, I’m ready to create a portfolio in the current market conditions. I have two main questions and I’m not looking for advice on where to invest but more of quality of diversification and my logic. Following Warren Buffett advice and reading his books I’ve decided to go with 60% in ETFs (IUSA, VWRL) for greater exposure (the US and the rest of the world)and reducing risk. And 10% VUCP in terms of bonds. And will fill the rest 30% with individual companies which I love and will try to evaluate based on my current level and of course in an attempt to get better in picking single securities. As I said i don’t seek a piece of advice about my picks but more about if my logic is sound? And second I can’t find what’s the difference between IUSA and CSP1 except one reinvest the gains back to the fund. But is that not hurting your ability to take advantage over compound interest? My end goal is to use compound interest as long as I can.

Again apologies for the long post and my bad English but im certain I will find great value in your words :slight_smile:


If the fund reinvests automatically, you directly profit from compounding without doing anything. That is rather an advantage.
The approach sounds definitely decent.

Difficult to answer that post without giving advice. ETF are essentially an asset that is traded on the stock markets that simply holds a group of companies. You will typically find that around 1/3 to 50% of many fund is made up of around 10 companies. The rest will be various others, possibly bonds and cash. What you should at least check is that companies you want to individually invest in are not already weighted in your funds.

Some indexes typically out perform others. The S&P 500 has outperformed the FTSE100. While the S&P 500 is most American companies many of the FTSE 100 companies actually are international and so it is important not to think of them as the British economy.

While ETF are usually considered very safe, the Woodford fund crisis shows that if people want to cash in their funds and the funds are too heavily invested in illiquid stocks (perhaps investments not easily sold) then the value can crash and force the value down as the fund manager is forced to sell at bad times for bad prices ruining it for everyone.

Your investment strategy should be based on your goals and when you want the money back.

As a general rule of thumb if you don’t want your money back within 2 years investing it in various investment funds by different providers covering different countries is a very diverse way to spread risk and should also require little intervention and monitoring.

I think IUSA and CSP1 are both S&P500 trackers so should broadly have a similar return. But since they are two different providers there is also that diversification of fund managers, as mentioned above, despite them both tracking the same index.

Thank You Ben for the quick replay. For CSP1 I was just wondering what is the difference as the price difference suggest that there must be one. Thank you for pointing out about FTSE100 I genuinely thought its related to the British economy and tracks British company similar to S&P500 in USA. In terms of time frame I will not touch those funds for at least 15 20 years and contribute monthly into them so I can utilise the effect of compound interest and get that benefit from dollar cost average effect. Once again thank you for you inputs @SebReitz as well. I know its difficult to answer without giving advice but at least if you can answer if my logic in terms of starting up with investments has a stable foundations will be great.

Price difference is irrelevant for funds. I can give you an example. Say you have two etfs that track an index. Both are worth 10 million. One consists of 100 shares, which you can trade and one of 10. The first one now trades at a value of 100 000 per share and the other 1 million per share. While they are absolutely equal, their price is different by a factor of 10.


Not sure if I follow.
If I have two funds. One is £100 and has 10 shares that’s £10 per share. If I have another £100 and 2 shares that’s £50 per share. Difference? Just a paper one really.

Ahh beaten to it @SebReitz :laughing:


There is a difference between the two which explains the price. The CSP1 is ‘accumulating’ which means the dividends paid out by the companies in the ETF are then reinvested to buy more of the companies. So if you have 100 companies each worth $1 (so 1% each) and you get paid $100 in dividends a year you will own another 100 shares of each of the companies by the end of the year. The other ETF is ‘distributing’ which means the dividends are paid out to you. Personally I always choose ‘distributing’ as it gives me the option to reinvest the dividends into anything but everyone has their own preference (and more importantly tax considerations).

Thank you guys I understand it now. It does make a lot of sense.

1 Like