The Investment Newbie

[Cameron]

I think this is a sensible approach

@ldn2bristol

Which ETFs should I invest in to create a nice, diversified ‘savings’ pot?

Your ETFs currently only cover 2 countries, which reduces your diversification, you may want to consider something more broad.

The simplest thing would be to just track the whole world:
£VWRL - Vanguard FTSE All World

The next simplest would be to split out the world between emerging and developed (so you can pick how much of each you want of each)
£VEVE - Vanguard FTSE Developed World
£VFEM - Vanguard Emerging Markets

If you want to get even more custom you could look at splitting out UK and the rest of Europe, US, emerging and any other countries you want. This might be excessively complicated to manage/balance though.
£VERX - Vanguard Dev Europe ex UK

• UK (FTSE 100)
• USA (SP500)
• Emerging
• Others (Japan etc)

@ldn2bristol

What’s the best way to split the investments so that I can get a clean 70/30 distribution? I only ask because not all shares are fractional, so it really makes it a pain in the ass trying to split £100 up when I am committed to spending £48 on my S&P500 alone!

I think without fractionals you’ll just have to make the best of it, if you end up 28/72% it’s probably not the end of the world

@ldn2bristol

As I’m in my mid-20s, should I be willing to take more risks or look at investing in stocks that pay more dividends? If so, which ones?

Risk is really a personal preference, if you opened the app and saw your portfolio had lost 30% of its value (as in March) how would you cope with that? If you are happy knowing that in the long run 10+ years you will be better off, then great - take on more risk.

If you wanted a bit more risk you could consider ETFs that give exposure to factors with greater risks.

£VVAL - Vanguard Global Value Factor- This tracks companies which are priced cheaply and therefore considered more risky
£WLDS - MSCI World Small Cap - This tracks smaller companies which are generally considered more risky that larger ones

or you could pick whatever individual companies suit your risk.

I’d say generally ignore dividends when making decisions (see my freetrade thread on why) they shouldn’t have a material impact on your total return in the long run.

@ldn2bristol

Any tips for small, individual companies that you believe may provide growth over the next year? I’m specifically looking for cheaper stuff around the £2-£10 mark

I’m not going to recommend anything, I’d say buy what you know.

I loosely follow the semiconductor market so some of my individual picks (ASML,TSMC, AMD) have centred on that, but don’t just buy something because a stranger on the internet likes it.

It doesn’t have to be massive professional knowledge of the sector, it can even something simple. For example my investment in BYND was just because I was a big fan of the Beyond Burger (especially after it was finally available in the UK) and knew plant-based foods were a big growth area. Being close to something means hopefully you can feel consumer sentiment shifting before it appears in earnings reports.

So far my worst decisions have been buying things I don’t really understand but following other investor sentiment / advice.