I have previously been using Moneybox to start my investment life. Iāve been using them around a year or so, just saving spare change.
At first I had a little bit in a stocks and shares ISA, then I grabbed a LISA when they came out with them too and that has quite a bit more in it. Hopefully perhaps Freetrade will introduce a LISA.
I realise currently Freetrade only helps me with the S&S ISA.
Please bear with me with these very basic questions.
I stopped adding money to my moneybox S&SISA because the fees seemed really high for the amount that I was adding in. I came across Freetrade and have opened an S&S, but notice the monthly fee will be Ā£3 (after the free period) but that Iām not going to be charged as many fees on the investments per month, right?
Itās difficult/confusing to compare all the fees and know whatās betterā¦
Iām thinking I would like to put aside Ā£50 a month into the S&SISA with Freetrade, and am still reading up about how to diversify. I understand itās best to be passive for long term gains in multiple ETFs. Iāve seen a post on here about examples for new investors which seems pretty solid to begin with. Then once I have a good balance in ETFs I will pick specific stock I like the looks of in areas I know a bit about; Apple, Netflix, Tesla, and some further diversification likely necessary in other markets.
Would it be reasonable to transfer my current S&S with moneybox into this new one with Freetrade? I prefer to simplify, but am I likely to lose money on transfer fees of what is a very small amount in attempting to do that, even if it is possible?
Another question is does Freetrade yet have any ethical based ETFs? I tried searching for some online and corresponding into the app discover but couldnāt seem to find any matches. I would like to try ethically investing in line with my personal values.
The ISA will be Ā£3 a month and the only other fee would be if you wanted an instant trade instead of the basic free one at 4pm. That would be Ā£1. Thereās 0.5% government stamp duty on individual stocks, but not on ETFs or American stocks
There is currently no transfer in ability from over providers but theyāre working on that. Freetrade wonāt charge you transfer fees but youāll need to look and see if Moneybox have a charge. There have been requests for a Freetrade LISA but itās not on the roadmap.
Thereās no ethically based at the moment but once the new investment platform is built they will be able to add loads more new stocks a lot quicker, and thatās expected in the next few months as well. That will also mean fractional shares will be available which will help you buy those expensive American stocks
Not sure if youāve seen this blog on diversification but itās worth a read
Thanks a lot for the response. It begs the question, then, that if I invest in certain stocks now, if ethical/new stocks became available then I assume I would be best to buy new stocks and keep the old ones in place, further diversifying the portfolio?
Im ok having two S&S ISAs with two providers as long as I only pay into one within any tax year right?
So looks right now itāll be continue holding Moneybox (or withdraw) and Freetrade simultaneously.
Whatās the existing total value of your investments?
Moneyboxās standard charge seems to be Ā£1/month + 0.45% of total, while Freetradeās ISA accont charge is Ā£3/month. 0.45% of Ā£445 is Ā£2, plus the Ā£1 is Ā£3. So if you have more than Ā£445 already invested, Freetrade will be cheaper.
At these small amounts invested, you also donāt actually need an ISA, since you wonāt pay any taxes for quite some time due to your personal allowances.
Which means you donāt need to wait for Freetrade to implement ISA transfers. You can just close your Moneybox account, take the cash out (losing ISA wrapper status), and put it in Freetradeās free basic account.
Then youāre not paying anything in fees until itās worth paying for an ISA.
You donāt have to answer that but everything @anon287192 says is spot on regarding your options.
Sorry for butting in @anon287192 its just Iām a fairly new investor too (started learning on this forum about 6 months ago) and was a bit embarrassed at my small portfolio amounts at first, and a question like this on one of my first posts might have made me nervous.
@joe For info if it helps as an example, I am well under the limit for needing an ISA and am using freetrades free general investing account with the intention of moving to an ISA when I have probably 15k+
Dividends are payments sent out by the companies you have invested in. Iāve no idea what you have invested in using Moneybox, but letās assume itās some kind of broad fund comprising many different companies.
In that case, we might guess at a dividend rate of around 2%. This means if your current total investment value is Ā£445, you will receive about Ā£9 in dividends per year. Obviously itās a long time before you exceed your dividend allowance. When youāre in danger of exceeding it, youād want to move your investment to an ISA.
Your other consideration is capital gains. If you input Ā£400 cash and your investment is now worth Ā£445, and you choose to sell all Ā£445, it means you gained Ā£45. Your capital gains allowance per year is Ā£12,000. If your gains are above that, youād pay tax on the excess. So again, when you become in danger of your gains going over Ā£12k, youād want to switch to an ISA. For now just keep an eye on it every year, keeping in mind that youāre considering your cash inputs right from the very first year of investment vs current value, to work out your gains.
Donāt worry have a fish around on this forum with the search bar there is tonnes of information. This is an article from one of the freetrade team @Freetrade_Team that should answer some of your questions (and may lead to more, in which case ask!)
Itās weird that I mentioned here that it was 6 months ago that I joined the forum as I have literally just gotten my 1 year badge! Clearly I have been on here longer than I thought!
Moneyboxās standard charge seems to be Ā£1/month + 0.45% of total, while Freetradeās ISA accont charge is Ā£3/month. 0.45% of Ā£445 is Ā£2, plus the Ā£1 is Ā£3. So if you have more than Ā£445 already invested, Freetrade will be cheaper.
Itās 0.45% per year, charged monthly. So if your portfolio is Ā£455 and stays static throughout the year, youād pay Ā£1 a month, plus 16p a month.
The breakeven point is around Ā£5300, compared to FreeTrade, but that ignores the fund fees (0.12% - 0.30%) which matters, but is a far cry from the 8% in your calculations!
As an aside to the OPs question, can anyone recommend some good apps, news sources or forums to keep tabs on what people think the must-buy stocks are?
I have a decent enough understanding of the market and itās mechanics and do my own research, but historically I invested in passives, and want to dabble a bit more with active stock selection.
There is no such thing Iām afraid, otherwise everyone would have been buying them.
The only single best solution is to buy a fraction of the entire market, which has always gone up historically. You can research ETFs like this yourself to find the best suited ones, but VWRL, for example, contains 2,900 holdings of all sorts. IWDG contains 1,641 different securities. Both are available via Freetrade and maybe could arguably with a grain of salt be considered relatively safe investments.
If you bought Ā£100 in stocks of letās say FTSE 100.
In the space of a couple months you dropped 20% of your value. You then have another Ā£100 ready to invest, but youāve just seen that youāve lost Ā£20 value.
Would a smart investor buy into that same stock at the lesser value, and simply wait and watch for the value to increase?
I can see the value in doing that, but surely thereās a limit of how low you would buy (or to know when to buy as you see it decrease in value) as you have the awareness that this is likely a dip and that it will return closer to the value you expect it to rise back to.
This would be the knowledge I lack entirely, if anyone could point me to some basics of watching stock value, understanding the common value of the stock and having the wisdom of knowing when the stock is likely just dipping, and when itās likely over valued currentlyā¦
I know this is likely a āif we all knew then weād all be millionairesā¦ā kind of question but Iād like to learn what I can to know whenās a good time to buy a stock and when isnāt and perhaps holding off for a while
You can queue a basic trade when the market is closed but you canāt do an instant trade or queue one
Buying when it drops is a good move generally
Sudden drops can be due to political factors, a bad earnings report etc so thereās no magic solution to time the dip, but to understand the value of a stock you could read this
It depends on if youāre talking about stock of an individual company or a broad fund holding many companies. I think youāre talking about the latter since you mentioned FTSE 100.
If your fund is broad enough (eg. every stock in the world, instead of just the top 100 in the UK), you would probably gleefully buy more and more the further the stock market fell. I donāt think youād worry about doing much analysis. This is because the whole reason you or anyone else invests in the stock market is that you have a belief that, over the long term, the stock market will rise in value. And sudden crashes are followed by sudden recoveries. And the ideal is to ābuy low, sell highā. So buying stocks at an average cheap price will mean you can sell them later at an average high price.
If your fund is less broad, or youāre dealing with a single stock, then you have to look at the financials. Is the FTSE 100 down because of an irrational market panic, or because the UK government declared stock trading illegal? Is the companyās stock down because a large holder sold all their shares, or because theyāre drowning in debt, have no way of generating enough profit to recover, and are on their way to bankruptcy?
In a nutshell you ask yourself āat these prices, what kind of future return can I expect?ā. One simple rule of thumb is 1/PE (price to earnings ratio). You can find the PE of a single company, or consider the average of a whole country. The lower the price, the lower the PE, the more money youāll make in the future, since the earnings are still there.
Thank you both for above, lots to think about and learn there. Will continue to read and learn.
Really stupid question time:
If youāve bought just 1 share of a stock, at say Ā£14, and the stock value/price nose dives to Ā£0 (or below) - is that share lost/gone? Or do you still own the share that has no value (or minus value)? Or is this even possibleā¦
Itās not possible for the value to be negative: that would mean you owe them money, which doesnāt make sense.
See the Debenhams - DEB.L thread for what can happen when a company goes bankrupt. But regardless of the specifics, if the company never makes money again (eg. because it ceases to exist), then your investment becomes more or less worthless because:
If you still had the ability to sell your shares, no one would want to buy them at any price
The company can no longer give you dividends
If the companyās assets are sold off, you still might not get any of that money because sale proceeds will cover loan debt first, and shareholders last
but everything 