Which stocks and shares app is best?

(Rowan Blackwood) #1

Hi all :wave: I’m wondering which investment app is best for stocks and shares isa (if any)? I.e Moneyfarm, nutmeg, Freetrade, moneybox etc etc. There seems to be a ton of these now and it’s really confusing as to which one is better.

Basically, I want to start building up some long term savings so this would be initially a small amount (less than 1k) and then probably £50 / £100 a month or something.

Is a stocks and shares isa even the most sensible thing to do in this situation? It seems that any less than 5k won’t see a great return when you take fees into account.

Any help would be great!

Thanks

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(Sarcasm is the finest form of wit.) #2

Stocks and shares aren’t savings.

I’ve got a Marcus account for my savings. Freetrade I’ve started to look at to invest a little (£100 to start just until I understand how it works). If I ‘earn’ £10 by the end of the year I’ll put more in…

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(Rowan Blackwood) #3

Thanks for the reply. I have a standard isa for day to day savings like an emergency Fund. I wanted to see what else I could be doing though to maybe gain a bit more. I appreciate stocks and shares isa’s have a risk associated with them which is why I thought I’d start small. I have a Freetrade account but have been to scared to use it as I don’t understand it lol. I like your approach though and may just bite the bullet and do that. They too have an isa but I think the fees are £3 a month which seems a little steep unless you invest a larger amount.

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(Kenny Grant) #4

Yes. Because of the long term bit. Doesn’t matter if you’re not saving a lot if you save regularly. Also look at your pension though - if you have a workplace one do consider contributing more to that as well (less flexible, can’t withdraw, so has downsides, but small contributions can add up and employer contributions are worthwhile).

Freetrade might be good to start with, very low or no fees, and you can use the basic account to start off with then switch it into an ISA after a year or two - just pick an ETF and it is pretty low risk as long as your view is long term (i.e. > 5 years), and you are willing to overlook short term fluctuations - the important thing is regular saving, to build up capital. Long term I would use an ISA after you have built up funds, and long term I would definitely invest in S&S, not cash - you already have a cash fund so that’s great. I would avoid providers which charge a percentage fee.

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(Rowan Blackwood) #5

Yeah my plan here is long term. But choosing the “right” option now if that makes sense. I get that could change in the future, but getting it right for the moment is a good start. They all seem to charge a percentage with the exception of free trade. I guess I like the idea of a robo trader (nutmeg etc) where I can just send money to an account each month. But I guess I will pay the price that way. I do have a pension but because there is no easy way to see it it becomes a case of “out of sight out of mind” I think. Good shout on that though. Any good ways to manage a pension? I’ve seen pension bee but I haven’t looked at what it is exactly.

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(Alex Sherwood) #6

Have a look at the blog posts here, they should help you find your feet -

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#7

I use Hargreaves Lansdown- its £12 a deal which in my mind is expensive.

Been doing it since last year and choosing my own shares…big mistake as I am down by doing this. Only in the last couple of months have I moved my money into funds and let others do it, funnily enough I’m up…

I actually do it for some fun more than anything, there are safer ways of saving money.

Just to add that Funds are no cost to invest in but most if not all have a yearly charge split monthly

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#8

Freetrade mate - £0 or £1 a trade

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(Gavin) #9

I have a stocks & shares ISA through my legacy bank, which gives me access to their fund platform. It’s 0.25% per quarter and each fund has its own management fees, but the ones I’ve picked are cheap - 0.19% being the most expensive.

I don’t think I’d want an app --it would be far too tempting to keep looking at it, when investments are often best left to do their thing. Index funds tend to attract lower fees, but there are some “managed” OEICs that have a nice mix of bonds and global equities for a low fee. Has made a few quid in capital appreciation in a couple of months, which is nice.

I’d probably stay away from individual shares until I can afford to sink the cost of trading, but I’m testing out potential share combinations on Morningstar. In the meantime, funds give you access to a diversified portfolio without the up-front costs.

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#10

Hey. Going to start with the TLDR: bite the bullet with a mindset of investing for 5 years minimum; join us over in the Freetrade forum, ask questions, watch the YouTube vids of Freetraders showing their investment strategies & read the official Freetrade blogs; don’t worry about an ISA for now (you can transition over to one when your Portfolio is bigger) but if you prefer one now there’s a fee-free period till end of June; the default basic Freetrade GIA is perfect for starters in my opinion so I’d say opt for this one as you dip your toe in the markets.

Anyway, the most helpful way I want to respond to this post is by showing you & other apprehensive account holders my Portfolio to date as a fellow newbie (onboarded autumn 2018):


I’ve loaded my account with £400 total to date to get the ball rolling while I’m still young & have incurred zero fees for doing so.

At first I was checking the app every day as investing is exciting (or ‘scary’ in the short-term) and you’ll find yourself wanting to tinker with your portfolio early on as you learn more & settle on which ETFs, brands and stocks you’re comfortable with.

Currently, I’m in the green! :chart_with_upwards_trend:

Over time, I check the app less often (once a month-ish now when the monthly statement comes through) as naturally you become accustomed/desensitised to the short-term fluctuations and that initial excitement/fear wears off psychologically eventually. This is the sweet spot that Freetrade have imho: the mission is long term “investing for everyone” and don’t nudge you into trading frequently (portfolio churn) like other platforms may do. Whether you put a lump sum in or/and invest little & often (aka pound cost averaging), you can leave the app alone in between in the knowledge that you’re putting your money to work at amounts tolerable to you.

Every now and then you’ll get a nice dividend notification which happened to me today:


Overall, hopefully this little insight helps, DYOR and just go for it. The best time to invest was yesterday, the second best time is now.

P.S. Obligatory sign off: this isn’t investment advice, please do your own research.

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#11

For your amounts and the fact that you talk of “saving”, maybe A Vanguard Isa would be better for you. Lifestrategy or even Retirement. You can always transfer out later on - I don’t think vanguard charge for transferring out either, though I’d double check the details

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(Sendu Bala) #12

In my opinion, stay away from the robo advisors. Their fees are so high that they’ll likely eat up most of the profit you might eek out from their potentially poor investment offerings.

When investing small amounts of money, the fees are everything. So in those terms, the Freetrade GIA is absolutely the best stocks & shares platform out there for you. £0 in fees means there’s no minimum investment that makes it worthwhile.

The proposition of the robo-advisors is “we’ll take all responsibility away from you, so you don’t have to know anything about investing… and for that we’ll charge you crazy high fees”.

You’d be better off investing in yourself to start with by reading a book or blog or two.

Spoiler: just invest in VWRL. (But I am not a financial adviser, and you should do your own research… before coming to the same conclusion :upside_down_face:.)

Take some responsibility over your own life savings and you could be on your way to financial independence.

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#13

I have an AJ Bell Lifetime ISA. I think they are one of the few (or only?) stockbrokers offering a self-managed LISA. UX decent and not too expensive.

Highly recommend that if you are looking into managing your own portfolio and are saving for a house or retirement. If you want your investments to be managed (ie. paying someone to roll a dice on your behalf :wink:) then go with Nutmeg/Moneybox etc.

Also got very high hopes for Freetrade, nice app experience and free if you can wait for execution but it’s limited to popular stocks and AFAIK they do not offer LISAs.

Getting an instant 25% bonus just for making a deposit is huge.

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(chrisdalziel) #14

My view is that most people don’t have the luck to beat “the market” and platforms like Freetrade are designed for people who want to pick their own investments. Problem with that approach is that most of the market return is driven by very few stocks that are difficult to consistently pick, especially over the long run. Even buying ETFs is not full proof as the performance across different sectors, geographies etc. is often very varied.

You’re best to find someone (Vanguard, Nutmeg etc.) who will give you a better shot at market returns over the long term. I appreciate there are costs involved but if you’re looking for long term savings, you don’t need to try to shoot the lights out. You just need decent returns compounded annually.

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#15

When it comes to investment I think a flashy app is pretty low on the list of priorities. Fees and market access should be near the top.

I use vanguard, I have a direct debit that every month goes in to the vanguard lifestrategy 80 fund. It gets automatically rebalanced, performance has been pretty good historically and the fees are pretty much the lowest on the market. Their website is also really good on PC and Mobile so I dont see the need for an app.

Edit: just checked the fees, 0.15% account fee with a 0.22% ongoing charge for the lifestrategy fund.

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(Kenny Grant) #16

I agree, but that’s why fees are so important - you’re removing a decent % of your investment every time you invest and every year if you have high platform/fund fees. Esp. when starting out I’d go for the lowest fee option you can find. That’s why I’d avoid these roboadvisors or funds which charge % fees, a simple tracker ETF should be fine (there are global ETFs as well) - you can buy them on most platforms (Vanguard, HL, Freetrade) for relatively low fees, you don’t have to pick individual shares.

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#17

This. Rather than elaborate why, just listen to the master: https://overcast.fm/+JWZRZwMlY.

There are sophisticated and unsophisticated investors. The first group understand market mechanics, balance sheets, and can properly assess risk. The second don’t and have better things to do. If that’s you, then don’t worry: avoid all the high-fee, actively managed products and just buy a Vanguard mutual fund IMO. The Life Strategy range is more than sufficient, if you just want one, single, diversified product. The largest position in my SIPP is the Life Strategy 100.

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(John Williams) #18

Same here easy product to use but I have found best to start with a world index tracker.
Have made bigger gains with individual shares but made similar losses on others. Only try and beat the market if you have an edge Lars Kroijer book excellent explanation

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(Sendu Bala) #19

Your first statement above is mostly correct, but then the conclusion you draw contradicts it, and is therefore wrong. Vanguard and Nutmeg and all others offering actively managed products (or manager chosen subsets of the market in passive products) also do not have any ability to predict the future and pick the right stocks (or market subsets).

If you want market returns, you quite simply buy the whole market. Which is to say, invest in a global fund. Vanguard offer such a thing in OEIC form, as well as an ETF (VWRL). You don’t need to use Vanguard’s platform to invest in these, however. It is cheaper to invest in them on other platforms (iWeb in the former case, Freetrade in the latter).

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#20

Who do you have your SIPP with?

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