Who recommends what?
Some cash is turning up. No, I am not going to be wildly stock trading. I’ve written about stocks for a couple of decades now and my hit rate is not that great. A few, proper, conviction trades have worked. But no, I am not about to be playing with junior miners and the like.
So, boring dividend stocks, capital making an income. Fags, booze, life assurance companies, that sort of stuff.
But, I need a platform to do this on. IB seems to be much more for traders looking for leverage. Schwab maybe? US and UK would make sense to me – don’t know enough about Europe to get involved. And slightly worried about that US thing of interest and dividends paying 30% withholding.
But, which platform then?
Best would be to have US, UK and Oz (for the occasional junior miner) on the one account. And maybe Jersey etc?
Just googled and I’m gobsmacked that there are so many platforms out there. Some of them must be pass-throughs onto other platforms surely.
AJBell and Scottish Widows seem well reviewed with the notes on the second one saying: “charges no account fees, so it’s a very low-cost option if you don’t want to trade regularly”
Usual caveat on here applies: Recommendation regulated by the voices in my head etc
I have always told our Young to avoid anything that might conceivably draw them to the attention of the Internal Revenue. That may well include Schwab.
I have also been known to comment that the gains in equities during a forty year period of broadly declining interest rates may not be matched by a forty year period of the opposite.
How can I know we’re entering one? I can’t; but
“An’ forward tho’ I canna see,
I guess an’ fear!”
I’m past the age of hoping to make heaps; preserving what we have matters more, else who will pay for my widow’s care?
As for who to use why not consult the comparison table in the Monevator blog?
Or you could look at what the Lemons have to say.
https://www.lemonfool.co.uk/viewforum.php?f=26&sid=44ce59c2449c1edf2d5fbd17a2bc4650
You can just set up a Freetrade account. And I have a tiny bit in there. But I like Interactive Investor. You do pay for it, but the fees ain’t bad (about £4 a trade), and the service is good. You get almost no service with Freetrade.
I have some ETFs, UK, some US, my BYD shares are on the Hong Kong exchange. I’ve owned Mercedes on there. I’ve not found much I couldn’t get, except a weird chinese chip maker. I’ve never bought Australia, but I randomly looked up a few like Lioncorp, Amcor and 29Metals and they’re on there.
If you’re tax resident in PT, this may affect things.
Also, the amount you’re putting in will affect things. If it’s a small amount then a variable fee might suit, if it’s more then a flat structure would be more beneficial.
I use interactive investor, a subsidiary of Aberdeen (who’v rcntly rplcd all thir ‘e’s). Flat fees of £12.99/mo including one trade, extra ones are cheap, £3.99 for most exchanges. That includes ISA, SIPP, kids’ JISAs and a general trading account, I believe they offer a cheaper tier if you’re not bothered about having all of those.
If you’re not trading much then a “free” platform might make sense, although they tend to bite you on FX spread. You might not think that matters if you’re not trading much, but I’ve heard stories of platforms that grab 10% of dollar-denominated dividends in FX fees.
I trust Tim banks with Wise. FX fees are largely other people’s problems.
WRT to the 30% withholding, you’ll need a W8-BEN. That fixes everything for non-US residents in countries that have a tax treaty. UK does, I would expect Portugal does too.
I use AJBell. I bought a US stock yesterday, after the UK market had closed. It took me through the W8Ben process quickly, a few tickboxes is all. FX took about half a percent.
IB tested my patience by making me “agree” to 20 plus documents each of which you have to open and scroll to the end. Near the end of the process I went off them to the extent that I still haven’t used them.
Why not take Warren Buffett’s advice and put it in an index fund? Have you read The Money Game by ‘the writer known as Adam Smith’? Small investors are just fodder for the big sharks to feed on. And then there’s tax.
In my small cap trading days when I still believed that I was a Bernard Baruch waiting to happen, I looked for stocks with low P/E ratios, on the theory that the upside had to be bigger than the downside. It didn’t work out too badly.
Index funds are guaranteed to underperform the index.
Yes, but to match or outperform the index you have to know what you’re doing. Most people don’t including the missus and me, so we dump our spare cash into something like Wealthify and turn the dial up to 10.
Possibly. Buffettology was written thirty years ago and things have changed since then.
Michael, any fund has admin costs (one of which is keeping a record of who has bought units) but the Index does not. So any index fund MUST underperform the index. That has not changed.
Which index fund? Internet China, Nasdaq, S&P 500, FTSE 100, KOSPI?
All these Koreans who leveraged themselves to stick money into the KOSPI are finding out that the KOSPI is overwhelmingly memory chips, and the companies were valued to go to the moon, and then oh, actually not.
The amount of the S&P 500 and Nasdaq that depends on OpenAI and Anthropic printing money faster than the Weimar Republic is not insignificant. The top companies, 28% of the S&P 500 and even more of the daq have a price that is significantly boosted by this. AI goes to shit, Nvidia becomes a graphic card company again, that’s 7% gone. Oracle will probably lose 2/3rds of their value. Microsoft around 1/3rd. So there’s another 2%.
You still have to do the work. The only benefit of an ETF is spreading risk. You like 10 companies, one fails, you still do fine, where if you’d bought that one, you’d be in trouble.
But at current trading commissions, why not own 10-20 stocks?
And the way you beat the market is knowing more. Frankly, most of the people on Wall Street have a vague idea about companies, but don’t really understand them or their products. They leave college and go into a bank. You’re not going to know what “memory unsafe code” means in a press release from Anthropic and whether it’s a big deal or not. So they follow the herd and dump Crowdstrike because that’s what everyone else is doing, and if you don’t know shit, the best way to be safe is to not look like the one crazy fucker in the room.
It’s like going to Vegas and counting cards. The drunk schmuck next to you hoping for a 7 isn’t going to beat the house, but you might. It’s why I don’t buy Estee Lauder or LVMH. What do i know about handbags and makeup? I can’t look at the new Louis Vuitton purse and say that’s a great product that will make money. No idea.
50-odd years ago I was an Investment Analyst and tried to know more about my sector and make better judgements about than the analysts employed by my employers competitors. One of the things I remember that Liz, a female teetotaller actuary was very good as a Brewery analyst because she was not distracted by the quality (or lack of it in the case of “Allied”) of the beer.
I use Robinhood and have no complaints.
Trading 212 but I am a very small and timid investor
I use Ladbrokes. No fees. No tax.
No winnings?
Worst thing about betting duty is that you pay whether you win or lose.
15% betting duty on the stake (rising to 25% next year, unless you’re betting on gee-gees) can easily be more than income tax on your gains.
I use to use IG. Found it very good. You may find the spread betting facility enticing
I assume they’ve got an offshore platform for non-UK people like you and Tim. Otherwise the betting duty will take a chunk out of your stake (and hence out of your winnings).
(the horrendous betting duty system is partly my fault; I set up some of the early Gibraltar online betting operations, which the current rules are trying to counteract)
interactive Investor is the (or on of the) top-rated platforms but I had problems trying to transfer stocks from Equiniti [I strongly suspect that Equiniti was to blame]. My wife uses the Lloyds Bank platform and claims that it works fine.
OTOH if you aren’t good at stock-picking my advice to her (For Avoidance of Doubt this is NOT investment advice) when she inherited some money from her mother was to buy a couple of Investment Trusts – Scottish Mortgage, City of London, and Law Debenture have funded a decade of foreign holidays (and some clothes) and what’s left is valued at more than the initial valuation.
+1 for Interactive Investor. I’ve had an account with them for nearly 20 years with minimal complaints. They offer brokerage for most all of the main stock markets, and gives access to IPOs and such. Automatic dividend reinvestment too. I’m currently paying £14.99/month for a SIPP, ISA and Trading Account.
Can’t speak to Scottish Widows trading platform, but do have my current work pension with them – choice of funds is pretty limited, with a heavy measure of ESG on most things…
I used Schwab til 20 years ago. They pissed me off, so I moved my accounts. After 2 megamergers, Schwab has my accounts again. No complaints now.
I have been in VFINX admiral for decades. I ran an accounting system for a DJIA corporation for many years. I talked with accountants all the time. When discussing investments, many said, “80% of fund managers don’t beat the S&P 500.” I heard it so many times, the light bulb flicked on: invest in S&P 500. So I did. Has worked well for me. Hands off. Buy and hold. Zero involvement.
Sure, but invest in the S&P500 shares yourself, so you get the dividends as well, rather than a tracker fund where you might just get the capital gain.
For what it’s worth, another recommend for Interactive Investor.
Been with them for >decade+
No issues, and a fair & transparent pricing structure. Settlement is usually T+2 for UK/European shares. Funds generally 3/5 Days.
The main consideration is the amount of money you intend on investing. For small amounts (below about £100,000) look at platforms that charge a fee which is a percentage of the amount held (e.g. AJBell). For larger amounts, look at platforms which charge a flat fee (e.g. Interactive Investor).
A decent platform should be able to invest in any major market, but check out the fees in advance.
The US withholding is dealt with by filing form W-8BEN which says you are a foreigner, so the USA only withholds 15%. You’ll have to renew it periodically, but the platform should remind you. You may be able to reclaim some or all of the 15% under a tax treaty.
One major consideration is where you are tax resident. If you use an American platform it’ll keep track of which specific shares in a company you are buying and selling as the tax treatment is different depening on how long you have held a share. For a UK tax resident that is useless as HMRC treats all shares as fungible and you instead need to keep track of the Section 104 pool, which to US taxpayers is no more than an irrelevant curiosity. If you use a platform based where you are tax resident, it may provide helpful summaries each tax year which have done all the calculations and only leave you to fill the numbers in on your tax forms.
Plus the different tax years – a UK-based platform giving you all the information for a year ending on 5th April isn’t going to be much use anywhere else.
Have had good experience with A J Bell so far. Conviction investing has to be the way for someone who’s not a professional and that includes going with an index or an income fund if you are so minded.
This is not advice!
I ‘ve used Hargreaves Lansdown for about a decade, and it works nicely for me. Great app, and they deal with W8-BEN for US stuff, etc.
My best share remains Apple, but they are stingy on divs. I’ve found that miners, particularly Rio Tinto, are much better for income…
DK
HL used to be very good, but are not as competitive now. For example, HL annual charge starts at 0.35%, while AJBell charges 0.25%. Share dealing is £6.95 per deal (£3.95 is 20+ trades last month), against £5 (£3.50 if 10+ trades last month). Small differences, but they all add up.
IB is good according to my portfolio manager (Mrs BiG). If you don’t want leverage you can ignore it, like you can ignore your fridges Internet connection.