I was asked by the Financial Times to share my (financial) New Year’s Resolution with them – besides many other goals, I talk about why 2017 will be year I finally start investing…
My resolution as a 28-year-old is to get started as an investor — I have capital to spare, I don’t need it in the short term and even if interest rates on savings accounts rise, I want to make my money work as hard as possible.
My first task is to find the best platform for a stocks and shares Isa. Finding a cheap one is easy; choosing the right one for my needs is harder. There is a raft of contenders, all with different pricing and charging structures, so I have to know how much I am likely to be investing over time and how often I want to trade.
Most platforms have an annual fee, which could be a flat rate or levied as a percentage of your investments, plus a dealing charge. You will need to weigh up which model is the most cost-effective. The platform charges are on top of the fees that funds themselves charge — but some platforms can give you cheaper access to the most popular funds. And different platforms give you access to different kinds of investments (for example, not all will give you access to shares in individual companies).
And the second part of my resolution? Deciding what to invest in. I’m going to focus on investment trusts for now, because they have a number of good features (an independent board and a genuine long-term focus, to name just two).