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GeorgePizarro

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  1. Compounding forms the crux of successful long term investing. It is how an asset, e.g. a share or bond, generates income which is then reinvested in the same income-generating asset, essentially creating earnings from previous earnings. Think of it as the snowball effect in its finest form. Imagine that a grandparent gives both you and your twin sister £1,000 worth of shares in Golden Goose Group Plc for your 25th birthday. This company’s share price has risen steadily at 6% each year, and it pays an annual cash dividend of 4%. When the first dividend is paid you use the £40 to splash out on a modest trip to a local pizzeria followed by the cinema. Fast forward 40 years and your shares have grown tenfold and are now worth £10,285 as a result of rising 6% each year. Your annual dividend rolls into your bank – a not to be sniffed at £411. Thanks Grandma. However, at an obligatory Christmas gathering you find yourself talking to your sister about how well the Golden Goose investment has been. It transpires that back when Grandma gifted the shares, instead of taking the dividends as cash, your sister opted to have her dividends reinvested. You feel sick to the stomach when she tells you that her shares are now worth £45,259 and her latest dividend was £1,810 And that’s it really. If you multiply a number again and again by a slightly larger percentage, the difference is astonishing. Some investors may need to supplement their income with cash paid out by their investments. But if you’re in a position where you can afford to reinvest those dividends, your wealth over the long run will be substantially greater than if you choose to spend the cash instead. Our Smart Portfolios automatically reinvest dividends whenever they are paid. Some providers charge you for this privilege, we don’t.
  2. Exactly. We have both the regular Share ISA and also a 'Smart Portfolio'. To cater for investors who are looking to accumulate wealth over the long term, we offer a fully flexible Stocks & Shares ISA. However, with IG there are two ways you can invest your £20,000 allowance. If you want to have the freedom to choose your own shares, exchange-traded funds (ETFs) or investment trusts; you can use our Share Dealing platform. You’ll be able to create a unique portfolio and each trade costs just £8, reduced to £5 if you placed just one spread bet or CFD trade in the previous calendar month. Instead, if you are looking for a ready-made portfolio that’s actively managed by industry experts you can use your ISA allowance to invest in an IG Smart Portfolio. These are based on portfolios designed by BlackRock, the largest asset manager in the world. We estimate that the total cost for one of these portfolios is just 0.93% a year, which falls as the size of your portfolio increases and with further discounts available for clients who use our other products. Many of our ISA clients choose to spread their ISA allowance between these two types of accounts, trading their best ideas in our Share Dealing platform whilst having the peace of mind that the core of wealth is being professionally managed at a low cost in an IG Smart Portfolio. The main point of the chart above, which applies like you said to both Stocks and Shares fees, and our managed portfolio fees, is that if you bundle these all up together over the space of 30 years or so (or even less) then you're likely to see a noticeable and tangible effect on your total valuation. Put another way imagine in year 1 you do 10 trades in a share dealing account and with IG this costs you £50. With an alternative provider this could cost somewhere in the region of say, £120. You therefore not only save £70 on that deal alone at the time, but you also have that £70 invested for the long run. If you then take your 5% yearly gain (as an example), over the course of your investment history you're going to be significantly better off - that £70 would have a 4x odd increase on those compound percentage gains. It really is worth looking at
  3. In the world of investing it can be difficult to work out what fees you are actually being charged. Even if you are able to work out all your costs by either trawling through the company’s website or replying on your advisor to be completely transparent, it is near impossible to visualise how these impact the value of your investments over time. Platform fees, management fees, fund costs, FX fees and spread costs all add up. With a traditional wealth manager or independent financial advisor these are likely to exceed 2% a year. The chart below illustrates how small differences in fees can lead to massive divergence in the size value of an investment over time. Here we look at a typical 30-year-old’s pension. During the accumulation phase we have assumed a starting pension pot of £50,000, monthly deposits of £500 and an annual growth rate of 5%. At retirement at the age of 65, the person takes a lump sum equal to 25% of their final pension pot and subsequently takes £35,000 as income each year. IG Smart Portfolios have a tiered fee structure; meaning as your portfolio grows, you pay less. The blended fee for a £50,000 is 0.92%, while on a £250,000 portfolio it falls to 0.68%. Further discounts are given if you use regularly use our other products. More info here. The chart above takes our blended fee into consideration (blue line). Comparing our total cost of investing to a provider that charges 2% (orange line) leads to the following outcomes. Your final pension pot grows to £725,000 based on IG fees, compared to £515,000 with costs of 2% The amount you can take tax-free at retirement would be £53,100 greater, provided you opt to take 25% of the balance In retirement your pension would last 7 years longer; giving you an income of £35,000 until age 84, instead of age 77 if you had paid the higher fees Let's get the discussion going Does anyone have any questions either myself or can help with? Ask below and we'll get back to you as soon as possible to help you get the most out of your investments.
  4. The number of people with Cash ISAs has fallen by 3.8 million since the 2008 financial crisis as more and more people start to realise that keeping their savings in cash gives them a negative real return. This is because the rate of inflation has mostly been above the interest rate paid on Cash ISA accounts during the last decade. It is worth pointing out that if you plan to use cash for intended purchases, or require a buffer for those unfortunate and unexpected outlays, it is likely that holding cash or investing in a very low volatility fund is the sensible thing to do. However If you have a longer term investment horizon (+3 years), the majority of people should look to invest in a diversified portfolio containing a mix of equities, fixed income and alternative investments such as gold. As you can see from the chart below, even if you had been very unlucky and invested just before the 2008 financial crisis; an investment of £20,000 in a balanced portfolio would now be worth around £37,000 today. If you had opted for a Cash ISA, your savings would have grown to just £25,000. If you have any good stats to support this claim or if you disagree please post these below.
  5. The Individual Savings Allowance (ISA) limit will remain at £20,000 for the 18/19 tax year, letting people save tax-free in a range of different ISA accounts. But with so much choice it’s not easy to know which ISA is most appropriate for you. The below gives a good overview of the options available, but if you have any ISA related questions please ask away. At the last count, the Cash ISA was the most widely held amongst UK adults with 8.5 million subscribed. However this number has fallen each year since 2008 partly due to the dismal interest rate that Cash ISAs currently offer. The average rate listed on comparison site MoneySupermarket.com was a meagre 0.8% at the time of writing. Meanwhile the Stocks & Shares ISA has proved more popular, particularly over the last two years while the stock market has boomed. If someone is looking to start accumulating wealth over the long term (3+ years) then a Stocks & Shares ISA will be more appropriate for the majority of people. You can read more about IG's Stocks and Shares ISA here, and if you have any questions, ask below and I'll be on hand to help. More recently the Help-to-Buy ISA became available to budding homeowners. You can open the account with a maximum of £1,200 and then squirrel away up to £200 per month. The government will add a bonus of 25% based on the size of your pot, up to a maximum of £3,000. There’s also the Lifetime ISA that was launched in April 2017, offering the dual possibility of saving towards a first-home or retirement. This offers a potentially larger government bonus than the Help-to-Buy ISA too, but on stricter terms. You can use £4,000 of your £20,000 annual allowance and the government will top up your savings up by 25% each year. However you’ll get a 25% penalty if you choose to withdraw your cash or assets before you buy a home or turn 60 years old. The Innovative Finance ISA can be used for peer-to-peer lending. Although this type of investing isn’t protected by the Financial Services Compensation Scheme, companies operating in this space are regulated by the FCA. If you have any ISA related questions please ask away.
  6. Hi , Please note that IG are still not offering Greek stocks due to the volatility and continuing uncertainty surrounding Greece. Due to this each Greek stock is set to 'Closings Only' which means we are no longer offering the stock and so clients can only close existing positions. We will generally do this if a stock is too small or illiquid. Having taken a look at Piraeus Bank I cannot see these quick vast increases in price that you refer to, however, there have been a few corporate actions on the stock in the last year or two which will explain the large moves on charts, but we aware these pose no material change to the stocks market cap. In regards to your last comment, IG is fortunate that we have a vast number of clients and so we can net off or internalise a lot of client exposure as we will have long and short clients. There are of course times when there are more long or short which leaves IG with an exposure to that market, and so we hedge this exposure in the underlying market to reduce the risk to IG. Hopefully this answers your queries, feel free to ask any further questions. Thanks, Michael
  7. Hi , You are correct, recently a business decision has been made to no longer rollover quarterly share contracts with a spread concession. Instead your position will be closed at the bid/offer (depending if Long or Short) of the current quarterly contract you hold, and at the same time you will be opened in the next quarterly contract at the bid/offer (again depending if Long or Short). As an example: If you hold a long position on a stock in the SEP17 contract and wish to roll this over into the DEC17 the below would happen. SEP17 price: 100 / 101 DEC17 price: 99.5 / 101.5 Your SEP17 position will be closed at a price of 100 and at the same time you will be opened long in the DEC17 at a price of 101.5. To answer your second question, yes, you can roll to a further quarterly contract but you would need to call us to request this. For example, you could roll from SEP17 to MAR18. In terms of the interest cost, our Forward quarterly contracts have interest priced in, this is why you see a wider spread. In order to set automatic rollover instructions all you need to do is go to My IG > Settings > Rollovers. Thanks, MichaelC
  8. Hi , If you're trading a share on a CFD account or a DFB contract on a Spreadbetting account you will pay an overnight funding fee (only if the position is held on the account at 10PM UK time). Please note that quarterly contract shares for Spreadbetting have a wider spread to incorporate interest for the duration of the contract. In order to calculate the overnight funding fee you would use the below calculation: (Size X Price) X (IG admin +/- Interbank rate) / 365 or 360. IG admin fee is 2.5% annually. Interbank rate is the 1 month rate. For UK this is LIBOR, which is currently approx. 0.25163% Please note that if long you will pay LIBOR and if short receive. You will divide by 365 days if UK, South African or Singapore. And 360 days for every other country. As an example, if I was long £10 per point of a UK stock and the closing price was 500p. I would pay the below: (£10pp x 500) X (2.5% + 0.25163%) / 365 = £5000 X 2.75163% / 365 = £0.38 overnight charge (rounded up). Please see the below links for more information. You will need to scroll down the page and select the 'Funding' tab. https://www.ig.com/uk/shares-spread-bet-product-details https://www.ig.com/uk/shares-cfd-product-details Please also note that the position will not be closed on your account realising the profit/loss, the market will simply shut and re-open the following day. If you or anyone else has any more questions let us know! Thanks, MichaelC
  9. Hi , We offer Equity options in our CFD accounts, but please note that these are a phone dealing only product. You can both buy and sell options on a number of markets. For example; US, UK, European. Upon expiry these will always be cash settled and not stock settled. Please see costs below: US: $5 commission per lot, 1 lot = equivalent of 100 shares, minimum size 5 lots (dependent on option premium this can be less). UK: £10 commission per lot, 1 lot = equivalent of 1000 shares, minimum size 1 lot. Hopefully this answers your query! Any furthers queries please don't hesitate to contact us on our dealing line 020 7896 0000. Thanks, Michael
  10. Hi , We're still in the process of creating our new options interface for the new web platform. It will include some new features that both clients have requested and some we believe would be useful. We hope that this will be live nearer the end of the Summer, but no firm date as of yet. Thanks, Michael
  11. Hi , Great idea and can certainly understand the benefits behind clients being able to customise it. At present the Twitter feed in the New Web Platform is set by IG, but we will pass this feedback on for you. Thanks, Michael
  12. Hi , We appreciate your interest in holding this account type with us. Unfortunately, as our clients need a minimum age of 18 in order to hold an account with IG, we cannot offer Junior ISA accounts. Thanks, Michael
  13. Hi , We're sorry for the delay in replying. If you've got a specific account query please direct this via phone or email to the details below. We will then look into this ASAP for you. Phone: 020 7896 0079 Email: helpdesk.uk@ig.com Thanks, Michael
  14. Hi , We've not got this tool on the new platform, however, it is on ProRealTime and provides a far better comparison tool. We would suggest having a look at this! But will of course pass this on as feedback to our IT developers. Hope that helps! Michael
  15. Hi , I'm glad my explanation has answered your query! And no, at present we do not publish these online, but we can give the figures to you via Phone, Email or Live Chat. We are looking into adding these to the platform in the future. Thanks, MichaelC
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