KLE 45: The Bridge To Investing

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  • July 23, 2010

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This KLE will be one small step towards reaching your Number, but it will represent one giant step towards changing your investing mindset, especially if you have never really invested before.

Even if you’ve never invested in anything other than a haircut until now, by the time you finish this (and the next) KLE, you will be more sophisticated than (and outperform) 90% of investors and 75% of fund managers.

Really.

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When should you buy?!

I’ll tell you in the next KLE; in the meantime:

Task 1: Investigate online brokerages in your market and join one today!

Task 2: Investigate stocks that track indexes in your marketplace (or, decide if you can/will buy SPY); do not buy it, yet!

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Name and State (eg John, FL)
What Online Brokerage Will You Join?
Which Index Will You Buy? (Please List the Exchange and Stock Symbol e.g. NYSE:SPY)

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July 23rd, 2010
9 Responses
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Comment Number:
1
Written by:
dnsolo
Posted on:
August 6, 2010 at 5:15 am

Hi Adrian,
I need your feedback on something. I telephoned my UK Stockbroker (Barclays) and they said I am not permitted to buy/sell a SPY Index Fund inside my tax free account (ISA). They said I’ll need to use a normal stock broking account. Although I do have one of these accounts I am not keen on using it because all of my gains will be subject to UK capital gains tax. I’m very surprised that my broker won’t allow me to use an ISA in this way, there’s seem no logical reason why they shouldn’t. Please could you share your thoughts on this, thanks.

Comment Number:
2
Written by:
AJC
Posted on:
August 7, 2010 at 2:10 am

I believe it should be doable; I’m trying to get further info from my UK broker, but you may want to ask other members via the forum as well.

Comment Number:
3
Written by:
dnsolo
Posted on:
August 7, 2010 at 2:37 am

Hi Adrian,
My UK broker emailed me their reply below, it doesn’t look good!
—
ISA eligible stocks with Barclay Stockbrokers are stocks listed on the LSE, IRS and some AIM listed stock. Therefore the tracker would not be ISA eligible as it is listed on the New York Stock Exchange. I’m sorry if this is disappointing news.

Comment Number:
4
Written by:
AJC
Posted on:
August 7, 2010 at 7:17 am

Sounds like that may be a Barclays issue … can you move your ISA to another broker? If so, it may be worth checking around?

Comment Number:
5
Written by:
dnsolo
Posted on:
August 7, 2010 at 9:05 am

Hi Adrian,

Barclays (UK) do allow ISA account holders to invest in ‘Exchange Traded Funds’, so maybe I could use these instead? The S&P500 ETF info can be viewed here:

http://eu.ishares.com/download/pdf/false/publish/repository/documents/dffs_comit/dub/CURRENT/PDF/FFS_EQ_IUSA_IE0031442068_GB_en.pdf

Comment Number:
6
Written by:
AJC
Posted on:
August 7, 2010 at 5:46 pm

Depending upon any minimum investment/divestment requirements and any entry/exit transaction costs, you could ‘paper trade’ SPY (i.e. to do the calculations and make your buy/sell decisions) BUT actually be trading any other product that tracks the same index.

This even works with buying into actual index funds (eg Vanguard’s) if you prefer to buy to stockpile/hold (still using the 3 buy signals to decide when to buy more) rather than trading using the graphs.

Comment Number:
7
Written by:
dnsolo
Posted on:
August 12, 2010 at 6:32 am

Hi Adrian,

A quick update…this morning I sold all of my currently held UK shares (in my Self Invested Personal Pension (SIPP) fund) and purchased some S&P500 ETF Index Tracker shares instead.

I also did the same thing for my tax free ISA investments.

I’ll keep an eye on those 3 Buy signals you mentioned and switch back to holding cash if things change.

Comment Number:
8
Written by:
dnsolo
Posted on:
August 13, 2010 at 12:31 am

Also, the ‘ticker’ code for the ‘S&P 500 ETF’ that I bought into was: IUSA

Comment Number:
9
Written by:
AJC
Posted on:
August 13, 2010 at 4:27 am

@ dnsolo – a man of action! Win or lose on this, action will progress you towards your goals much faster than inaction … good luck and keep us posted!