ISAs stocks and shares are great products that allow virtually anyone to invest without passing on their profits to HMRC.
Therefore, if you've not opened one of these tax-efficient wrappers yet, now could be the time to take advantage of this unique opportunity.
Nonetheless, it can be a challenge to determine where to invest your hard-earned money, particularly because of the variety of assets that can be purchased at an ISA. So keeping things simple and setting up a regular investment in the FTSE 250 may be best.
Keep things simple
There are more than 2,000 publicly listed firms and thousands of investment funds in the UK. Choosing the right stocks and funds can be an arduous and time-consuming operation. Moreover, there is no guarantee that the right investments will be selected.
As such, a great alternative might be to purchase a low-cost FTSE 250 tracker portfolio.
While the outlook for the FTSE 250 may not be certain in the short term, the index has produced some extremely attractive returns over the long term. The FTSE 250 has produced an average annual return of 12 per cent for investors since its inception three decades ago.
This implies that the index can produce long-term double-digit returns. The FTSE 250 provides diversification across multiple sectors, industries and countries as opposed to single stocks. Such diversification reduces the risk of making an investment error which could hold back long-term returns.
Nevertheless, it is hard to predict the course of the index in the immediate future, as described above. Hence daily investment is a great way to capitalise on the stock market's cyclical nature.
Regular purchases help smooth out market volatility, and you can take advantage of falling stock markets by setting a clear monthly contribution, purchasing more when the market gets cheaper, and less when stocks look overvalued.
Nearly every online broker has a monthly investment plan beginning at as little as £ 10 a month. Such plans allow you to set up direct debit and monthly investment orders, with no additional effort on your part necessary.
A monthly investment in an index tracker fund could be a fantastic way of cost-effectively capitalising on the long-term investment success of the FTSE 250, without requiring too much of your time.
At current levels some FTSE 250 shares still appear to offer interest. But, as described above, if you get it wrong, the process of picking shares can be time-consuming and costly. To begin with, it might be better to focus your attention on the index as a whole, and the transition over time to single stocks.
Starting your ISA Stocks and Shares travel with a tracker fund and regular monthly £ 500 investment could be a great way to kick-start your investments and expand your ISA for years to come at a fast pace.
Shadrach is a Trending Journalist. His first job was as a newsreader and journalist at an award winning magazine. He spends most of his time scouring the internet for the hottest topics to share with his readers.