Is it possible to make 4% interest on my savings?

sunnydayinengland wrote: »

Ok. At the moment here is how it is all invested (in percentage terms);

Total = £470k

Cash = 17%

S&S NISA's = 44%

S&S portfolio (non NISA) = 27%

P2P lending = 1%

NS&I savings certificates = 9%

Other cash/shares = 2%

I do have a financial adviser who is very good but just wondered if I should be buying gold/precious metals or bitcoin too (not sure if that is a bit too "out there")?

That's odd, why didn't you ask that question originally, rather than ask about 4% interest on your savings? 4% is not a challenging return from the mix of savings and investments that you already have and you shouldn't need to stray into alternative investments to achieve it.

if i had a good financial advisor on my payroll and i needed financial advise. Well my first stop wouldn't be an internet forum.

if you are happy with 4% returns you don't need unnecessary risk chasing the latest fad. Historically a balanced portfolio has returned 4% plus inflation and above over any lifetime. The 4% rule is what most base their retirement strategies on.

my advice would be learn a bit more about investing so that in a year or so you have the confidence and ability to increase income further by ditching the advisor and taking more of a hands on approach.

sunnydayinengland wrote: »

Ok. Will do. Can you recommend any investment books/websites for laymen investors?

First, you don't necessarily need to "ditch the advisor", educating yourself so that you can have meaningful conversations with the advisor is also a perfectly acceptable, and in some circumstances, more preferable, route.

Second, you can read all the books and websites in the world that you like, but you must also paper-trade at the same time. So you can safely test your understanding of concepts without actually risking any real money.

If you are really serious and want to make sound decisions based on fundamental principles (i.e. based on company financial statements), then the books by Aswath Damodaran are hard to beat. But they are serious tomes, he is a Professor of Finance at a well respected New York university afterall, so you can guess the writing style (although some of his smaller books are written in a lighter manner, obviously more overview than detail in content though). He also runs a very good blog called "Musings on Markets".

Damodaran in particular has written some very good stuff on people's misunderstandings of simple multipliers (e.g. P/E,P/B etc.) and the ways in which abusing these misunderstandings can lead to avoidable investment mistakes (or indeed missed opportunities). Once you're read Damodaran on these topics, you'll recognise how much nonsense is written about these multipliers and how many people have an overdependence on them.

"The Art of Company Valuation" by Nicolas !!!!!!lin (don't know why the MSE censor doesn't like his name ! Its S...C..H..M...I..D..L...I...N) is an alternative to Damodaran if you want something that's not quite as detailed, more of a high-level overview. It also obviously misses some of the best bits of Damodaran such as his discussion on multipliers. But as long as you understand its limitations, its could be good starting point.

Some people cite "The Manual of Ideas" by John Mihaljevic. Its ok, but I personally think there are better books out there to start off with.

I've never read it, but lots of people cite "Intelligent Investor" by Ben Graham as "THE book" to read, I think Warren Buffett called it "the best book on investing ever written" or something like that.

You could also start reading the Financial Times, that will help you get a feel for the markets and how various corporate activities (as well as macro and regional events) can affect their share price.

As for websites, well, there are a lot of financial websites that write a lot of bull. Personally I would stick to the basics and avoid websites that may "colour your view". Things like FT, Bloomberg, Reuters, Morningstar,Trustnet websites are what I'd call "basics". Motley Fool and sites of that ilk is what I'd call "colour your view" and well worth avoiding.

Finviz can be fun to play with as long as you recognise its limitations and you don't misuse it.

Just remember, whatever anyone tells you, there is no silver bullet, there is no website or book that will give you the magic answer to success. You only achieve that by following the five P's ..... Prior Practice Prevents P* Poor Performance. Hence my reference to a decent period of paper trading (minimum 12 months, preferably minimum 24 months really, just to give the chance for a few corporate actions to hit ).