Great Hunt: Are you interested in investing your money?

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  • batrachophagus
    batrachophagus Posts: 45 Forumite
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    PathMan wrote: »
    On the face of it, this looks like a good investment (23.3% growth over two years). It's about 12% growth per annum, and if you could expect the same year after year I am sure you would be quite happy. My experience is even better, and I have one favourite fund which has averaged over 20% growth year on year since 2013 (Fundsmith Equity).
    Open a stocks & shares ISA with iWeb (a one-off cost of £25 and no annual fees, with a £5 trading charge), put your money on this one and see the investment GROW!
    :beer:


    I can beat that. One of my funds has a CAGR (compound annual growth rate) of 26%. The point is another has a CAGR of 4%, and I was equally excited about both of them when I invested. Don't put all your eggs in one basket.
  • skybluearmyontour
    skybluearmyontour Posts: 270 Forumite
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    My worst performing account is currently my Virgin easy access ISA at 1.01% - circa 3k balance. I keep reading bits about Stocks & Shares ISAs but I simply can't get my head around it and end up backing away. I rarely pay into the account - as I max out my regular savers and matched pension contributions etc. So would look to invest the lump sum in one go and let it (hopefully grow) - I wouldn't want to put more money in...

    So yes - I am interested - but I'm yet to come across anything that suits my simple mind!
  • Hodor1
    Hodor1 Posts: 7 Forumite
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    I started investing in the stock market (excluding pensions) a little over a year ago and the returns have been good in that time (20-25%). Since I paid off my mortgage last year I have a lot of disposable income and my attitude to risk as changed. I plan to make full use of my S&S ISA allowance this year.
    I’m also sticking my toe in the water of peer-to-peer lending, however I do feel slightly uneasy at the level of risk to reward. i.e. not enough reward for the amount of risk
    The risk of investing in the stock market is really down to time frame and what you plan to do with and how quick you need to gain access to the money tied up in those investments.
    Now I look at the risk of cash savings in two ways. The first is inflation eating away at the value and the second is hassle, do I want to be opening and moving money around for the sake of 1 or 2% interest on my savings.
    Anyone looking to start investing in the stock market should ask themselves one question. If a global recession occurred tomorrow and your investments dropped 30% what would you do? The answer to that should tell you if investing in the stock market is for you.
  • dk2401
    dk2401 Posts: 40 Forumite
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    elephantrosie wrote: »
    ive always wanted to be a full time investor, but i like my day job and have invested too much time and money on it. been holding off investment for a looong looong loong time.
    If you have a little money spare that you can tie up for at least 5 years then why not START NOW!
    Maybe see my post (34) above for some pointers...
  • dk2401
    dk2401 Posts: 40 Forumite
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    XChrisJD wrote: »
    Thank you eskbanker - my eyesight obviously wants checking! The correct figure is obviously Equities at 53%.
    Although we have only been with this fund for 3 years, we were with 2 different funds for the previous 10 years & started with considerably less than the figure I mentioned.
    This forum is about opinions & experiences of investing - which is all I have done. I think dk2401 has given probably the best advice I have seen for people thinking of investing.
    Thanks XChrisJD!
    Good luck with your investments and remember to keep diversified and the costs low!
  • dk2401
    dk2401 Posts: 40 Forumite
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    JohnRo wrote: »
    Points 6 & 7 are debatable, if you have a lump sum and a long term investment horizon, which you should always have, then investing as much as you can, as early as you can, for as long as you can, has been shown to be the better option in most cases.

    Drip feeding an investment, when a lump sum is available, has far more to do with the psychology of fearing 'losses' than anything related to investment science or best practice.
    Thanks for your reply.

    I'd agree with you about the odds probably favouring the immediate investment of a lump sum; however this also increases the risk of a lower return should the markets decline significantly shortly after this investment. This may also then scare the bejesus out of new investors who may panic and sell-out at a loss.

    Pound-cost averaging (point 7) is a well-recognised way of 'smoothing out the bumps' whilst investing without trying to time the market, which is (whatever the fund management industry say) extremely difficult in practice.

    Also, for many new younger investors (who may not have a significant lump sum) 'drip-feeding' provides an immediate way into investing, when compounding growth over the long term should then help them produce a good return.

    But whether folks invest via lump sums or drip-feeding (or a combination of both), I think the vital thing is to get people investing as soon as possible.

    Good luck with your investing! :)
  • dk2401
    dk2401 Posts: 40 Forumite
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    skybluearmyontour wrote: »
    My worst performing account is currently my Virgin easy access ISA at 1.01% - circa 3k balance. I keep reading bits about Stocks & Shares ISAs but I simply can't get my head around it and end up backing away. I rarely pay into the account - as I max out my regular savers and matched pension contributions etc. So would look to invest the lump sum in one go and let it (hopefully grow) - I wouldn't want to put more money in...

    So yes - I am interested - but I'm yet to come across anything that suits my simple mind!
    I think simple minds and investing go really well together as investing doesn't have to be complicated!

    This link might interest you - http://monevator.com/category/investing/passive-investing-investing/

    Good luck! :)
  • BananaRepublic
    BananaRepublic Posts: 2,103 Forumite
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    dk2401 wrote: »
    Thanks for your reply.
    Pound-cost averaging (point 7) is a well-recognised way of 'smoothing out the bumps' whilst investing without trying to time the market, which is (whatever the fund management industry say) extremely difficult in practice.

    I believe that research has shown that in general it is better to invest a lump sum immediately rather than drip feed it in to the market over the course of 6 months or a year. Thus time in the market is important. If however you have a regular sum each month to invest, it is better to invest each sum as it arrives, rather than saving it up for 6 months or a year, and then investing it. Again, time in the market is what counts. This I think is the point the other poster was making.
  • dk2401
    dk2401 Posts: 40 Forumite
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    BananaRepublic wrote: »
    I believe that research has shown that in general it is better to invest a lump sum immediately rather than drip feed it in to the market over the course of 6 months or a year. Thus time in the market is important. If however you have a regular sum each month to invest, it is better to invest each sum as it arrives, rather than saving it up for 6 months or a year, and then investing it. Again, time in the market is what counts. This I think is the point the other poster was making.
    Yes, and it's a point I agree with in my last post (47).
  • Marine_life
    Marine_life Posts: 1,059 Forumite
    Hung up my suit!
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    There are three important things:

    1. Diversify
    2. Diversify
    3. Diversify
    Money won't buy you happiness....but I have never been in a situation where more money made things worse!
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