500K to invest, Best way??

2»

Comments

  • jem16 wrote: »
    Why would you suggest that a large sum of money be put into one fund or indeed one sector?

    Even with £7k into a S&S ISA you would be looking to diversify using 7 funds.



    Again you seem to be focusing on everything being in one fund.


    The OP stated that they had £500k to save/invest.

    At no time did I suggest that the OP invests all this money into one fund or sector. I used the expression ''a large sum of money''. £20K is a large sum of money to me!

    I used the S.W.P.L. fund as an example of how returns may not cover required monthly income, therefore leading to loss of capital. E.G. A £20k investment could give 5% of initial investment as income each month (£83.33) but if returns are only 1.1% per month (£18.33) that is not a good situation to be in.

    Unfortunately jem16 you have read things into my post that I didn't actually say.
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    This problem affects people who are investing for income. If they require (say) 5% of the original investment as income each month how will they fare if the return on the investment is only 1.1%? They will immediately be digging into their capital!


    People who want income usually invest in assets which pay dividends or interest.The dividends are paid out independently of what happens to the capital value of the shares The overall return is thus not really relevant in terms of the payment of the income.

    It is quite easy to generate a 5% annual income by investing in a mix of higher yielding blue chip shares, bonds/gilts , property investment trusts and cash where the income will not be affected to any major extent by the capital fluctuations (there is always some risk - but not as much as the fluctuation in interest rates).
    Trying to keep it simple...;)
  • Its been really interesting listening to all of your responses. I should have mentioned this is my first post but i do not want to tie up the money for a long period of time. For example over 6 months is too long. The reason being that i will invest in property when i see the oppurtunity. Hence why i asked about saving schemes. the problem i have is that internet savings account are often limited to a maximum you can put in. Plus with eveything that has happened with northern rock i naturally concerned about placing a large amount of money with one institute. On the flip side i dont really want several accounts all over the place. I would like advice on a solid savings account that i can rely on. I currently have the money in a deposit centre with my bank which is short term and i get an ok return. Are there any other recommendations or ideas that you people may suggest. To be honest i am a novice when it comes to saving accounts and bonds/shares. I have always had all my money tied up in bricks and mortor and it is only now i have the option to save a lump sum. Cheers, really good forum and some good points of view!
  • dunstonh
    dunstonh Posts: 115,904
    Name Dropper First Anniversary Combo Breaker First Post
    Forumite
    Thomas, I think some of the answers to your questions are being based on your investment selection (which leaves a little to be desired - sorry) and your investment knowledge following the comments you made on the other thread about Inv Perp funds and the incorrect return figures you have given for them (as well as being incorrect on this thread too).

    At the end of the day, the OP has suggested that they are not looking at investing but at saving. So, investment discussion is largely irrelevant,
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • jem16
    jem16 Posts: 19,393
    Name Dropper First Post First Anniversary Photogenic
    Forumite

    Unfortunately jem16 you have read things into my post that I didn't actually say.

    My apologies if you feel I have misunderstood but I don't think I have.

    However you said;
    On that basis how could I possibly suggest that the OP puts a large sum of money into a property fund?

    Whether you mean £20k or £500k I was simply pointing out that you would not just use one fund - you would want a spread of funds.

    However back to the OP.

    How about Sainsbury's Internet Saver? It is backed by the Bank of Scotland and the maximum you can pay in is apparently £2m. Interest rate is 6.25%.

    http://www.sainsburysbank.co.uk/savings/sav_internetsaver_is_skip.shtml
  • dunstonh wrote: »
    Thomas, I think some of the answers to your questions are being based on your investment selection (which leaves a little to be desired - sorry) and your investment knowledge following the comments you made on the other thread about Inv Perp funds and the incorrect return figures you have given for them (as well as being incorrect on this thread too).

    At the end of the day, the OP has suggested that they are not looking at investing but at saving. So, investment discussion is largely irrelevant,


    Ouch! dunstonh, your comments are straight to the point but I think they are mostly accurate. My investment selection was recommended to me by two different IFAs in January 2001 & April 2002.

    Yes I did misunderstand, ''Yield: Annual Net Return'' to be the total return on the Invesco Perpetual funds.

    I am not going to post on this thread again, I will leave that to other more experienced investors. I would like to discuss your comments in more detail on the ''Invesco Perpetual'' thread that I started last night. Thanks.
  • Cheers Jem, that savings account does look promising. How do you know its backed by the Bank of Scotland. Would you be happy trusting a Sainsbury saver with such a large amount of money. I guess if backed by Bank of Scotland it would be ok.
    Dont want to change the topic of conversation but what are your thoughts regarding Bradford and Bingely. Are they likely to get into trouble?
  • dunstonh
    dunstonh Posts: 115,904
    Name Dropper First Anniversary Combo Breaker First Post
    Forumite
    Ouch! dunstonh, your comments are straight to the point but I think they are mostly accurate. My investment selection was recommended to me by two different IFAs in January 2001 & April 2002.

    Text has a way of coming across without emotion. Mine especially. Here you go to make it a bit friendlier... :)
    My investment selection was recommended to me by two different IFAs in January 2001 & April 2002.

    2001 with profits wasnt a great decision as the writing was already on the wall for many providers at that point. That said, I made my last WP investments in 2003 and they have been performing in excess of 10% p.a.

    The downfall of with profits didnt happen over night and its easy to apply hindsight. Especially when you consider that we didnt have access to the sort of data and information that exists nowadays back then. So investments tended to be a little more simplistic.

    The Scot Widows property fund 100% did actually work out well for you with your timing. Luck or judgement I dont know. However, a sector allocated spread would have performed better.

    I am not going to post on this thread again, I will leave that to other more experienced investors. I would like to discuss your comments in more detail on the ''Invesco Perpetual'' thread that I started last night. Thanks.

    Dont let it put you off. If you thought those things, then chances are many others did/do as well and if they read this they will benefit from it. All the regs are here to help. I will watch out for your other thread though.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • jamesd
    jamesd Posts: 26,103
    Name Dropper First Post First Anniversary
    Forumite
    mosfet, see the Savings Accounts article.

    The London and Country account paying 6.55% for the first six months then 6.15% seems suitable for your purpose, with a maximum deposit limit of a million Pounds. Annual interest payment, account operated by the Chelsea Building Society.

    I suggest avoiding ICICI for your purpose because of glitches that people occasionally suffer getting money in or out promptly, which is unacceptable when you have property purchase deadlines to meet.

    Not that the deposit guarantee scheme covers only the first 35,000, so you can't avoid splitting into chunks of that much if you want 100% protection. But it is worth noting that no saver lost their capital in the Northern Rock events.
  • jem16
    jem16 Posts: 19,393
    Name Dropper First Post First Anniversary Photogenic
    Forumite
    mosfet wrote: »
    Cheers Jem, that savings account does look promising. How do you know its backed by the Bank of Scotland.

    I have accounts with BOS, Halifax and Sainsbury's. All use the HBOS platfom and transfers between are instantaneous. When I transfer from BOS to Sainsbury's I set it up as a transfer to another bank with us.

    As far as I'm aware it's a joint venture but you might want to check it out to make sure.

    Would you be happy trusting a Sainsbury saver with such a large amount of money. I guess if backed by Bank of Scotland it would be ok.

    I suppose that's the difficult question. Compensation would be limited to £35k.
    Dont want to change the topic of conversation but what are your thoughts regarding Bradford and Bingely. Are they likely to get into trouble?


    Couldn't really say.
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 342.2K Banking & Borrowing
  • 249.8K Reduce Debt & Boost Income
  • 449.3K Spending & Discounts
  • 234.4K Work, Benefits & Business
  • 606.7K Mortgages, Homes & Bills
  • 172.7K Life & Family
  • 247.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards