c. £100k funds, Investment Advice
Comments
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Hi there,
I recently posted in the 'Property' section of the forum (unable to link as I'm a new member), and was essentially advised to come here to ask for more general investment advice.
Basically, I'm graduating university in July and have £90,000 to invest, I'll be living with my brother all expenses paid and, fortunately, am also in a situation where I don't need a regular job. Also, buying my own property outright isn't necessary or needed right now, I'd really like to invest all £90k in a bid to return as much as possible, with minimal risk (naturally!).
My question, then, is really quite general: how should I invest this £90k to see the best returns?
Initially, I thought property would make sense as my brother currently owns two properties he lets out, however having had my wild price estimations (see in the original thread) debunked by those who know what they're talking about, I've begun to think more broadly about where to invest.
I'm really not very educated in business, finance and investment, and so I apologise if what I say/suggest is blatantly wrong, or if my figures are wildly inaccurate, but I'm keen to make this money grow.
I have read briefly about REITs, and with them being in the property sector, I thought they could be quite good?
All advice welcome, thanks.
The other way to approach the question is what is the goal of investing/saving??
If you are just getting out of Uni and not needing a regular job urgently, that's pretty lucky and might indicate some reliance of family members. It might be you might be finding your way around for sometime. How long can you do that before you might have to dip into your own savings??
An emergency fund will be a start to self insure yourself in the short term.
Then if consider if you need to use it to provide an income for yourself now or for the future and how far into the future you need it? Most investment tend to grow in value over longer terms (>5 years) and if you are planning for more the future (retirement, house etc), it would be worth considering more risky investments appropriate for the period of time you want to invest.
If you want the 'best' returns, starting a business, investing in yourself or providing some value that you can sell to others is potentially the better way to achieve a 'best' return.
If not, average returns via index trackers might just be good enough and sometimes good enough is good enough.
Save 12K in 2020 # 38 £0/£20,0000 -
I don't see a problem in splitting an investment between 2 different passive multi asset funds. Forinstance Vanguard LifeStrategy and HSBC Global Strategy have a different mix of funds and weightings. In my opinion its better not to put it all, especially a large investment like £90k, into the one fund.
If the OP wants to get a specific asset allocation that can be done with 2, 3, 4 etc funds. But if they are ok with the asset mix of say VLS80 there's no problem with putting £90k in that single fund. For less volatility (but more interest rate risk) then go with a higher percentage of bonds or add some bond index funds. The play pen is very large, but £90k in something like VLS80 is very diversified already.......“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
I like the VLS products and agree they are very diversified. I just don't like having all my eggs in the one basket, especially when the FSCS limit for individual fund houses is £50k.bostonerimus wrote: »If the OP wants to get a specific asset allocation that can be done with 2, 3, 4 etc funds. But if they are ok with the asset mix of say VLS80 there's no problem with putting £90k in that single fund. For less volatility (but more interest rate risk) then go with a higher percentage of bonds or add some bond index funds. The play pen is very large, but £90k in something like VLS80 is very diversified already.......0 -
I like the VLS products and agree they are very diversified. I just don't like having all my eggs in the one basket, especially when the FSCS limit for individual fund houses is £50k.
Vanguard's structure means that it can't go bust. It's a "mutual company" where the company is owned by the funds.....which are owned by the shareholders.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
bostonerimus wrote: »Vanguard's structure means that it can't go bust. It's a "mutual company" where the company is owned by the funds.....which are owned by the shareholders.
Why cant a "mutual company" go bust? Mutual building societies in the UK have gone bust. In any case you are talking about the US company. According to Companies House, Vanguard Investments UK limited is a private limited company.
A better answer is the investments arent owned by the company and so cant be used to pay its debts. The investments remain the property of the unit holders no matter what happens to the company.0 -
Thanks Linton. Although I appreciate it is very unlikely, I thought there was a slight possibility of losing your investment and having to claim through the FSCS if there was a major fraud in a fund house?Why cant a "mutual company" go bust? Mutual building societies in the UK have gone bust. In any case you are talking about the US company. According to Companies House, Vanguard Investments UK limited is a private limited company.
A better answer is the investments arent owned by the company and so cant be used to pay its debts. The investments remain the property of the unit holders no matter what happens to the company.
Do you think there is any downside to someone splitting their investment between 2 passive multi asset passive funds like VLS and HSBC Global Strategy?0 -
Surely the question is - what is the upside?
If someone marketed a fund that was some sort of coincidental blend of VLS/HSBC would you say - that's exactly the fund I want in preference to either of those other two? I doubt it0 -
The upsides to me seem to be:Surely the question is - what is the upside?
If someone marketed a fund that was some sort of coincidental blend of VLS/HSBC would you say - that's exactly the fund I want in preference to either of those other two? I doubt it- Not all eggs are in the one basket - if someone had forinstance £200k to invest it seems a lot to put into one fund/fundhouse.
- As some different indexes (e.g. HSBC Global Strategy includes a property index) it maybe makes the overall investment a bit more diverse, or does it - that is what I'm trying to establish from you and other more experienced investors than me.
- The HSBC fund has some active management in that asset allocations are not so rigid as I understand it, so as to keep within the risk profile. This may be a good thing in a falling global market - I think that is the intention.
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If you think about it most working people have their pension, perhaps several hundreds of thousands of pounds, with a single provider. Do you think you are suffering from paralysis by analysis?0
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Fair point. If however someone did choose to have two slightly different multi asset funds - like VLS and HSBC - would it make a portfolio more diverse or do you think it would in some way negatively affect the portfolio as regards total return?If you think about it most working people have their pension, perhaps several hundreds of thousands of pounds, with a single provider. Do you think you are suffering from paralysis by analysis?0
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