First time investment in stocks and shares - advice required

chookiembra

jem16 wrote: »

Halifax's investments are particularly poor

Whilst that may be true as an overall observation (generalisation).........

...... you might care to check out the performance of those run directly and indirectly by David Marchant.

B.E.N

Couldn't your relative just move to a bank that's offering a better deal?

E.g. Kaputhing Edge offering 7% (gross).

On 45k @ 1.6% interest, she is earning a miserly £720 per year in interest (£576 after tax)

With Kaputhing Edge @ 7% interest, she could be getting a return of £3, 150 per year in interest (£2,520 after tax).

What I'm essentially saying is that she is paying £1,944 per year to a Shi* bank that is advising her to invest in another of their awful products!

I'd advise her to jump ship now

a7man

Everyone on this site is against stocks and shares (dont know why, I think everyone is madly cautious!). In my opinion, if she is putting it away for a while (5-10yrs +) then S&S is a good way to go.

BUT as everyone has said dont go with Halifax, see an IFA - ideally with their own fund analysts within the firm or external contacts that are fund analysts. This way they will create a v good portfolio & the extra cash spent will lead to higher gains & more money.

I am curious how he came to the decision to 'advise' her to put 25k in a high interest savings account and only 20k in S&S though.

Lokolo

People on here aren't against Stocks and Shares, why do you think that? They have all been suggesting going to see an IFA...

A lot of people on this site do get confused between investing and saving, a lot of people want to invest with no risk - which isn't the case, hence why we then suggest savings accounts.

Plus, you are not allowed to offer advice on here about which shares to buy etc., only offer opinions and factual knowledge (about ISAs etc.etc.).

sabretoothtigger

IFA have their own bias also according to the commission paid out. Asking for advice on investing what sounds like life savings, on an internet forum is just a tad risky.

What I would suggest is to put the majority into high interest savings, its easier enough to compare by yourself or buy a saturday newspaper as its commonly the kind of thing discussed under personal finance

But also invest into shares on a regular purchasing scheme, you could invest in the ftse100 via a tracker but Im not sure thats a greater index to follow long term. The trend is up at the moment though

dunstonh

IFA have their own bias also according to the commission paid out.

There has been no widespread evidence of that despite a number of times it has been looked into. I am sure some may abuse it but majority dont. If you are paranoid about it then pay on fee basis instead and stop whinging about potential perceived bias.

Asking for advice on investing what sounds like life savings, on an internet forum is just a tad risky.

It is.

What I would suggest is to put the majority into high interest savings, its easier enough to compare by yourself or buy a saturday newspaper as its commonly the kind of thing discussed under personal finance

Finance sections on newspapers have some of the worst reputations possible. A fashion investor could do a lot of damage following their generic advice.

But also invest into shares on a regular purchasing scheme, you could invest in the ftse100 via a tracker but Im not sure thats a greater index to follow long term. The trend is up at the moment though

The FTSE 100 tracker is medium/high risk and has been a bottom quarter peformer for most of the last 14 years. Its a very poor index to track as well as the risk not being ideal for a cautious individual.

jem16

chookiembra wrote: »

Whilst that may be true as an overall observation (generalisation).........

A generalisation yes. For the cautious investor though it's very true.

...... you might care to check out the performance of those run directly and indirectly by David Marchant.

So ...

Halifax Fund of Investment Trusts - 14th in its sector over 5 years with +89.7% return ( top was Neptune Global with +177.3%)
Halifax International Fund - 80th in its sector over 5 years with +46.6% return (top as above)
Halifax Japanese - 13th in its sector over 5 years with +28.9% (top was Axa Framlington Japan with +84.9%)

All of these funds are described as Medium/Adventurous risk. I wouldn't descibe any of them as setting the heather on fire but at least better than the cautious Managed Fund.

The normal fund for most cautious investors to be dumped into is Halifax Cautious Managed which managed +4% over 3 years(no figures for 5 years) and was 53rd in its sector. The problem here is that most people going into the Halifax for "advice" would describe themselves as low risk.

Nobody should be forced into investing if they don't want to and savings would suit them better. The problem with HBOS (and probably every other bank) is that the minute you set foot inside the bank to deposit/take out money they want you to have a "fianancial review" and try to persuade everyone to go down the investment route.

If you want to invest see an IFA. If you want to save go to your bank.

sabretoothtigger

An actual IFA, sorry if I offended. I had forgot the pay on fee option, sounds good

The newspaper section I meant is just a summary of the interest rates, etc I think they do this well enough, it is just plain news/information

I didnt mean their share tips, etc and thats high risk anyway. I do find they report what has happened not what will

Im surprised you say the ftse is high risk but the performance has been poor though I think medium term it may be ok. Pacific and Indian funds seem more attractive to me but can only be even more risky though.

Hargreaves landsdown amoung others offer discounts on fund fees which is usefull for a managed fund especially

I think the IFA option as said above is best rather then taking varied personal opinions from this forum, you need to be able to weigh up each idea yourself and if not have someone do this for you who is independent


Its natural people on this site would avoid shares, its not a money saving measure. Its a purchase, a bet. Odds look good to me though

+4% over 3 years

Adjusted for inflation that is a loss of money.

ed123_2

.....due to the credit crunch cash deposit rates are v high compared to the boe base rate ( 5% br compared to top rate 7.2%) this is due to last 2-3 years in my opinion. Historical base rates at 5% would mean a savings rate of 5.3% approx. so in the short term I would favour cash...

dunstonh

An actual IFA, sorry if I offended. I had forgot the pay on fee option, sounds good

You didnt offend. I get to read a lot worse on here at times

The newspaper section I meant is just a summary of the interest rates, etc I think they do this well enough, it is just plain news/information

I didnt mean their share tips, etc and thats high risk anyway. I do find they report what has happened not what will

Good analysis of what tends to be the case. That and fashion investing (picking what is flavour of the month) and totally ignoring risk are common media errors.

Im surprised you say the ftse is high risk but the performance has been poor though I think medium term it may be ok.

By itself it is medium/high. On a scale of 1-10 (cash = 1) then it would come out around 7. It can be utilised in a wide spread of lower risk assets to bring the overall risk down but by itself it is that high. Remember that there are a lot of investment options available between cash and stocks/shares. They tend to fill the lower to medium end of the scale.

The FTSE100 trackers have been poor as the index has very little diversification and is too heavily weighted towards certain industries. It just hasnt been the place to be for 14 or so years. However, that can change but for a limited investment it is not a good place to be.