Saving/investing advice for five figure sum required please

monsieurmonster

I have £70000 in a saving account, which I banked originally with a view to investing in a balanced portfolio.

However, after meeting with an independant FA, the current economic climate really kicked in. I have met them again, and slightly altered the portfolio plan, but I am having second thoughts about that route in general.

I trust the FA's opinion, and am investing for the long term, but am understandably very wary of any stock market activity with everything being so erratic at the moment.

I'm not sure if it wouldn't be a better idea to just play it safe, spread my funds throughout a few more 'guarenteed' savings account, and wait out the current economic meltdown, hopefully at least maintaining the value of my savings against inflation. Then, invest when things have calmed down.

I'm only in my early 30s, so I am aware that any loses I may incur by investing now could have time to recover, so it may be naive not to have a bit of a punt on stocks at the moment. Also, whilst buying low thing is very tempting, I am a novice when it comes to investment, so really don't feel like too much of a gamble.

Would it be best to...

1. Go with the FA's suggestions? (includes some savings account, ISA, Personal Pension Plan, Unit Trust, Investment Bond) - get in while its low
2. Keep it all in savings accounts, but spread? - play it safe
3. Keep most of it in savings accounts but perhaps invest a smaller proportion than I would have done in the FA's suggested investments, so as not to miss out entirely on possible gains? -
4. Just make up my mind because its ultimately up to me anyway!
5. Something else I haven't considered?

No one has a crystal ball I know but I would appreciate people's opinions, thanks...

dunstonh

Those are questions you should be asking the IFA who knows far more about your situation than we do.

Markets fluctuate and any balanced portfolio would include cash, fixed interest, property and equities and you shouldnt be 100% in any one option. How much you place in those assets will depend on your risk profile.

If you are cautious the spread would reflect that. If you are adventurous the spread would reflect that.

CFC

You sound nervous. You should mention to your advisor that you are feeling very risk-averse at the moment.

juicyjude

I am in a similar position. Hope to retire next year and need to find a good home for my money which I inherited from my late mum last year. Currently in savings accounts, seen IFA who suggested Pru-fund but am now very jittery about the market and am thinking atm perhaps to play safe and put it all in savings rather than go for the risk/high yield option. I need a regular monthly income to supplement my husbands pension if he retires as well next year due to redundancy. Difficulty decision

dunstonh

seen IFA who suggested Pru-fund but am now very jittery about the market

Prufund is a good option. Despite the market drops, my prufund investments are up. Future is always unknown. However, you look to times like this when entering into smoothed contracts. Buying them when the markets are high and growing is the worst time.

am thinking atm perhaps to play safe and put it all in savings rather than go for the risk/high yield option. I need a regular monthly income to supplement my husbands pension if he retires as well next year due to redundancy.

That option is guaranteed to lose you money. Inflation will soon erode the capital value. There is no risk free option here. You are just juggling different risks.

monsieurmonster

CFC wrote: »

You sound nervous. You should mention to your advisor that you are feeling very risk-averse at the moment.

thanks dunsonh and CFC, yes I am very worried atm. Think it best to play it safe so I will discuss it with the FA again.

good luck with it juicyjude, big decisions to be made!

juicyjude

Thanks so much dunstonh, given me more food for thought again, you have confirmed what the IFA said to us at the last meeting. It was the week before everything went crazy with the banks. I have a little more confidence now, but this money is stressing me out. I know a lot of people would love the stress, but it is so important to get this right, our future retirment depends on this decision.:beer:

dag_2

I think you also have to consider how much risk you're prepared to take, and how much you really need the money in both the long term and the short term.

For example, if you and/or your partner are quite fit and healthy and have a job and/or a trade that easily covers your bills and which you feel is relatively secure, then you can afford to take much more risk than if you only have a low-paid job, or an insecure job, or no job at all, and are relying on your savings to cover you whilst you study for more qualifications, or recover from ill health, or pay for your retirement, or bring up children.

juicyjude

Well its complicated really. My husband is being made redundant at Christmas and the jobs front with an iminent recession isnt too clever. He has, however, been offered a good package and his pension if he were to start taking it at Christmas is adequate though not madly so. I have inherited a large sum of money off my late mum so I need to invest that money to secure a a comfortable retirement. We have no mortgage and no debt so I suppose we are in not too bad a position. His pension is also a final salary scheme. Lots to think about.