A nice to decision to make

Woodster71

I find myself in a great position in that my OH's father has just paid off the mortgage and I now have £500 per month to save and frankly I need some advice please
i am up to my cash Isa limit and I am looking for something which has medium risk and I won't want to access the money for a couple of years at least. I have read about allsorts of products inc Corp Bond funds etc. However i would appreciate some thoughts on products to avoid as much as products to think about.
Should I be thinking about maxing the Shares side of my Isa as i have no money in this at the moment
All feedback welcome




Many Thanks

Richard_Cocks

I'd check out a fund supermarket, it's the cheapest way to invest money. There are corp bond funds out there, which will help spread risk rather than the very risky approach of investing in a single bond.

Don't lump all your money in one place though, so continue to invest in cash, as well as funds in more than one type of area.

Remember though, outside of cash there is no guarantee on capital, the value may go down as well as up

DiscoPaul_2

Personally.. I would wait while the housing market continues to fall. Save for a deposit. Then buy when it's around the bottom, and let it.

Doomcow

it cant have that much further to fall...

Robert_Sterling_3

Richard_Cocks wrote: »

Remember though, outside of cash there is no guarantee on capital, the value may go down as well as up

The value of cash also goes down due to inflation.

There are no guarantees.

gozomark

Doomcow wrote: »

it cant have that much further to fall...

probably only another 10-20%

soulsaver

gozomark wrote: »

probably only another 10-20%

Or so......

Rafter

Some sort of index tracker ISA would seem to fit your requirement.

Because you will be investing regularly, even if markets fall in the short term you will still be very unlucky to lose capital and not make better returns than your cash isas in the medium term.

You should also think about pension arrangements. If the mortgage is paid the next focus might be your financial security when you retire and locking up some of this money in a low fee pension plan might be more tax efficient.

Looks like you won't have enough ISA capacity to accommodate the £500 a month either?

R.

Aegis

With a potential timescale of 2 years you might want to consider what you're buying into here. There's still a chance that in 2 years time your total investment will be worth less than if you had dripped into a regular saver in the first year followed by a new regular saver and a fixed account for a year.

However, if you are determined to invest and are looking for 2 years or so, you would probably be fine investing outside an ISA for some or all of the funds. If you are a higher rate taxpayer, then choose some income funds for the ISA wrapper and some growth funds for outside to maximise the tax relief. If you are a basic rate taxpayer it is less important, but you might as well use the ISA allowance in case you decide to continue investing to the point where capital gains tax or higher rate income tax. apply. If you are looking for longer term investments, then a little more consideration as to what you put where is probably warranted.

I would suggest looking around and diversifying across a number of sectors and asset classes. My £250 a month investment is currently going in to 5 different funds, and I would also suggest allocating at least 1 fund for each £100 or so that you are putting away, as that will allow you to spread across at least 5 different sectors if you choose the funds carefully.

Whether you go for trackers or managed funds seems to be a matter of personal choice, but as a general guideline it's fairly safe to say that you should try to avoid funds that are actively managed by banks rather than investment houses. They tend to be awful.

Look around on citywire.co.uk and trustnet.com for some inspiration if you get bored enough, and don't forget to seek advice, possibly even from a professional.