Funds - worth it over 5 yrs?

zippeh_2

Hi All,

I intend to move house in the next 3-5 yrs and to facilitate this I'd like to make sure i'm adopting the right approach to savings over this period.

I have around 1k per month to save / invest. However i'm not sure whether to get started on setting up a S&S ISA or simply to just 'save' the cash.


Welcome all opinions.. thanks

dunstonh

3-5 years should really only be considered if you have a higher risk profile. 5-10 is the general considered minimum and thats with single contributions. With monthly, it is closer to 10-15 as minimum (your early contributions may get away with it but your later ones may only have a year invested).

zippeh_2

thanks for replying dunstonh.

That has pretty much made my mind up, I have too short a timeframe to consider investing via monthly contributions, therefore savings it is.


Many Thanks.

bendix

Why not do both? Hedge your bets a bit. Save £500 a month in cash and put the balance in some managed funds each month . . .maybe £300 in shares and £200 in bonds.

zippeh_2

Now I like the sound of that idea, thanks.

zippeh_2

I've had a think. I’m going to stuff the remaining £500pcm in a couple of funds - a global equities one and a global bonds one (£300 and £200 respectively) and see how things play out over the next 3 – 5 years.

jon3001

Any reason why you're considering global bonds over GBP bonds? You need to be aware that with global bonds you'll be taking on an extra risk due to the currency exposure.

If sterling rises in the meantime then the value of those investments will go down.

zippeh_2

After doing a bit of research i've altered my plan a little. I've decided to invest £600pcm split equally between Invesco Perpetual Income (Acc), Jupiter Corporate Bond and Neptune Global Equity (Acc) as a starter for ten.

I'll then save the remaining £400pcm into a cash savings account (already have an ING account currently at 3%).

Jonbvn

zippeh wrote: »

I'll then save the remaining £400pcm into a cash savings account (already have an ING account currently at 3%).

Have you considered a regular saver for this?

zippeh_2

Hi Jonbvn,

Yes I had however I 'may' need to dip into this every so often (although not reguarly) and most of the regular savers I've seen seem to be fire and forget for a year until maturity and dont allow withdrawls.

I was tempted by the £500pcm Halifax one and also the 8% reg saver of HSBC. Infact, on your suggestion I may choose to go for the 8% deal at £250pcm and use the ING account for the remaining £150.

Oh, thanks also for the info on Global bonds vs GBP bonds. Didnt fully understand it first but i've since researched further and now think I do.