Safe investments!!!!!!!!!

Pobby

About 5 weeks ago I converted most of my savings to cash.Now I have approx.£100k to invest but I am looking for a pretty safe investment as this amount constitutes some of my retirement funding in 8 years time..I am maxed out on isas so i wonder if any of you good folks could give me some idea where to look.Thanks in advance.

EdInvestor

Pobby wrote:

About 5 weeks ago I converted most of my savings to cash.

Do you mind if I ask what the money was invested in before?

Views on what is "pretty safe" can vary quite a lot

Pobby

The money was invested in tracking funds on the stock market.My attitude to risk is very cautious.Thanks for your time Ed.

dunstonh

Pobby wrote:

The money was invested in tracking funds on the stock market.My attitude to risk is very cautious.Thanks for your time Ed.

OOPs. tracking funds being medium/high risk and not at all in line with cautious. That is unless they formed part of an overall cautious portfolio.

There are a number of capital secure or investment with different levels of guarantees available. Which would be would depend on what you are looking for in an investment and what you class as cautious.

Pobby

Yes dunstonh,you are right about tracking funds but being unsavvy at the time that`s where I was advised to go.In fact I came out of it OK.Cautious I guess in my case is that I cannot afford to loose any capital.

margaretclare

Hi Pobby

I don't think that ANY investments are 'safe'. Investing is different from saving. With saving you don't expect to lose the amount you put in, you expect to gain interest but not to lose the capital. With investment, it's different. They really mean it when they say 'your investments can go down as well as up' and 'you could lose whatever you put in'.

Having said that, the returns are better. Tracking funds can work OK but they are not the only thing. As they say on here, do your own research and no one looks after your money like you do!

Best wishes

Margaret Clare

EdInvestor

Pobby wrote:

Cautious I guess in my case is that I cannot afford to lose any capital.

That's not cautious, it's risk averse.If you can't afford to lose any capital you must stick to saving accounts.

But why don't you tell us more about your overall financial planning for retirement and what other resources you have - pensions, property, lump sums coming up etc.

The world doesn't come to a juddering halt when you retire, you keep on living for another 25 or 30 years, so that means you have up to another 40 years from now to look at - not 8 . :eek:

Considered from that point of view and also considering the effect of inflation on cash ( at current rates it halves in value over 20 years) you may consider it sensible to take a *bit* of risk with *some* of your money in order to get a growing income as you get older.

Try playing around with this American calculator to give an idea what a suitable asset allocation might be for you.

Report back what it says and then we can adjust it a bit for UK conditions.

GerardL

I'm one for having some fun money invested, so I'd go for £30K in premium bonds. Tax free, you'll probably outperform inflation and you never know when one of the bigger prizes could head your way.

Pobby

Large cap stock 20% $24,600
Mid cap stock 9% $11,070
Small cap stock 6% $7,380
Foreign stock 11% $13,530
Bonds 20% $24,600
Municipal bonds 0% $0
Cash 34% $41,820
I used the calculator and this is the result based on £120,000 of savings,on going savings £8,500 per year,low tolerance to risk.
As to other details,beside the £100k savings there is a further sum in the bank of £20k.House is paid for,we have no loans or credit cards.
We both have full N.I stamps so will both qualify for the full basic state pension.Private/old company pensions will be worth approx.£6k a year between the 2 of us.

dunstonh

Its a pretty awful asset spread for a UK investor with low risk characteristics. I really cannot see how that sector allocation calculator is any use for UK investors.

Pobby

Duntonh,thanks for posting.Frankly that asset spread means double dutch to me.I mean,are they asking me to invest in headware!---lol