To Invest n property or stock market???

Lochlassie

Hi, Just looking for some advice. Would it be best to invest in a property or a savings account in todays economic climate. I have just inherited around 50k

delmar39

That's a blunt and to the point question given that you've got £50k to invest! Not sure this is the right place to put this thread, however.....I've only dabbled with stocks and shares index trackers and as things stand the stock market is at 5100 ish and has been around this level for a while now. If you were to go in now it may climb to say 6000+ which means you'll make a gain of some sort. Property prices are low and rising albeit not greatly, so perhaps now would be the right time to invest. All depends on your circumstances.

phlash

delmar :

How can you give that advice when the OP has given no time frame?

And frankly, the FTSE is more likely to touch 4000 before it touches 6000 again in the near term.

OP: The question is so open that it is impossible to answer appropriately.

But if you want property (and I'm bearish btw), I know of investments that could get you 17+% pa on the £50,000. Based on rental yields of 9%. PM me if you are interested.

PS. That is based on rental profits, and does not include an analysis of any capital gains or indeed losses! But since these are not realised until a sale of the property, and because I believe it is wrong to include it in any project appraisal apart from in the risk analysis, I have not included the influence of this in any potential financial return figures stated above.

keith969

OP needs to specify what sort of risk they are prepared to take. Personally with inflation likely to rise in the not-too-distant future, I'd take a look at index linked gilts.

delmar39

phlash wrote: »

delmar :

How can you give that advice when the OP has given no time frame?

And frankly, the FTSE is more likely to touch 4000 before it touches 6000 again in the near term.

OP: The question is so open that it is impossible to answer appropriately.

But if you want property (and I'm bearish btw), I know of investments that could get you 17+% pa on the £50,000. Based on rental yields of 9%. PM me if you are interested.

PS. That is based on rental profits, and does not include an analysis of any capital gains or indeed losses! But since these are not realised until a sale of the property, and because I believe it is wrong to include it in any project appraisal apart from in the risk analysis, I have not included the influence of this in any potential financial return figures stated above.

Phlash I wasn't giving advice, simply giving my views based on the very limited info given. I didn't say that the stock market would get up to 6000, I was simply making the point that even if it did perhaps the gains wouldn't be worth it compared to if it was at 3500 or 4000. Not something you can predict for sure I'm afraid, hence the level or risk involved.

You talk about timeframes.....by mentioning investment in the original post I worked off the presumption that this was a long term venture and anyone going into either property or stocks and shares should be looking at the long term.

Finally, it's not for you to refute the info in my post - that's for the original poster to do...!

pie81

Loads more info needed. For example:

- do you own a property already, so any property you bought would be a buy to let?
- when would/might you need the money back?
- what other savings/emergency fund/pension arrangements do you have?
- do you have debts?

The usual advice I would give with any lump of money is:

(1) pay off debt first (incl mortgage) as the interest rates are probably going to be higher on the debt than you can earn from investing
(2) put as much as you can into an ISA where its earnings will be tax free (but only for as long as you leave it there)
(3) if you don't already own your own home, then consider buying a place, since any capital gain on your home will be tax free. However this only makes sense if you have enough income to get and support a mortgage, and if you can afford to buy a place where you're likely to stay for a good few years (4+ years) - and indeed if you are at the right stage of life to do so. Also only works if you can afford for the money to be tied up.
(4) if you don't already have decent pension arrangements, start one and pay at least some of the money into that. Again because of the tax benefits. Again only if you can afford for the money to be tied up.

Savings accounts come fairly far down the list since they pay very low rates of interest at the moment. Really they are for using if you might need access to the money at short notice.

On the other hand a second property is also not a great prospect at the moment IMO, you won't get the CGT break that your first home gets, it's a hassle, and the rent often barely covers the costs.

If you already have your own home, mortgage paid off, ISAs filled up, pension arrangements in place... then you're doing pretty well and probably don't need our advice!

phlash

delmar39 wrote: »

Phlash I wasn't giving advice, simply giving my views based on the very limited info given. I didn't say that the stock market would get up to 6000, I was simply making the point that even if it did perhaps the gains wouldn't be worth it compared to if it was at 3500 or 4000. Not something you can predict for sure I'm afraid, hence the level or risk involved.

You talk about timeframes.....by mentioning investment in the original post I worked off the presumption that this was a long term venture and anyone going into either property or stocks and shares should be looking at the long term.

Finally, it's not for you to refute the info in my post - that's for the original poster to do...!

Tosh - if you post on a public forum, it is open for public debate. I will refute, and continue to do so, any post that I see fit. That is more in the moneysavingexpert spirit than choosing to ignore.

If you make an assumption in your reply, it is useful for the OP to have the caveat in place on your original message, long winded I know, but saves confusion.

If your point was one about limited return left in the FTSE, then it could have been made clearer.

Delmar, before this escalates somewhere never intended, I concede the fact your post is in a similar light to my own, in terms of needing more info from the OP.

Fire_Fox

Another troll thread?

poppysarah

invest?

How much and why do you want to invest?
Who told you houses were an "investment"?

Lochlassie

I'm sorry you all thought my post was a big vague. This is my first time on this forum.

I have a property at the moment and have no mortgage on it. No debts. I was perhaps thinking of buying a little holiday flat just to make use of the £50k, enjoying it and also perhaps gaining on it too. I was just looking for an opinion on such a move. Is this a sensible move or would it be best invested in something else?

delmar39

My advice - enjoy the money. Do what you say (little holiday flat), make use of it and then hopefully make some money on it in the future. Yeah you could look at all the investment options, but life's too short and you'll still be investing in a holiday flat whilst enjoying it at the same time. If I had that sort of cash that's what I'd do.