What to do with 60K?

EdInvestor

Hi again fish10

fish10 wrote:

Edinvestor,
Thanks again for the useful advice, although I don't really understand the quote below. I don't know what you mean by asset allocation (is that choosing funds?) or how to differentiate between those funds which are mixed and those that are not and I thought they were all managed. If I'm being particularly dense, forgive me, I'm full of cold!

Sorry to hear you're under the weather, hope things improve soon.

Re asset allocation, remember on the other thread we looked at the calculator and you decided which percentage of your money you wanted to allocate to each asset class, eg equities, bonds, property cash?That's what it means.

Some of these managed funds ( eg balanced and cautious managed funds,equity and bond funds and the well known old favourite With-profit funds) try to do this asset allocation for you: instead of investing just in one asset class ( eg equities) they have some of the fund's money in equities, some in bonds and some in property.But how much at any given time is up to them and they may change the percentages - which would affect your overall asset allocation planning.So best to avoid these mixed funds IMHO.

[BTW when we get into all this it makes you realise how complicated investing in funds can be - personally I find direct investment in shares a lot more clear cut, not to mention cheaper! ]

Re your cash reserves, in that case suggest you don't up the risk level, just stick with your 10% in the higher risk area - either the small caps or the commodities funds.

Note to v_2:

Overseas property is MUCH MORE RISKY than UK BTL.Always ask yourself this question when considering buying overseas property:

"If I needed to sell it, who would buy it and how much would they pay?"

Often you will find that there is virtually no second hand market ( all sales are new build, often off-plan) and sellers are forced to take a big loss to get out of the investment. Overseas markets are not the same as in the UK.

Be warned.

mroller

Conrad wrote:

Morocco is your best bet. Nearly all the development is by internationaly renowned developers - stick to them.

Happy hunting.

Just a quick question, are you paying for the property in Dirhams? how are you planing to get your money back as I understand that Dirhams are not convertible to foreign currency?

mroller

EdInvestor wrote:

Perhaps a selection of commercial property unit trusts would suit them?They are low to mendium risk,with steady returns, latterly rather high as capital values have boomed in recent years.This is underpinned by solid rental returns around 6-7%, better than BTL.

When you say commercial property do you mean property in general or you mean commercial property used by comapnies?

The link you mentionned show property in general.

Cheers.

EdInvestor

Commercial property funds normally invest in office blocks and smaller office properties, shopping centres and industrial/retail parks.

They don't usually invest in residential property, which is a different asset class.Most small investors already have substantial exposure to residential property through owning their own home, so it's unwise to put more money that way. [Of course some people are so besotted with residential property that they don't want to hear this.....;) ]

Commercial property commands higher rental income than residential and the income is more stable as the leases are much longer.So it's less risky than a BTL - and more "liquid" of course. Recent capital growth has also been stronger as there is a lot of money coming into the asset class from bonds, where yields (income) are now very low.

BTW, I understand there is a new tax perk on the offshore property trusts - you can get up to 300 quid in dividend income per year without paying any tax So that's about a 6k investment at current yields.

Offshore property trusts are on this investment trust list

The ones run by Scottish Widows,Standard Life, Foreign and Colonial are probably the most popular.

cheerfulcat

EdInvestor wrote:

BTW, I understand there is a new tax perk on the offshore property trusts - you can get up to 300 quid in dividend income per year without paying any tax

This is absolutely not a tax perk and it doesn't apply to everyone; be very careful with this advice.

monkeydust_2

cheerfulcat wrote:

This is absolutely not a tax perk and it doesn't apply to everyone; be very careful with this advice.

do explain please

cheerfulcat

Hi, monkeydust,

The exemption only applies if you have total foreign income of less than £300 and you don't normally fill out a full tax return.

EdInvestor

Yes, a nice little tax concession. These offshore trusts are attractive to the same investors who hold dividend paying shares and fill in a tax form listing their divi income (tax already prepaid), so it means they can hold some trusts as well and receive up to 300 quid's worth of divis without having the bother of filling in the foreign income tax form. How nice to asee the Revenue making life easier for investors

PS.Just to remind: nothing on this site (or any other BB) is "advice", Moneysavers need to follow up by doing their own research.

cheerfulcat

EdInvestor wrote:

How nice to asee the Revenue making life easier for investors

...as a consequence of some very heavy lobbying by and on behalf of small Abbey shareholders after the Banco Santander takeover.

EdInvestor

cheerfulcat wrote:

...as a consequence of some very heavy lobbying by and on behalf of small Abbey shareholders after the Banco Santander takeover.

Oh I see, that's where it's coming from.:) Who did the lobbying then? Nice to see that at last the 'powers that be' are taking small shareholder interests into account - note the change in the Companies Act to improve nominee shareholders' rights last week.