Shall I invest in funds now or wait for a bit longer

sabretoothtigger

http://www.citywire.co.uk/money/double-dip-fears-should-not-concern-the-smart-investor/a425781?re=10841&ea=249194

Cleaver

jonj123 wrote: »

To have achieved around 10-15% growth.

Per annum, or over the three year period?

If you follow your strategy of these funds are you okay with your portfolio being -40%, for example, at the end of the three year period?

I believe you can get a 4% fixed rate, three year savings product at the moment. You don't pay tax, so this would give you a return of around 12% on your money over the period. So why don't you do this?

jem16

sabretoothtigger wrote: »

I think even over 3 years funds will be better then savings,

I'm not so sure. After 3 years my investment portfolio was showing a loss. It didn't bother me as I'm investing for the long term but it would have had I needed the money.

jem16

Cleaver wrote: »

You don't pay tax,

He may well be a taxpayer - he mentions having an online business.

Cleaver

jem16 wrote: »

He may well be a taxpayer - he mentions having an online business.

True, I forgot that. I was thinking that he mentioned being a university student. I'd still go down the savings route than the speculative Asian funds though, tax or no tax.

jonj123

I'm not a taxpayer. My online business is on a very small scale and it's not a regular source of income. I make money as and when I want to trade otherwise there is no revenue. As this would be time consuming I am moving onto another source of income. I didn't make myself clear - I would want a 10-15% increase annually not 15% over 3 years.

jem16

jonj123 wrote: »

I would want a 10-15% increase annually not 15% over 3 years.

I think in these days that might be expecting too much.

Cleaver

jonj123 wrote: »

I didn't make myself clear - I would want a 10-15% increase annually not 15% over 3 years.

Okay. Well obviously everyone wants this, but I think it's unrealistic to have a specific goal of a 50%-odd return over a three year period. Lovely if it happens, and it could happen through investing in those funds, but there's a chance you could also lose 50% over a three year period too. My personal opinion is that no serious investor would set themselves a goal of 15% growth year on year. You might obviously have some years of more growth than this, but other years where you'll lose ground. I have a rough goal in my head of my ISA increasing by around 4-5% on average every year over a long term period.

As Dunston said, you're more on the side of speculating and gambling with your money at the moment, not investing. So your plan might work, but it might not. Which is absolutely fine, as it's your money and you can do what you like with it, but from what you've described your plan doesn't fit in with your expectations or what you require the money for over a short timeframe.

sabretoothtigger

Unrealistic, possible but fairly unlikely to make 15% every year

If you managed this Warren Buffet would consider you to take over from him, not many people could pull this off


Saying that we do live in extraordinary times and growth combined with inflation make gains of 15% more possible then in previous years hence I disagree with Gem on this point though normally I might agree

After 3 years my investment portfolio was showing a loss

3 years ago interest rates were much higher. I wish I'd switched to cash or something different myself 3 years ago and I would not have argued against it so much at that time anyhow.
I did have savings in 2007, I would not really recommend them so much now, in comparison they are poor for anyone to hold. Sometimes cash is needed but its a losing trade right now, it cannot be called saving


I just looked at my funds since April and Im only down 10% and I hold some pretty risky stuff overall. I dont consider that alot really, there is alot of potential for upside and with savings that doesnt exist


OP really needs to do more research and read a book.

jonj123

Cleaver wrote: »

Okay. Well obviously everyone wants this, but I think it's unrealistic to have a specific goal of a 50%-odd return over a three year period. Lovely if it happens, and it could happen through investing in those funds, but there's a chance you could also lose 50% over a three year period too. My personal opinion is that no serious investor would set themselves a goal of 15% growth year on year. You might obviously have some years of more growth than this, but other years where you'll lose ground. I have a rough goal in my head of my ISA increasing by around 4-5% on average every year over a long term period.

As Dunston said, you're more on the side of speculating and gambling with your money at the moment, not investing. So your plan might work, but it might not. Which is absolutely fine, as it's your money and you can do what you like with it, but from what you've described your plan doesn't fit in with your expectations or what you require the money for over a short timeframe.

I searched for gilts in morningstar and on average the 3 yr annual sd is around 8-9%. I understand gilds are the safest investments out there as you are effectively lending the the government right? So if gilts can offer this sort of return would expecting a 4-5% growth be a bit pessimistic? I might be getting this totally wrong but this is from what I understand. This is what I based my findings on:

http://www.morningstar.co.uk/uk/fundscreener/results.aspx?lang=en-GB&Universe=FOGBRP$ALL&InitialSalesCharge=1.0&IMASector=LC00000001