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

jonj123

blinko wrote: »

trading as in the stock markert ?

yeah buddy far to asia, it sounds like you like higher risk funds and some excitement

in which case checke out my previous post but yeah obviously to heavy on asia there, bonds equities, bare in mind shares are more volitle than unit trusts so expect 5% movements daily especiually at the moment where good news and bad news have a heavy influence,

basically anything god from the US and everything lifts anything bad it all gets dragged down

No not trading in the stock market - trading electronic goods - I've never traded in the stock market before apart from the time I mistakingly invested my money in the natwest stocks and share account.

butterfly72

Cleaver wrote: »

If I were you...

I'd lock £50k of the money in to a fixed term savings product for three years. Your money is therefore safe for your propety purchase. Then if you want some risk (and some fun because, let's face it, investing is quite good fun) stick the remaining £5k in to some risky funds. Just be prepared to lose a good chunk of it.

This is the best advice I've read here so far. Only I'd keep adding to the 50K so your deposit is an even higher %. You'll have house buying fees to pay too and you really need a decent emergency fund. See my signature to see what we have been doing.

I put away just £200 a month into my S&S ISA - two funds at the mo and the odd lump sum into a tracker or company shares. (All equities - I do need to diversify!) I also put extra into my pension. The more exciting investing will come later when everything else is sorted!

blinko

yeah but realistically he is going to get 3 - 4% on that and lets say for good luck after 3 years he gets a total of 12% he could get that in one year in the markets lets say 8% pa a return of 24% after 3 years

the above is what yoru supposed to do for 3 yeras you wanna invest min 5 yers in markets but, the returns from savings are so poor ! a decent ftse divind will probably be better than a savings you might as well dividend chase

blinko

jonj123 wrote: »

No not trading in the stock market - trading electronic goods - I've never traded in the stock market before apart from the time I mistakingly invested my money in the natwest stocks and share account.

we all make the same msitakes, i went into the markets about 4 years ago and my incvestments dipped by 5% i paniced and took them ,out a year later they were up by 40%

ricky.patel89

I'm in the same position as the OP, I would like to start an investment portfolio as I'm only 21 and just graduated, most of my money is tied up in fixed rate products so can't begin with a lump sum, but I can afford to invest around £200pm but unsure of how to.

I would like my investment to diverse as possible i.e. equities in UK, US, Europe, Emerging Markets, India, also in gilts, commodities, natural resources. I would like a well rounded and balance portfolio, which can grow as time goes on. I'm looking at investing over 10 years to see some real growth, as times goes on I will be able to invest more and more. As I'm looking to invest over a significant period of time I'm looking at medium to high risk funds.

Any ideas?

Any ideas

blinko

dude you need to build your own portfoliio or get an IFA to help you, £200 is fine and Hargreaves lansdown are one of teh cheapest, fill up your ISA allowance first etc

but as for unit trust and stocks andshares its a take your pick game

jamesd

The first thing to do is decide on the percentage you're willing to tolerate the value dropping before selling instead of sticking it out. Once you've done that you can select a range of investments that when combined are likely not to drop more than that.

For the initial funds you gave the expected drop is to about 30% of their purchase price. That's fine, if you're prepared to accept that level of drop.

That these things happen isn't theoretical, one of my mixtures of investments, of lower risk, but still high risk, dropped to about 50% of its starting value. Within that some funds had gone up 35% and dropped to about 45% of what I'd paid. If bought at the high that would have been a drop to 33% of the purchase price. Most of your initial selection is funds that can see that level of movement. The combination has recovered since then, with more money added at the low prices - a time when it's emotionally hard to invest more.

To give you some general idea, you might expect this sort of movement:

Regional or single country emerging markets or natural resources funds: -70%+ :

Aberdeen Asia Pacific A Accumulation
BlackRock Gold & General Accumulation Units
Fidelity South East Asia Accumulation Units
First State Greater China Growth Class A Accumulation
Melchior Asian Opportunities A GBP Accumulation.

(I just cut and pasted yours, most are in this category).

Broad global emerging markets: -60 to -70%:

Lazard Emerging Markets Retail Income Units

Developed markets equity funds: -40 to -50%:

UK FTSE All Share tracker fund
Invesco Perpetual Income (though the manager of this one is cautious and it's likely to drop less than the FTSE, it's also why it grew less over the last year)

Strategic and High yield bond funds: -20 to -30%

High grade corporate bond funds: -10% to -20%
DANGER: there is a significant chance of a bubble in this market at present, it's usually fairly cautious but there is significant extra risk at the moment because buying may be at a market high.

Gilts and other government bonds: -10 to -30%
DANGER: there is a substantial chance that there is a bubble in this market at present, with significant chance of capital loss due to buying at a market high.

Guaranteed savings accounts and term deposit accounts: 0%.

The reason the safest bonds have danger warnings is that those are where people seeking to avoid risk have purchased. That drives the yields down and hence prices up. So that has produced good capital growth recently but when people get more confidence in equity markets, or if there is significant inflation fear, they will sell and that may cause a large price drop very quickly.

Meanwhile equity funds, particularly in developed markets, are not in favour at the moment, so prices are relatively low. Not as low as they were in early 2009, but still low.

Emerging markets have seen a fair amount of inflow, perhaps trusted more than some developed markets, so they aren't cheap any more, in general. Nor very expensive, but probably higher in the price cycle than developed markets, hence more room to fall.

You saw good recent performance on the emerging markets funds because there has been a general view that they are a good place to be over the last few years and that has caused them to be popular places to buy. They still have good prospects, but you need to be aware that they aren't cheap any more.

Buy low, sell high. Which implies not buying into bubbles and buying things that other people have fled from (but not Japan, it's a special case:) )

Your target isn't unachievable. The UK market averages close to your target long term and it's not in a high at the moment, so there's a fair chance that it could match or beat your target in your desired timeframe. But if there's a double dip and another recession, it may not do that and if you have a rigid ending time you may not be able to wait for a recovery. That's where a big chunk of the risk comes from: fixed end times. If you can wait you can take higher levels of risk. But you must pick a set of investments that won't cause you to panic sell and you must really be prepared to hold them when they hit that low, without selling. if you're not sure you can do that, go for a lower risk target, it'll be less painful.

Jonbvn

jamesd wrote: »

The reason the safest bonds have danger warnings is that those are where people seeking to avoid risk have purchased. That drives the yields down and hence prices up. So that has produced good capital growth recently but when people get more confidence in equity markets, or if there is significant inflation fear, they will sell and that may cause a large price drop very quickly.

Personally, I have jumped out of corporate bonds into blue chip equities paying good dividends. The bond bubble must burst shortly?

blinko

i dont think there are any bubbles out there, there is volatility but that seems to be mainly driven by coming out of a recession and the constant mixture of good and badnews and lack of stability out there, also we have just had a rally of around 3 - 6 months markets would be expected to pause

in teh short term i expect markets to head upwards at least until next april, i expect xmas trading figures to be inline with market expectations,

i would expect maybe an interest rate rise then or the cut backs by government to kick into the economy, medium term i am unsure, long term things will head up esopecially ermegying markets

dunstonh

i dont think there are any bubbles out there

Gold possibly.