Corporate bond dividend drop

Ranger8

I`m sure you giving good advice Lokolo, but its just way above my head.

DiggerUK

Ranger8 wrote: »

Problem is where to put the money then ? (Believe I`m an idiot now?)

Well I don't think your an idiot, but everybody else knows I'm bonkers, and knows what's coming next.

Have a read of this article and see what you make of it. As bullion is VAT and CGT free that's one way to go, and the ETF's and Miners can be S&S ISA'd over time.
And yes, the amount you are talking about is in the same frame as here at Digger Mansions. But don't do it now if your not clear about what you are doing, your funds can be left as is for a short while, or parked in a bog standard savings account.

http://seekingalpha.com/article/221352-hedge-funds-are-buying-up-gold-etfs-should-you

You could also start a new thread asking for advice on what to do with 120K.
EDIT 140K

Ranger8

Well I`ve read the article Digger but properly understood it, no

Reaper

There are two problems. Firstly we can't say where to invest as that would be giving financial advice, which we are not allowed to do, particularly as we do not know about your finances.

Secondly there are always differences of opinion on a board like this. Digger is hinting you should invest in gold which has done well recently, but others would argue it is a bubble that is about to burst. I don't know which way it will go.

Have you thought about going to see an independant financial advisor (IFA)? They should sit own with you and go through your existing finances and your aims the suggest where to invest and arrange it all for you. You have to pay of course but it is probably worth it as I am concerned you may have all your eggs in a single basket at the moment, and it is not a basket I would like to have much money in right now.

IFAs are not for everybody but if you find the investment options daunting they may be a good choice for you. You can find one local to you at https://www.unbiased.co.uk or better still get a recommendation as some are better than others.

DiggerUK

Ranger8 wrote: »

Well I`ve read the article Digger but properly understood it, no

If you get chance, read the Financial Times, or the finance sections of The Times/Telegraph at least once a week. Build up an understanding over time.
Trust me, it's not rocket science, but it is like learning to ride a bike.

LongTermLurker

DiggerUK wrote: »

Well I don't think your an idiot, but everybody else knows I'm bonkers, and knows what's coming next.

Have a read of this article and see what you make of it. As bullion is VAT and CGT free that's one way to go, and the ETF's and Miners can be S&S ISA'd over time.

I don't believe you've just taken OP from bonds to gold in one fail swoop - not knocking the prospects, but it's hardly following the same risk level is it? And are you suggesting gold for the whole £140k?

Well I`ve read the article Digger but properly understood it, no

Well there is only one rule, and that's don't invest in what you don't understand.

But I guess you have to put your faith in someone if you want to give it a go - just remember everything you read on here is opinion, and even those who say they're qualified may not be... We're all "virtual".

Lokolo was just suggesting that rather than having £140k in a bond fund from one provider (Halifax), you might want to split it between different funds invested in different parts of the stock market - some low risk (like bonds) and maybe some higher risk (equities) - you haven't said how old you are and how long you have to invest, but if you're young-ish and won't die of a heart attack if next week you see part of your investment has dropped 10 - 20% (it will probably rise again), I wouldn't miss out on putting some into emerging markets, such as S America, Russia and the Far East or India. You wouldn't put all of it there, but that's a likely growth area.

Basically, at the moment all your money is in a fairly stable part of the stock market and effectively is being loaned to companies at Halifax' discretion - you're not investing in companies, just lending them money. It would make sense not to rely entirely on Halifax.

If you do do that, you could do a lot worse than doing it through Hargreaves Lansdown (no, I don't work for them!) because they effectively charge less commission than certain other ways.

You haven't mentioned if any of your money is in an ISA. Remember you can invest up to £10,200 less any cash ISA subscriptions in a Stocks & Shares ISA each year - if there are two of you, you can each do that, and all gains and income will be tax free. So if you do transfer, make sure you fill your ISA, and then in future years, sell some of the remaining funds into your ISA as well.

Rollinghome

dunstonh wrote: »

Rollinghome said, quote: "Which is why the FSA are forcing through a sea-change to the way IFAs operate under the 'RDR' for 2013."

No its not.

Erm...

dunstonh wrote: »

There are some rule changes coming in 2012 which will see many IFAs (and FAs) stop trading or drop to a restricted advice level.

Which is correct. Because under the RDR the very basic qualifications that many IFAs currently have won't be acceptable after 2012.

Justin Modray again on the RDR http://candidmoney.com/articles/article84.aspx :

I know this might all seem a bit tedious but, believe me, this is hugely important stuff. It's the best attempt yet at ridding financial services of the cowboys, greedy salesmen and mediocre product providers that have blighted the industry for far too long.

I doubt the new rules will be watertight, they never will be. I do fear that slick salesmen will simply extract extortionate fees rather than commissions from gullible customers.

It's the IFAs who for the most part have operated on commission but will be forced to work on fees he's referring to. So all is not lost for the IFAs who learnt their skills as salesmen for the banks and insurance companies. The sharp ones will still be able to charge unjustifiably large fees.

(That's certainly not to suggest that all former bank and insurance salesmen, such as yourself, who become IFAs are all just slick salesmen.)

dunstonh wrote: »

Journalists are hardly objective.

Unlike IFAs' opinions about IFAs?

Ranger8 wrote: »

Well I`ve read the article Digger but properly understood it, no

One of the many FT books on investment would be money well spent. See: http://forums.moneysavingexpert.com/showpost.html?p=37118038&postcount=13

Another possibility might be the free portfolio review service offered by BestInvest for those with over £50k and offer decent discounts . https://www.bestinvest.co.uk/Upload/banners/Portfolio-Review-July-2010.pdf

But as Justin Modray points out, you should always consider the motivation of any adviser. BestInvest and most other advisers won't make money if there's no other fee unless you invest in their funds so are unlikely to tell you to stay in cash (or Digger's physical gold) for a while even if they believe that's the best course.

jamesd

Ranger8, a subscription and reading of the Saturday edition of the financial times would prove very educational over a year or so.

If you're interested in some specific alternative funds to consider I suggested some for consideration a few days ago. However, this doesn't take into account your own risk tolerance and may not be appropriate for you, even though I think that they are reasonable choices in general.

The difficulty with UK government and high quality corporate bond funds at the moment is just how much money has been pouring into them over the last few years. That's produced an increase in price. When people move out of them again, prices will fall and there could be substantial capital value losses that take time to recover from. An increase in interest rates and/or inflation is the most likely big trigger for this but improvements in confidence in shares would also cause some move. there's little reason to doubt that these things will happen, the difficulty is in knowing when. Since that's hard to predict, and requires an accurate crystal ball, it's prudent not to put large percentages of your money into these potentially vulnerable areas. You're probably OK for another six months or so, hard to tell beyond that. And hard to tell how fast the drops might be even when it does start.

Funds in the strategic bond sector are one good alternative. Managers of funds in that sector can choose to avoid these areas or put less into them and more into other areas. It's also good to consider things like equity income funds, perhaps infrastructure funds as well, as part of the mixture.