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Balanced Porfolio - Invest Now or Wait?

Just wondering what the experts out there think about investing in a balanced portfolio at this point in time? Current investments etc are all diversified and my IFA proposes taking them all under one balanced portfolio umbrella where the emphasis seems to be biased towards (but not exclusively) Standard Life. Existing ISAs (split between M&G, Fidelity, Artemis and Aviva) private pension (currently with Clerical medical) and money well in excess of £50K in a bank doing nothing at the moment (dangerous I know due to £50K compensation limit). The FTSE looks quite strong at the moment and I am concerned about the bank money being invested when we are still in volatile times. "Buy low sell high" so why would my IFA suggest investing now? At least in the bank the money is kind of safe as long as the bank (Lloyds TSB) keeps it's head above water but releasing it into the financial market when there is still a risk of recession looming at the beginning of next year (or at least a dip in the markets) concerns me. Your thoughts would be most welcome.
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  • Rollinghome
    Rollinghome Posts: 2,739 Forumite
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    cgzz wrote: »
    "Buy low sell high" so why would my IFA suggest investing now?
    The most obvious reason is because unless you invest then he gets no commission.

    From 1.5% annual management fees, the 0.5% chunk going to the adviser is likely to be more than the amount going to the investment managers to manage the funds. He may also take another 3% or so commission upfront. Just as an estate agent will always claim it's a good time to buy a house then commission-based advisers should always be expected to claim it's a good time to give them your money to invest.

    Certainly there are good reasons to be cautious but on whether now is a still good time to invest then your guess is a good as mine. If you are looking for long term investment and are wondering whether there will be a cheaper time than today to buy within the near to medium term, then I think the answer must be that there will.
  • Scale it in and the benefit to a balanced portfolio is a variety of different markets can give an average gain not just up or down. Generally market prices do move together but some are always better value and should be bought now

    For 50k I think I'd want at least half a dozen funds to have a chance of being more balanced, I prefer to choose myself though

    Very long term ftse isnt overpriced, it was over priced ten years ago when it was at a similar level. The majority of ftse profits are foreign
  • Reaper
    Reaper Posts: 7,356 Forumite
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    cgzz wrote: »
    The FTSE looks quite strong at the moment and I am concerned about the bank money being invested when we are still in volatile times. "Buy low sell high" so why would my IFA suggest investing now?
    I could easy argue both ways - that it is high or low right now. It is still well below where it was in 2007 but equally it is well above its low point. If you think we are past the worst of it (eg recent good UK growth figures) you would want to get in quick. If you think a double dip recession is on the way (eg caused by government cuts) then you might not want to invest.
    At least in the bank the money is kind of safe as long as the bank (Lloyds TSB) keeps it's head above water
    It depends what you call safe. If inflation remains higher than the net interest you are earning then you are guaranteed to lose money.
  • gmgmgm
    gmgmgm Posts: 511 Forumite
    FSCS limit is about to go up from 50k, to near 100k IIRC so hopefully that should be less of a worry. Putting it into a decent savings account removes the need for haste. I'm fairly heavy in cash at the moment as many areas are looking over-priced. Nothing wrong with keeping money in the bank at 3% if that's the best & safest avenue at the time.
  • pqrdef
    pqrdef Posts: 4,552 Forumite
    Very long term ftse isnt overpriced
    If it's going to be cheaper before it's dearer, it's overpriced.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • pqrdef
    pqrdef Posts: 4,552 Forumite
    Reaper wrote: »
    It is still well below where it was in 2007
    No comparison really. Bank Rate was 4.5% and house prices were rising. Shares were up there in the face of competition.

    Now, Bank Rate is 0.5%, and countless billions of funny money have been pumped into the economy. The stock market is awash with money that's only there because there's nothing worth buying anywhere.
    "It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis
  • dunstonh
    dunstonh Posts: 120,187 Forumite
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    o why would my IFA suggest investing now?

    Do you want to wait until its gone up and ripe to go down again?
    Do you have have a crystal ball that says when its right or wrong to invest?

    A balanced portfolio wouldnt be 100% equity either.
    At least in the bank the money is kind of safe

    Apart from provider risk (not really a big issue), shortfall risk (depends on your objective) and inflation risk.
    Your thoughts would be most welcome.

    There are always going to be reasons not to invest if you want to go looking for them. The reality is that you cant time the market as you dont know the future. The markets generally price in what they do know and what they expect. Its the unexpected that causes most of the volatility.

    In reality, it sounds like you do not have the risk profile to go medium/high (Which is what 100% FTSE would be). You are looking for a reason not to invest rather than a reason to invest. However, you say the portfolio is balanced risk rather than medium/high. Maybe you need to review your risk profile.

    For long term planning, the short term volatility doesnt really have much impact. Especially if there are regular contributions on the go.

    When you invest you know there will be times it will crash. You dont know when they will happen but you know that they will happen. Well, if you scared of investing now then what are you going to be like when the next crash comes along, or the one after that or the one after that? You have to accept that it will go down again. All you can do is make sure your investments are consistent with your risk profile and accept short term losses will occur.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • LSEdwards
    LSEdwards Posts: 129 Forumite
    cgzz wrote: »
    Just wondering what the experts out there think about investing in a balanced portfolio at this point in time? Current investments etc are all diversified and my IFA proposes taking them all under one balanced portfolio umbrella where the emphasis seems to be biased towards (but not exclusively) Standard Life. Existing ISAs (split between M&G, Fidelity, Artemis and Aviva) private pension (currently with Clerical medical) and money well in excess of £50K in a bank doing nothing at the moment (dangerous I know due to £50K compensation limit). The FTSE looks quite strong at the moment and I am concerned about the bank money being invested when we are still in volatile times. "Buy low sell high" so why would my IFA suggest investing now? At least in the bank the money is kind of safe as long as the bank (Lloyds TSB) keeps it's head above water but releasing it into the financial market when there is still a risk of recession looming at the beginning of next year (or at least a dip in the markets) concerns me. Your thoughts would be most welcome.

    My advice would be to ditch your IFA fast. This smells like a classic case of "churning" to me. You obviously have a reasonably good understanding of investments, so you will be much better off making the changes yourself directly with providers who don't cream off masses of commission.
  • Rollinghome
    Rollinghome Posts: 2,739 Forumite
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    edited 5 November 2010 at 6:28PM
    dunstonh wrote: »
    Do you want to wait until its gone up and ripe to go down again?
    To avoid misleading anyone perhaps worth mentioning that the FTSE reached its highest level for two years today.
    dunstonh wrote: »
    There are always going to be reasons not to invest if you want to go looking for them.
    And always reasons to buy if you're an IFA paid commission by the investment providers to sell their products.
    dunstonh wrote: »
    The reality is that you cant time the market as you dont know the future. The markets generally price in what they do know and what they expect.
    And yet fund managers are paid to do exactly that: to buy investments that will rise in value and sell those that will fall. Those who agree that it's an impossible task may be better buying tracker funds but as those pay advisers little or no commission they tend not to be sold.

    Rumour is that some people are successful at timing markets and don't necessarily use a crystal ball. It's necessary only to get it right more often than wrong.
  • jimjames
    jimjames Posts: 18,884 Forumite
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    edited 5 November 2010 at 8:08PM
    In many cases the people who have made most money over the years are those that bought investments and sat on them through thick and thin. Buying and selling will give brokers and IFAs commission but not necessarily benefit you financially or improve your portfolio.

    This is one example where the commission generated was huge but will not necessarily benefit the investor.

    https://forums.moneysavingexpert.com/discussion/2826862

    If you want to consolidate your ISAs in one place then Hargreaves Lansdown Vantage account is a good place to be, I've moved most of my ISAs there and they have the flexibility to move into different accounts for very low cost should you so wish. From your post you sound as if you have some knowledge and may be able to make your own decisions.
    Remember the saying: if it looks too good to be true it almost certainly is.
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