Investing £70k tomorrow!!!

Cautious_Investor_3

jem16 wrote: »

Personally over 2/3 years I'd be looking for a savings account - it's possible to at least get around 3% - not great but better than a possible 40% loss.

Thee years, 4.10% fixed:

http://www.!!!!!!.uk/free-services/best-buy-savings-accounts/all-saving-accounts/rbs-the-royal-deposit-plan-7/

The Cautious Investor

investment_newbie

Thanks everyone for your advice!

I have a day off tomorrow to get this all sorted! And an appointment at the bank (10am!) which I may well cancel!

Better to get these things right!

investment_newbie

HappyMJ wrote: »

The problem with the global equity portfolio is that your pounds won't buy much foreign currency it's at a low and the returns are also very low. It's a gamble that you will probably lose on you may win. I wouldn't bet on it.

The returns on the cautious portfolio will be eaten up by fees.

I would put as much as possibe into fixed interest bonds over 1,2 and 3 years. Put a third over each time period. 4.5% is a pretty good rate. When the 1 year bond matures put the proceeds into the ISA.

I'd only get the 4.5% rate with the bank if I went with them for the investment...

Might be worth looking elsewhere I suppose..

Why would you split up over 1,2 and 3 year bonds? (Sorry, I'm totally new to all this!)

jimjames

If the bank adviser has really suggested that you put at least 50% of your money into stock market investments when you have stated that you have a 2-3 year time frame for needing the cash then you should report them. Others may be able to suggest the best place to do so - bank superiors or FSA but there is no way that you should put money into those investments when you need it so soon.

lvader

mike88 wrote: »

No sensible advisor would persuade you to invest in equities over a 3 year period. Its madness and you could lose a lot. Commission based investment with a bank which are tied to particular products is a very dangerous thing to do. This is not financial planning; its gambling. If your time horizon is 3 years you would be advised to play safe.

If you are intent on buying equities/rolling the dice on unit trusts you can do so at no initial charge and no commission with a discount broker such as Hargreaves Lansdown or Best Invest.

There is no need for you to be tied to accounts paying 0.8%. Look at moneysupermarket.com for best buy savings accounts.

You are failing to take into account the persons plans may be very flexible and their risk profile.

As an example I plan to retire at 55 but will most likely continue to invest mostly in stock right into the final year and probably beyond. If the worst happens I'll just work until I'm older.

investment_newbie

jimjames wrote: »

Absolutely - if it is needed in 2-3 years then you have pretty much no other options if you want to be sure that you have the amount of money in that time frame.

Beyond that if you can invest for the longer term ie 5-10 years plus then stock market investments would be worth looking at but definitely not products sold by Santander. Previous posts on their ISA bonds have shown how poor they are with some very onerous conditions. If you want to get money out early you will suffer a loss of capital for example.

The global equity portfolio went up 19.18% last year! (But I don't suppose that will happen again any time soon!)
I was told I could take the money out at any time without penalty...

The sales pitch certainly had me at first!

investment_newbie

The guy did make me feel like having 70k in 'cash' was ridiculous when the stock market was at such a low....

Nice to know it's not such an alien concept!

I'm so glad I took 5 minutes to post on here!

Cautious_Investor_3

HappyMJ wrote: »

The returns on the cautious portfolio will be eaten up by fees.

Bit of a sweeping statement that, was chatting to a friend of mine today, their cautious portfolio has produced about 48% over the past 7 years.

Hardly 'being eaten up by fees'.

It is perfectly possible to put together a low cost cautious portfolio and make a real return.

The Cautious Investor

jimjames

investment_newbie wrote: »

The global equity portfolio went up 19.18% last year! (But I don't suppose that will happen again any time soon!)
I was told I could take the money out at any time without penalty...

The sales pitch certainly had me at first!

It could have gone up by 100% last year but unfortunately that is no guarantee of any performance this year. In fact you could say the opposite is true - that an area that performs well is less likely to do well the next year and a poorly performing asset may do better if investors switch to find profits elsewhere.

It is true that with a share based ISA you can withdraw money whenever you want but chances are you won't want to if you've lost 50% of your money. If you're saving for 10 years and the market slumps 2 years into it then its not a complete disaster as there is time to recover, waiting 8 years to buy a house isn't so feasible.

On the whole I'm no great fan of IFAs but it would definitely pay to see one. The chances are that they might not be able to do a lot other than say to keep the money as cash but at least that will have protected you from a potential loss of capital.

jimjames

Cautious_Investor wrote: »

Bit of a sweeping statement that, was chatting to a friend of mine today, their cautious portfolio has produced about 48% over the past 7 years.

Hardly 'being eaten up by fees'.

It is perfectly possible to put together a low cost cautious portfolio and make a real return.

The Cautious Investor

Was that the Santander cautious portfolio though?