What is the best way to invest 50k ???

silver4444

Ladies and gents,

My wife and I were fortunate enough to make 50k from downsizing our house.

I initially had the idea of using the money as a deposit for a 200k buy-to-let property for our daughter. But I have not seen anything suitable as yet ( rents are barely covering mortgages here ! ) and I have been looking now for the best part of 6 months ! Houses where we live in Wokingham,
( Berkshire ) still seem to be going up in price. So investing in a buy-to-let is looking increasingly unlikely. Unless there is a price drop very soon.

We are both prepared to take a reasonable amount of risk (even though we have had our fingers burnt in the past with shares ! ), as we will be investing for the long term.

If you have any suggestions then we would be delighted to hear from you.

tom188

There is no easy answer to this...

For the long term if you arent confident to do the research into investments yourself, i would suggest you speak to an untied IFA, who will be able to advise you on options that you can take.

If you are still considering buying a property then you would need to keep the money in cash, top payers with easy access being ICICI or Icesave at 5.45%.

EdInvestor

Max out your investment ISA (7k a year X 2) first.That will get 28k of the money tax-protected by next April using this year's and next year's allowances.

Have a look around these two sites for suitable funds and help with working out your attitude to risk etc

https://www.h-l.co.uk
https://www.citywire.co.uk/Funds/Home.aspx

For shares, UK Equity Income funds are the lowest risk. Commercial property funds are low-medium risk,and so are corporate bond funds. Split your money up (maybe one third in each category for a lowish risk profile).

Note that if you are basic rate taxpayers, you won't pay tax on any dividend income from equity funds, whereas you will pay tax on property and bond funds income.

So it may be best to invest directly outside the ISA in the equity funds and use the ISAs for the property and bond funds.

dunstonh

As mentioned earlier on another thread, there are tens of thousands of options. We cant just pick an investment out of the hat and tell you its best. There needs to be a process of filtering to ensure the right tax wrappers and investments are chosen to suit your requirements.

It is actually quite hard to lose money on the stockmarket with a diversified portfolio and the fact you mention you have had your fingers burnt in the past suggests that you either invested the wrong way (i.e. single fund/share investing) or didnt understand the volatility that goes with investing (i.e. stockmarket is not one risk but a whole sliding scale and you jumped into a high risk end). With that in mind, if you intend to go DIY, then investing may not be the best option for you. If you dont understand the risk and reward of various portfolio strategies then it isnt something you should be doing on a DIY basis.

Saying that, a mortgaged buy to let is higher risk than most stockmarket investments so its probably not down to risk but more down to a lack of understanding.

How much loss would you consider in a 12 month period before getting cold feet?

silver4444

Thank-you all for your advice so far .

In answer to your question Dunstonh, we would be prepared to lose up to 50% of our initial investment over a year, as long as we were confident of larger long term gains. This is an investment that we have "earmarked" for our daughter who is still only 9 yrs. old, so we are looking for something towards the long term.

When we had our "fingers burnt" (investing in shares), we made the mistake of selling when the market had only taken a slight drop 10%. We were ignorant and it was a tough lesson, as the portfolio we had, has subsequently increased in value.