£800/month to invest - ideas? high & low risk

Linton

Like all things it's not either/or. It's a list of priorities.

First priority is an emergency fund in an instantly accessible account. 6months living expenses is a good aim. That gives you some freedom - if the boss upsets you you can always say to yourself "I could resign now"" (you won't, but it will make you feel better).

Having got your emergency fund, what next? When will you need your savings? How much? If you dont know, make an assumption, you can always change it later.

So if the money is needed in 3 years time - put it in fixed interest accounts with maturity date in 3 years time. Do this until you have your needs set up.

5 years time or more: you need to be thinking about S&S. if its near term chose something fairly safe, if it really is long term you can happily go into the more hairy funds - emerging markets, resources etc etc.

Ark_Welder

Cash-Cow wrote: »

"Cautious managed" always makes me smile. Look at the historic performance of these and you will easily find years when they have lost 20% perhaps more. The FSA should look at the naming of these as they are in my opinion misleading.

The IMA recently came up with the suggestion of renaming all of the 'managed' sectors as....

....A, B, C and a new one of D.

I kid you not

jimjames

evilplan wrote: »

I know that S&S is for longer-term, but is there a chance that even if I just have some low-risk investments, I would still earn more than I could with a cash investment?

You certainly COULD earn more than with cash, on the other hand you could end up with less than you had to start with which doesn't happen with cash. Although a S&S ISA is designed for the long term there is absolutely nothing to stop you either taking the money out or moving it between funds to something less risky if it has jumped by 50% in one year.

cashbackproblems

I personally have a S+S ISA with HL and invest in 4/5 funds monthly (about £70 in each) and these are all fairly high risk but long term this is fine, they have grown 20-40% in the past 5 yrs and are in developing countries so should see further growth in the future, more than 3% interest. Look at the wealth 150 list on there are it has the best funds and i have so far found funds are alot safer/volatile than individual shares, even high risk ones

RobStaffs

cashbackproblems wrote: »

I personally have a S+S ISA with HL and invest in 4/5 funds monthly (about £70 in each) and these are all fairly high risk but long term this is fine, they have grown 20-40% in the past 5 yrs and are in developing countries so should see further growth in the future, more than 3% interest. Look at the wealth 150 list on there are it has the best funds and i have so far found funds are alot safer/volatile than individual shares, even high risk ones

Are there funds via h_l where you can invest in small values such as £100pm?

xrjtg

You can make monthly investments from £50 a fund, and change the selection each month. Their lump sum minimum purchases are higher.

jem16

cashbackproblems wrote: »

Look at the wealth 150 list on there are it has the best funds

Best for whom - HL or you?

Jegersmart

There is a lot of negativity towards managed funds on this board, more than I have seen elsewhere. I do not have anything invested in Cash ISA's and I am not likely to. All of my funds are managed, with a TER of between 1.2 and 1.9% charge per year. I have worked in the financial and energy markets for over 13 years now so I guess I have more experience and "knowledge" than the average investor, however I still entrust large part of my portfolio to the "professionals" and have reaped substantial benefits of over the years in doing so. I do however monitor and allocate according to my view of the markets on a regular basis as my own need for various exposures will change depending on what I see happening. I would only very rarely invest in a tracker - and you only need to look a historical graphs to see why. If you invested in a FTSE100 tracker in the late nineties you would barely be break even now - but you would have been substantially up and down during that period. Yes, some "cautious managed" funds have gone through patches of being down 20% as another poster says, but with a tracker in 2007 to end of 2008 you would probably be down around *60%*........people see what they want to see to justify their own actions and views. A major mistake in investing imho. Someone also mentioned returns on Bonds are "pitiful" - well I was 90% in bonds until early this year and my holdings have increased by 12.xx% every year for the last 3 years. Sure, had I been in equities I would probably have made a lot more - but "pitiful"? I don't think so. Anyone who says that about "bonds" does not realyl understand how they work imho.

My mind is completely open, I do not need to be right as long as I am making as much money as possible over a longer period. Whether that is in a Cash ISA, S&S ISA or individual shares I do not care and if I am wrong I take it on the chin and change my mind/strategy.

In order to avoid making this too long a reply as the subject matter is quite complicated, I would make the following obervations/comments:

1. The key thing here is your risk appetite, you have to be comfortable with your positions. This is a very personal thing, some never invest in anything except saver accounts or Cash ISA's and others do.
2. Decide how much work you want to do yourself - do you want to keep an eye on your investments and what the markets are doing or not? How much research do you realistically want to do?
3. I use Fidelity for access to the funds market and also have a SIPP with them etc. - their platform allows me easily to see how investments are doing and what I am invested in. Others have mentioned Hargreaves Lansdowne - they do a similar job as far as I know - use these types of platforms to get access to a wide a range of funds as possible (if you need it). My OH has access to ISA's through Barclays and she has access to only 60 funds or so. Fidelity and HL have 1k+.


You already seem to have some idea of what you want and what risks you are willing to take, and more research and education will only stand you in good stead. You can use www.trustnet.com for research on funds and to read about global markets and find out what is what. For example, you mention JPM Natural Resources? I was invested in them up until about 6 weeks ago but felt that commodities was going to take a downturn so reduced my exposure but as I want to be somewhat in commodities I switched to Investec Enhanced natural Resources which is a fund that at least historically smooths out some of the high volaility in the JPM Natural Resources Find.

This is just an example, when you are invested in anything but cash you are always going to feel the effects of the market. Quite often funds that have made 200% over a 7 year period have been down more than 40% of its peak at times during that period. What I invest in funds - whether within an ISA wrapper or outside are longer-term investments - I do not need access to this cash unless a series of very bad circumstances come together and I am willing to take that small risk. Even then, those circumstances may happen at a time when my portfolio has risen considerably. Who knows? Having said that, I am not adverse to going to 100% cash if I see things going down the tubes - I am hands-on in this process. Do you want to be?

In any case, I often keep in touch with individuals offline (via email for example) to debate/discuss strategies and ideas - we can all learn something new and get a different perspective. If the OP or anyone else wants to get in touch let me know in this thread and I can let you have my details. I should stress that I do not give advice, this is for discussion purposes and brainstorming and sharing of ideas only. Pooling of resources and research time can be beneficial I have found.

Good luck all.

oldtoolie

Before you focus on details of saving & investment, you need to look at your whole financial situation. Do you have a home mortgage? Would it be better to pay down on that? Do you have family responsibilities? Do you have life insurance if you do? Do you have a pension? Perhaps it would be to your advantage to pay more into an existing pension or set up an additional pension. What other savings do you have? What are your life goals? What allocation between cash, equity and bonds is appropriate for you?

Then you have to decide how much time you want to spend trying to outwit very smart people who work 24/7 by trying to pick shares. If your answer to that question is -- not much time -- you might come to the same conclusion that I have which is to invest mainly in tracker/index funds for the developed world and managed funds for the developing world. And avoid any investments that I can't understand such as absolute return funds.

evilplan

A lot of good stuff to think about here - thank you everyone.

OK, just to respond to a few things that caught my eye:

1) I don't honestly know what I want. I've got a good, fairly secure job. It has a good pension, but could always be better - I only joined the pension scheme when I was 31. I'm 41 now.
2) I have no family or mortgage. One of the happier sides to being a gay bloke is, I don't have offspring taking all my money. The downside is, I won't be able to guilt my kids into letting me live with them when I'm too old to look after myself
3) I have no debts, apart from a historical debt to a utility company which I'm paying off, interest free, at £20 a month. I was silly with debt when I was younger, and have been slowly putting it right over the years. I have no cards or anything.

I don't know what I'm trying to achieve by saving. Here's my thinking: I'm currently wasting all the money, so I should save it. This means I'm probably a bit impulsive - I really would like to put as much as possible away, and then claw it back if I realise I'm tying too much money up.

So that means... well, do I want to save it for 5, 10, 15 years? I guess the answer is, ask me in 5, 10, 15 years. I do appreciate that that's not a clear goal. I have no savings goal, except "stop me from spending all this money!" and "may as well make some money out of it while I've got it".

So in essence, if I don't need the money at some point in the future, I guess it's for long-term savings. I saved up all my wages for 10 years so I could totally renovate my (council) flat, which I rent but which is on a secure tenancy (as secure as it gets, anyway). So, for the forseeable future, I don't need any electrical gadgets, TV, bed, carpets - it's all done, and cos I saved up loads of cash, I bought top-quality stuff that shouldn't (ha!) need replacing for a good while.

Is this all making sense? I know it's not ideal to say "put it all in shares, then if I need a new telly, sell some of the shares", but if, *in the meantime*, those shares are getting me a good return, the gamble is that the trading/selling fees will be more than offset by the fact that I've left the money untouched. Cash is easier to get hold of, but gets me a maximum of small%.

My original plan was to put most of it into cash and then have a bit of a play with S&S. But I realised that, unless I am an expert, even a "bit of a play" with shares could wipe out the gains from my cash savings, so I started thinking about managed funds.

And now, I'm thinking that if I spread my money over cash - for reserve purposes only - and a mixture of low, medium and high risk managed funds, that's a sensible way forward.

I am, basically, open to offers. I'd like to hear your crazy and your sensible ideas. By "crazy", I mean "higher risk funds" of course, as opposed to suggestions for a particular brand of snake oil that is about to hit the market

I am quite a clever bloke, but in answer to the question about how much effort I'd like to put in to outwitting the fund managers: As a newbie, none at all. I haven't a clue. I liked the look of the JPM natural resources fund cos it looked like it grew and weathered well, was in the H-L Wealth 150 (I know, I know, but it represents *something* right? Makes me feel slightly more secure anyway), seemed to be mentioned a lot. That's it. I have no love for oil, and no knowledge of the natural resources markets. Similar with a few other funds - First State China, for example.

That of course makes me a poor decision-maker. But I'd like to have a bit of fun - so, if something looks good, maybe it's *ok* for me to risk some money in it for a year or so, look at it again, and move it on if it's scaring me too much.

Finally on the subject of effort: Part of me likes the idea of getting to understand the markets really well, playing and gambling. I'm sensible with money - when I do online supermarket shopping, for example, my rule is "only items I have used in the last few months, plus one or two treats up to £10 in value".

That might be my view of putting effort into playing the markets - most of my cash will go into cash/managed funds, but maybe I could save up a few £thousand over time and allow myself to play and learn and lose and win.

Either way, this thread has opened my mind up to more possibilities. I'd like to enjoy what I'm about to do - so, a little active management of my own holdings, good research into the managed holdings, and a lot of frustration at having to wait 10 years to buy that new TV.

*All* of your responses have been brilliant and added to my understanding. So, thank you all.

Please keep them coming - I'd like more specific guidance, I'd like to know what *you* are putting your money in. I'd like to know how *you* learned what you know, and why you decided on one course over another.

And if anyone, especially Jegersmart, wants to get in touch directly for off-the-record-recommendations-that-aren't-recommendations chats, I'm more than happy to do that too.

I just opened an H-L account, and they're not taking my first payment for a month. So I've got time to read and learn and argue. My instinct is to save £550 or so into various S&S funds - certainly, a day spent on MSE forums has made me feel that I should focus more on returns from managed funds than simply leaving cash to fester, although I'm mindful of the need to have ready access to funds - so I'll balance it out.

Oh, a quick question abou H-L S&S ISA: If I buy £50 of Bloggs Special Fund this month, and next month decide, no, I want Smith Extra Special Fund, does that mean I *sell* my £50 of Bloggs, or that I continue to hold approx £50 worth of them? Does that have an impact in terms of annual charges?

H-L made me feel confident about joining. But they are just not good at the very very very basic advice. I've got more questions, if you guys feel like answering, but it might require a new thread (I'm busy going through old threads, and it's really enlightening).

Thank you again everyone for your time and responses!