How best to put £255k in savings

gadgetmind

Froggitt wrote: »

You're lucky they werent RBS shares........would be worth £250 now.

Which is why the best advice is to limit your exposure to individual companies and sectors (and territories, and asset classes).

Of course, we all have free will, and I occasionally exercise mine and make conviction purchases with a *small* part of my total portfolio. Other may choose to exercise theirs by hoarding gold, or stuffing their mattress with £50s; each to their own.

gadgetmind

JoeCrystal wrote: »

Well, ideally, if it was me. I would spread around ten different shares.

That's the barest minimum. 10 to 15 is better, and you need to ensure they are all large companies with international exposure, a good dividend record (so non-cyclical), and good divi cover.

Maybe gadgetmind invested in several different companies? And got lucky.

Luck is where preparation meets opportunity.

But seriously, I have done a few punts over the years, but the investments that have really paid off are those where I've done my research, understood the hell out of the company and its market, and have been prepared to go long for a few years without panicking when the rest of the herd do. Where I've failed to do *all* of the above, it's usually turned out badly.

lesleymarr

Loughton_Monkey wrote: »

I tend not to use 5 year fixed rates. It's too long a time - during which there is a danger of rampant interest rate hikes once it ever gets started.

As an early retiree, I have to 'optimise' savings/investments. I choose a fixed proportion of equity funds (in a long standing ISA). But as to the rest (cash) it is really widely spread in things like:

Cash ISA
Regular Savings Account [like First Direct]
2-year fixed rates
1-year fixed rates
NS&I Index Linked
Gimmick Accounts [Halifax Reward, Lloyds Vantage, Santander Current] - although these are dying now.
Investec 'High Five' [Now closed to new investment]
Limited Withdrawal Instant Access [Like Coventry Poppy/Nationwide MySave]
... and a bit in normal Instant Access (for cash flow).

Good afternoon. I like this post. you are in a similar financial position to me. I recognise those savings types, I have them too. I'm wondering about a Wesleyan with-profits ISA. They are waiving the joining fee if I put money in before October; but it seems very complicated and i'm not sure at all. Have you looked at these? I would value your advice.

lesleymarr

bpm wrote: »

I still struggle to understand why anyone would invest money in any kind of savings account with the current rates of return?

If the RPI and CPI (Inflation figures) are currently over 4% (and according to the governor of the Bank of England, due to go over 5% soon) then anything lower than this figure means your money is worth less when you invest it at a lower rate.

Its basic maths : if you invest £10,000 in year 1 and a loaf of bread costs £1, then you have 10,000 loaves of bread.
After 1 year at 3% (not including tax deductions) you have approx £10,300 but as inflation is 5% a loaf of bread is £1.05 so you have 9,809 loaves of bread. Thats less than you started with! Invest it for 5 years and youve lost loads.

Any one with a miniscule knowledge of economics knows that inflation is way above 5% due to the way they use a basket of products to measure it, which keeps changing. So youre even worse off.

We live in a time of recession, banks, savings institutions, stocks and bonds are currently the lowest performing assets. Look at history to see how many times this has happened. Invest in a commodity that is increasing in value, not decreasing.

Theres many out there, mostly metals and most people advocate gold due its relationship with the monetary system. Even central banks still hold gold reserves and they have started to increase these over the last few years. Why do you think the largest financial establishments on earth are doing this? Do you think theres something they know that you dont?

But inflation is personal. For example Cigarette prices can soar by 99999 % and since I don't smoke it will affect me little. If the price of something I do like, for instance , apples, goes very high then, yes that will affect my inflation rate..but I could chose to eat bananas instead (assuming their price stays the same). Buit if the price of petrol goes up that will affect me if i have a car and if i don't because the things i need are delivered by petrol burning vehicles.
My personal rate of inflation is between 1-2 %, I check it out sometimes, I have an excel spreadsheet on it because I'm a nerd.

lesleymarr

Meeper wrote: »

Apologies for being down on the comments here, but really - looking to invest / save £255,000 and relying on the opinion of people you have never met on an internet forum is somewhat foolish, if you'll pardon my saying.

Why would you not seek out a financial adviser and get some appropriate assistance?

and I'm looking for a second opinion from my financial advisor.
Who is from the Wesleyan and has advised me that the Wesleyan With profits ISA is a good deal but I don't understand the figures. So i can't see how good a deal it is.

lesleymarr

Hughesy84 wrote: »

Im on a forum to get opinions, from people that have money invested/ in similar positions - to see what products they have found.....thats what these forums are all about. :eek:

Why dont you give us some free advice and tell us what you would do with your £255k?! :cool:

Just because someone is on this forum and giving their opinion for free, it doesn't mean it's wrong.

lesleymarr

Meeper wrote: »

I appreciate that.
Agreed.
This is where your argument falls away slightly (but not massively). The financial advice community DOES recognise the failings of the current system. At least, the good ones do. There are still some around who are dishonest and fleece their clients out of every penny.

Good point well made. But I can't tell who is a good advisor and who is a salesman. They don't wear hats with a band saying ' My interests bf yours' or 'your interests b4 mine'.

That's why i'm poking about here, absorbing best I can what everyone thinks, because I'm trying to decide on a Wesleyan With Profits ISA which it says, can't lose money (With profits) BUT will require me to pay fees of 7%.

lesleymarr

gadgetmind wrote: »

The whole investment industry is geared around a select few making money come rain or shine. This is why I favour ITs where the managers have a lot of "skin" in the trust.

http://www.investmentweek.co.uk/investment-week/news/1947189/managers-skin-game

I also favour companies where the directors are buying, but historically it seems that said directors are no better a judge of price direction and yield than outsiders!

Yes and periodically we hear on the radio about school kids who had invested on the stock market and made far more money than fund managers.

Jimmbron

Lesleymarr - I'm new to the forum but a couple of things struck me about your posts above.

A Wesleyan adviser won't be independent - most likely tied to their own product ranges - hence I'd be wary of "salesman" as you put it.

With profits fell massively out of favour a few years back for failing to deliver on their promise of "guaranteed returns". Maybe things have changed (I haven't looked at them for a few years), but I'd tread carefully. Also, 7% sounds steep.

You're right - it is tough to spot a good adviser from a bad one. Things to look out for: are they "independent"? how well qualified are they (ideally chartered or certified)? are they "fee based" or "commission based"?

GeorgeHowell

lesleymarr wrote: »

Yes and periodically we hear on the radio about school kids who had invested on the stock market and made far more money than fund managers.

That can happen. But it would be conceptually similar to a bunch of kids picking something out in each race through the card at Newmarket and doing better than racing tipsters.