300k to invest

atush

Rollinghome wrote: »

A good place to start would be the Financial Times Guide to Investment - £15 at Amazon http://www.amazon.co.uk/Financial-Times-Guide-Investing-Definitive/dp/027372374X/ref=sr_1_6?s=books&ie=UTF8&qid=1319038457&sr=1-6

In fact, you won't go far wrong with any of the FT publications. There's also a lot of 'get rich quick' tosh out there, both in books and on the internet: often by people who earn money telling others because they can't earn it investing.

Then if you want to seek advice you'll be in a better position to judge whether that advice is good or bad. Always bear in mind that any adviser, quite understandably, will be looking after their own interests first and yours second, so be sceptical and never take advice at face value.

I would go read up at the Motley Fool website. AS welll as broadsheet newspapers, the FT, and The Economist I learned a lot there.

Rollinghome

Fed wrote: »

Thanks, funnily enough I already have the book i've just been too lazy to make a start on it. I'll make my way through it asap then

Out of interest (obviously it fluctuates and nothing is guaranteed) what would be a solid average return (siding on the low risk side) on 300ks worth of investment pa? 5%? 10%?

Definitely worth getting your head around.

It gives you some figures for historical returns in the first or second chapter using the annual Barclays Equity Gilt Study. That shows total returns on UK equities since 1900 have averaged about 5% pa. But remember that's before costs. If you invest in units trusts the total annual costs are likely to be upwards of 2% (far higher than revealed in the AMC or TER figures they give). Remember too that's the historical figure and there's no way of knowing if that will be repeated in the future.

Of course those selling investments will tell you "But if you'd invested in the ****** market 10 years ago you'd have done much better". That's like telling you how well you'd have done if you'd known the lottery numbers in advance. We can only guess which markets will outperform in the future. If we knew for certain then the money would have flooded there already and any advantage gone. The Japanese Nikkei was supposed to have been the sure winner 25 years ago but it didn't turn out that way. The index now stands at 75% below what it did then - so beware of predictions.

In reality, the average long-term return from all markets has been remarkably similar, the world average being around 5.2% p.a. before costs.

You can see some sensible comments on likely returns and risk by Paul Lewis of BBC Moneybox at http://www.web40571.clarahost.co.uk/archive/talks/20090319ThomsonReuters.htm (3/4 of the page down) and you can get copy of the 2011 Barclay Equity Gilt study at http://www.stockbrokers.barclays.co.uk/content/research/reports/specialreports/documents/Barclays%20Equity%20Gilt%20Study%202011~2011-02-18%2013_29.pdf (Intended for clients but that link bypasses the login.)

Most importantly, only invest in what you fully understand and beware of sales patter from the investment industry. Equities can be expected to outperform cash in the long run but only if you keep down costs low enough not to erode the "risk premium". Otherwise you'll get the risk and the salesmen and hangers-on will get any premium.