We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Surplus income - rethinking investing and considering term deposit instead?
Comments
-
southerngirl wrote: »Thank you all for your replies.
Do you mean - Global equities, global aggregate bonds, cash, UK equities and UK Gilts? or breaking it down further into the holdings?
I'm the type of person that needs to understand how things work before I get involved. As suggested I need to do some reading and educate myself further. Can anyone recommend any guides/books that would be a good introduction to investing?
Sectors would help for balance, but holdings would be needed for charges/performance.0 -
Yes and no. Yes because there is the risk of the original investment going down as well as up, but also risk of fluctuations in income if there is any yield on the investment.
No, in this case, because calling savings 'capital' tends to aggrandises them too much IMHO.
. There are some (sadly too few) deposit based products with inflation linked returns. From time to time some of them are good enough to eliminate inflation risk.
Interest rate risk: From where we are now the only significant change to interest rates can be up. So on the whole that is Good for deposits, but Bad for investments.
Criminal only if the law requires greed or gambling, but these used to be signs of a flawed character
In an earlier thread, southerngirl was chastised for paying off her mortgage rather than keeping the debt in order to 'invest'. I bet (yes I would have a very small wager / gamble) that southerngirl feels very happy with her choice to be debt free despite being told she was wrong.
On the whole I agree, however having 100% cash base deposits is not representative of a well thought out portfolio. You say interest rates can only go up? But what if they stay low for 3,4,5 years?
Also you say a rise in interest rates is bad for investments?
Bad for fixed interest securities yes, however I am filling my boots with lots of cheap units and under valued stocks. When interest rates do increase, hopefully it will be indicative of an upwards movement in economic growth and as such equities generally follow in a positive correlation.
I personally do not see any greed in ensuring that my portfolio is as balanced and appropriate to my stage of life as possible.
Oh, and on the mortgage point, if someone could guarantee Southerngirl a investment return of in excess of 4.49% for the next 25 years (after charges and tax) then yes invest the money. However If they can't, pay off that mortgage!!! Right move, now she can invest safe in the knowledge she is mortgage free!! :rotfl:0 -
Rollinghome wrote: »More difficult to read but interesting if you're really keen: "The Long and the Short of It - finance and and investment for normally intelligent people" by Prof John Kay
A few people have mentioned this, so I just ordered a second hand copy off ebay for £6.35 including delivery.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
All investments are subject to inflation risk and/or interest rate risk. Don't take too seriously the sales patter from vested interests who claim otherwise.Credit-Crunched wrote: »OP please do some research and don't listen to the investments are bad brigade!
Investments can be good or bad depending on the investment and the timing. I've a seven figure sum invested so wouldn't exactly see myself, or the vicar, as anti-investment but the idea that one asset class will consistently out-perform all others is a simplistic approach.
I notice from your siggy that you don't expect to be debt-free until Xmas 2012 yet you also say you're 'filling your boots' with what you describe as "lots of cheap units and under valued stocks". I don't know what experience you have to better evaluate stocks than the market but investing borrowed money is high risk so I really hope you aren't talking serious money.0 -
Rollinghome wrote: »All investments are subject to inflation risk and/or interest rate risk. Don't take too seriously the sales patter from vested interests who claim otherwise.
Investments can be good or bad depending on the investment and the timing. I've a seven figure sum invested so wouldn't exactly see myself, or the vicar, as anti-investment but the idea that one asset class will consistently out-perform all others is a simplistic approach.
I notice from your siggy that you don't expect to be debt-free until Xmas 2012 yet you also say you're 'filling your boots' with what you describe as "lots of cheap units and under valued stocks". I don't know what experience you have to better evaluate stocks than the market but investing borrowed money is high risk so I really hope you aren't talking serious money.
Thanks for your concerns!
The sig is my partners signature, I just happen to post when logged on. (long story about my money and her debt free!)
I am not investing borrowed monies, but money that I have saved up over time. If you took chance to read my comments I did not advise to put all her money in investments, I merely pointed out that they do have a place in a balanced portfolio of cash based deposits. I think we may agree on this.
Regarding my experience, I do not proclaim to be a market reader, however I do have a significant expertise in civil engineering / geophysics and rock structure. As such in a good position to review posts from speculative oil companies drilling.
I have made (not the seven figure investments you talk about) significant investments in 3 p shares (RRL) and sold at 24p, luckily in an ISA wrapper so no CGT (do the maths). Also I did very well in RKH pre bubble burst, Encore, SXX, RMP recently.
yes I have lost money, but anyone that hasn't has not actually invested!
So please read my posts again and understand I am not stating place it all in equitites.
p.s If i have a SEVEN figure sum invested I would not be on a pc on a thrusday night! No nightclub in Miamia Beach would be safe from me! :rotfl:0 -
Do let us know what you glean Gadget ;-)0
-
Do let us know what you glean Gadget ;-)
Will do. In fact, I suspect that book will sneak ahead of "Fundology" in my reading list, because I know I'll hate that one based on reviews. However, it did only cost me £2.60 inc delivery. I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Credit-Crunched wrote: »however I do have a significant expertise in civil engineering / geophysics and rock structure. As such in a good position to review posts from speculative oil companies drilling.
That's a valuable skill, and one that analysts will try and bluff but clearly lack.
It's the same in the technology sector; the analysts woffle and drone on about fluff and nonsense, yet totally miss the big picture.
I have some shares bought at 15p way back when the analysts were spouting on about how the company in question had totally lost its way that are now worth £6+ a share.
The lesson? Use your specialist knowledge, but still realise that you could be wrong ...I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Thank you for everyone's input - it is appreciated. Thanks gadgetmind and Rollinghome for the reading suggestions!
Credit-Crunched - yes, I'm remaining open minded about investment options and will do my research first. And as they say I'm conscious of not having all my eggs in one basket so to speak.
For now and until I know more about investing I'm still leaning towards Oldvicar thoughts
When I purchased my property last year I had built up a deposit of over £170,000 and this was purely from putting my money in high interest saving accounts and letting the interest compound. So in the past I feel that this method has worked quite successfully for me. I agree that interest rates are lower now but with term deposits available ranging from 4.5% to 5.5% I feel this is a more comfortable option for me at the moment.IMHO unless you have a keen desire for investment risk, then for the next few years you don't need to look any further than finding the best deposit and ISA accounts0 -
That's one of life's little teases. Too often you can be too busy acquiring the seven figures to invest to have time for nightclubs in Miami and by the time you do they aren't so much of an attraction.Credit-Crunched wrote: »p.s If i have a SEVEN figure sum invested I would not be on a pc on a thrusday night! No nightclub in Miamia Beach would be safe from me! :rotfl:
0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.1K Banking & Borrowing
- 253.5K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245.1K Work, Benefits & Business
- 600.7K Mortgages, Homes & Bills
- 177.4K Life & Family
- 258.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards