Surplus income - rethinking investing and considering term deposit instead?

Credit-Crunched

gadgetmind wrote: »

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 ...

My knowledge is all good and well, but when the markets want a share to fall the MM's will make it!

I try not to lose sight of the big picture, I set goals, if I reach x i sell. Then when I get there I sell. The best advice I was given was

never look at what you could have made, but what you have made

This has served me well, but I am always actually aware that the markets could chew me up and spit me out penniless if they so wish.

Hence my holidings in cash and some fixed term bonds as a nest egg!

Credit-Crunched

southerngirl wrote: »

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.

Ultimately you need to so what is best for you.

After you have been provided with options, facts and thoughts, you need to feel comfortable.

Me personally I like to take a chance, my friends like property, others cash ISA's, some like to spend every penny.

As long s your decisions are informed and made with the head then you can not make a wrong one.

gadgetmind

Credit-Crunched wrote: »

My knowledge is all good and well, but when the markets want a share to fall the MM's will make it!

Markets are as markets do. Over a period of weeks, my holdings would often fall by 60%+ but I knew that the markets were wrong and I was right.

Hey ho.

atush

southerngirl wrote: »

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.

But here's the Rub- if you had been invested at all in 2009/2010 you might have made far in excess than that on deposits ( I did).

So it worked for you and Great ;-) But your 170K might have been well over 200K if you had even been partially invested?

Something to think about while you are reading up- you have to be in it to win it?

Rollinghome

gadgetmind wrote: »

A few people have mentioned this, so I just ordered a second hand copy off ebay for £6.35 including delivery.

Must be a good investment for £6.35. Hope you enjoy it. If you're a fan, you may already know you can read his articles from the FT at http://www.johnkay.com/

Another book I bought full of hope recently when it was first published was the "FT Guide to Wealth Management" which I wouldn't recommend even at six quid and certainly not at the £40 cover price. Imho. pure pap

gadgetmind

atush wrote: »

Something to think about while you are reading up- you have to be in it to win it?

I have always made heavy use of equities because the risk is quantifiable and the long term (long term!) results positive in real terms.

I have *never* done the lottery, never put more than trivial pocket change into a fruit machine (and not for over 20 years!), and have never seen the point in raffles.

Investing and gambling are *very* different.

southerngirl_2

atush wrote: »

But here's the Rub- if you had been invested at all in 2009/2010 you might have made far in excess than that on deposits ( I did).

So it worked for you and Great ;-) But your 170K might have been well over 200K if you had even been partially invested?

Something to think about while you are reading up- you have to be in it to win it?

That's very true!

Well I don't have any regrets about the choices I've made because they were right for me at the time. For now I'm just going to enjoy my moment of being mortgage free and then I might look at relaxing my very cautious attitude towards risk!

atush

gadgetmind wrote: »

I have always made heavy use of equities because the risk is quantifiable and the long term (long term!) results positive in real terms.

I have *never* done the lottery, never put more than trivial pocket change into a fruit machine (and not for over 20 years!), and have never seen the point in raffles.

Investing and gambling are *very* different.

I have never done the lottery. OH buys one per week, but he is a gambler in small way. I have bought a 1 or 2 quid Scratchcards to put in the xmas stockings once the kids were 16. But that it only once a year lol.

Rollinghome

gadgetmind wrote: »

I have *never* done the lottery,

I did it just once but ended making a 100% loss, more than I've lost on any other investment, and not off-settable against gains apparently. I couldn't quite see the point of it after that.

tony2toes

Most financial advisors, brokers or sales reps, banks are reluctant to recommend Investment Trusts (ITs) because these do not pay a nice fat commission to the broker/financial advisor/sales rep. ITs have a better % annual performance track record than their ISA funds (unit trusts with tax free wrappers) and ultra low annual management charges e.g. 0.75% etc and no initial charges. Consider doing your due diligence in ITs and the sectors they invest in. Quite a lot of ITs now come with their own ISA tax-free wrappers - verify before investing.

Instead they choose to pump and overhype all the ISA funds (unit trusts with tax free wrappers) and plain unit trusts because these pay a fixed commission.