mad or else?

samuelthomson240

ive got 61k left from my fathers estate i went to see the financial advisor with lloyds tsb last night who told me to invest at least half in unit trusts mainly bonds only 15 percent equities. he said a cautious fund averaged 14 percent growth over the last 18 months. is this a good time to invest i have noticed news headlines about greece and the eurozone. all im getting is 1.8 percent with their basic savings account any ideas would be gratefully received thanks john

jimjames

Now might be a good time to invest but I wouldn't buy from a bank as they are generally poor value. What you invest in depends on your age and attitude to risk, whether you have pension provision etc.

CLAPTON

bad idea to ask at a bank

move your money immediately to a decent rate of interest..say 3% is easy to obtain if you're willing to accept a one year bonus or go for something like Northern Rock Virgin at 2.85% easy access with no bonus (obviously fill your ISA allowance first)

bonds can mean many things and it depends what he menat
but traded bonds have done well overe the last few years because of very very low bank rate; once that starts to rise bonds will tank.


however can't really say what's best to do as you haven't said anything about yourself
age, income, pension provision, emplyment, partner, children, debts, house owner etc etc

Debt_Free_Chick

samuelthomson240 wrote: »

ive got 61k left from my fathers estate i went to see the financial advisor with lloyds tsb

Lloyds don't have financial advisers - just salespeople

atush

Yes, it is always a bad idea to invest using your bank as and advisor. They are only interested in earning more from you.

I would say it could be a good time to invest, although personally I would not be investing in bank shares or europe.

If you want advice, see an IFA, not a FA from a bank.

pqrdef

samuelthomson240 wrote: »

he said a cautious fund averaged 14 percent growth over the last 18 months.

Gilts have gone a bit crazy during that time - safe haven, and all that. And the Bank of England's huge buying spree hasn't done them any harm.

But there may be a limit to how much further this can all go, and there's a big downside when it all unwinds.

Newbie2saving

I agree with the above, I saw a few IFA's when I came into a lump sum, the bank's are not true IFAs. Often offering products from their banking group or ones with good rebate charges for them. Look elsewhere and see another couple and I am sure you will know what strategy and person you feel most comfortable handling your future.

Don't rush into anything, understand the basics of the investment and in the meantime move your money to a decent rate paying bank / BS.

Good luck.

grey_gym_sock

that's very misleading advice - giving the impression that perhaps the future will be like the previous 18 months. investments, unlike savings, are volatile, i.e. they can be up 14% in 18 months, or down 14%, or move a lot further than that.

it can be worth living with that volatility, because the overall return in long term may be a lot higher than savings accounts.

trying to predict the short-term ups and downs is difficult - generally, better not to try.

a "cautious" fund generally means a mixture of bonds and equities. both bonds and equities are volatile, but equities more so. however, the long-term returns from bonds are hardly better than from savings accounts. the long-term returns from equities are significantly higher.

but you might have to wait a long time for equities to come good. if you've lost money after 5 years, that should be no surprise, because 5 years is a short time for equities. 20 years is a long time. though nothing is guaranteed even then.

so an important question is how long you're prepared to keep your money invested, or how much of it your prepared to leave invested. everybody needs some cash in savings accounts for emergencies etc.

Linton

samuelthomson240 wrote: »

ive got 61k left from my fathers estate i went to see the financial advisor with lloyds tsb last night who told me to invest at least half in unit trusts mainly bonds only 15 percent equities. he said a cautious fund averaged 14 percent growth over the last 18 months. is this a good time to invest i have noticed news headlines about greece and the eurozone. all im getting is 1.8 percent with their basic savings account any ideas would be gratefully received thanks john

Having put your money into a savings account for temporary storage, the next thing to do is to decide what you want to do with the money and when.

Anytime is a good time to invest, but only with money that you dont need for at least 5 years as an absolute minimum. If a significant amount of the £61K falls into that category, then I would suggest talking to an IFA - a real one, not the personal advisor from your bank.

The bank advisor was correct: bonds have performed very well in the past year and so have funds which largely invest in bonds, such as cautious managed funds. However, unlike with shares, the price of a bond is limited. At some level it will never return enough to pay the initial cost and so you may as well stay in cash. We are arguably fairly close to that limit now and so bonds cannot continue for long to provide the growth seen recently.

If you do need some or all of the £61K in the medium term future perhaps it would be best to put it in a fixed rate deposit account where there are interest rates available of around 4.5% for a term of 3-5 years