Legacy Investment Advice

beachgirl53

Hi,

I have recently inherited approx. £50,000 from my mother's estate and am wondering how best to invest this. I have taken advice from various institutions, all of which I find conflicting and confusing.

I would like to keep some back for everyday luxuries, holidays etc but would like to invest the bulk of it for my retirement. I don't want anything too complicated but on the other hand I don't wish to just stick it in a basic savings account that will not work very hard for me.

Any sensible advice would be much appreciated.

dunstonh

wondering how best to invest this. I have taken advice from various institutions, all of which I find conflicting and confusing.

You shouldnt be seeking investment advice from institutions. They can only retail their own products or those they are tied to. So, you would get conflicting opinion. Also, investing is largely about opinion. There are a few wrongs but when it comes to getting it right then you could pick a near infinite spread of options and be right.

You wont get advice on the internet. investment advice is regulated. All you will get is discussion and comment. Some of which will be along the right lines. Some of it will be wrong. No one here knows your circumstances. So, cant actually answer your question as it stands. You need to give more detail and information. However, at the end of the day your choice is to DIY or use an IFA. All other options should be ruled out.

jamesd

What is the rest of your general situation like? What tax bracket? Approximate age? Got an emergency fund sufficient to sustain you for at least six months with no work, perhaps as much as a year? Do you have a desire to retire before you're 55 years old?

What sort of drop in value could you handle in a bad year, before recovery in subsequent years, without becoming depressed and selling near the bottom of the price range? The main UK stock market can be expected to drop by 45-50% in a bad year. Other types of non-share investment can drop less.

The sort of general thing that comes to mind for someone with a long time to go to retirement is something like:

30% Aberdeen Emerging Markets (70% drop in bad year)
70% Vanguard FTSE Developed World ex-UK Equity Index (50% drop in bad year)

For lower total drop and some significantly greater UK portion something like this might be of interest:

20% Aberdeen Emerging Markets (70% drop in bad year)
30% Vanguard LifeStrategy 60% Equity (too soon to know maximum drop, perhaps 30%)
50% Vanguard FTSE Developed World ex-UK Equity Index (50% drop in bad year)

For still lower drop potential:

10% Aberdeen Emerging Markets (70% drop in bad year)
40% Vanguard LifeStrategy 40% Equity (too soon to know maximum drop, perhaps 20%)
50% Vanguard FTSE Developed World ex-UK Equity Index (50% drop in bad year)

There's a compromise between drop potential and growth potential. Lower drop potential also means lower growth potential.

Whether pension or stocks and shares ISA should be sued would depend in part on your tax bracket, availability of a good pension deal from an employer and potential need for access. ISA is the easy first choice, often within a pension can be a better deal if you can handle the loss of access.