best way to invest £150k for risk obverse 60 year old

dunstonh

We have previously lost money in zero dividend prference shares (recommended by fiancial advisor) so are a bit share obverse.

Most financial advisers do not recommend these. There were some issues with zero dividend preference shares some years back where they became fashionable but shouldnt have. They are not for typical retail client who doesnt understand investing. Its averse btw.

Also that is one end of the scale. Cash is the other. There are loads of options in between. Being heavy at either extreme is rarely a good idea.

DiggerUK

With most savings a/c's you will be losing with inflation these days. Even ISA's won't help you. Would not use anything longer than 1 year on a fixed term bond, stay flexible.

Property will not get you a return that matches, let alone beats inflation.
We have recently sold a property, because the best rents we could have hoped for would have given us less than 4% pa gross on the value of the property. With all the risks of tenants running off and suchlike, we decided it would have been a poor move.

PB's....love 'em....£1million to 0%. Safe, and instant access if you register for telephone and online service. Plus they are a bit of fun.
If NSI Index Linked Savings Certificates come back you could put £30k each in them. (no plans announced)

flittermouse wrote: »

..... Apart from ISAs what should I do with this money? Should I buy a property to let our or put in fixed interest savings accounts?:j

RetiredInThailand

dunstonh wrote: »

Premium Bonds: Awful product.

Not necessarily. It depends on what else you have.

I have some PBs but it only represents a couple of percent of my total wealth. As such it's just a bit of a flutter in a government-backed deposit. Someone has to win. Who knows?

OK, you could argue that I would be better off putting it in a time-deposit paying 4.5% and gambling part of the interest on the lottery, but non-residents aren't allowed to win the UK lottery so I would have to do something a bit more complex. Probably a good idea though.

gadgetmind

flittermouse wrote: »

I would however like to make if possible around £10k pa in order to have a few decent holidays. A steady income would be preferred.

That means you're after just over 6.5% pa and that (I guess) you'd like it as dividends to avoid paying tax?

That's very ambitious and can't be achieved without accepting at least some degree of risk. Safe assets always pay out less, and never has this been more true than right now.

Rollinghome

gadgetmind wrote: »

Safe assets always pay out less, and never has this been more true than right now.

To avoid any confusion, safe assets *may* return less than a risk asset but that depends entirely on the nature of the asset and the time period. Sometimes quite the reverse will be true, which is why the term *risk* asset is used. Which gave the best return over any period will only be known at the end of that period.

gadgetmind

Yes, sorry, I should have made it clear that I was talking about 20-30 year timescales.

Rollinghome

gadgetmind wrote: »

Yes, sorry, I should have made it clear that I was talking about 20-30 year timescales.

Sure, and of course you were talking about the last 20-30 years rather than the last 12 years or the next 20-30 years which is unknown and obviously not Japanese equities which are still showing an 80% loss on where they were 20 odd years ago.

gadgetmind

Rollinghome wrote: »

Sure, and of course you were talking about the last 20-30 years rather than the next 20-30 years

No, not just the last 30 years, but every 30 year period since 1871. Out of interest, do you know how many sovereign defaults we've had since then?

http://en.wikipedia.org/wiki/Sovereign_default#Examples_of_sovereign_default

Spain makes the list three times as does Greece. Even the UK has managed it a couple of times.

Japanese equities which are still showing an 80% loss on where they were 20 odd years ago.

I'm sure there are periods during which the stock markets in (say) Zimbabwe did much worse, but surely that's why we're all diversified geographically and across asset classes?

nb73

No offence to esteemed posters, but haven't yet seen a really good answer the the original question (and I certainly haven't got one!)

A 10 year UK government bond currently yields 1.74%, is this the benchmark for low risk return at the moment?

dunstonh

No offence to esteemed posters, but haven't yet seen a really good answer the the original question (and I certainly haven't got one!)

It cannot be answered on the lack of information given.

The OP is lacking an understanding of the various risks at the moment and is focusing on two extremes on the investment risk scale whereas in reality, a spread across the risk scale weighted to a more logical position is likely to be the best option. However, until the risks are understood, any possible solution is likely to be wrong.

We can look at risk on Premium bonds. They suffer inflation risk and shortfall risk. Yet the OP has used those despite saying he is risk averse. So, there is a contradiction in the information we are being given. We then see that he thinks a financial adviser recommended zero dividend preference shares and he lost money on those. These are high risk and most financial advisers do not go near these with retail clients. If you dont understand investing then you shouldnt go near these. The OP is eliminating all the lower risk options on the basis of what happened with these.