155000 to invest

dave4343

Hi

On here on behalf of my father.

Has 155000 to invest, where is best to invest high street banks, shares etc ?

Any advice greatly appreciated.

Thanks

Dave

innovate

How old is he?

What pension has he got?

What debts (incl mortgage) has he got?

What is he looking for from an investment?

What is is attitude to risk?

jamesd

Is he an experienced investor already? If he is not then a visit to unbiased.co.uk to find an Independent Financial Adviser is the way to do. They would normally suggest a mixture of savings accounts and unit trust types of investments to meet his needs with an expected drop in a bad year that doesn't exceed what he can handle, before recovery later. If he put it all in the main UK stock market that sort of drop would be 50% or so in a bad year like 2008. Corporate bond funds, commercial property funds and savings accounts in the mix are how the potential drop gets reduced to a lower level. For example, a 50% main UK market and 50% cash mixture would have a worst case bad year drop of 25%.

Banks are not normally the correct choice for this sort of thing unless he needs to avoid investing it, say to buy a property in a year or three.

doubleJackD

dave4343 wrote: »

Hi

On here on behalf of my father.

Has 155000 to invest, where is best to invest high street banks, shares etc ?

Any advice greatly appreciated.

Thanks

Dave

without more background info it's hard to give advice.

however, before you search unbiased.co.uk you should do some background research on investments. you wouldn't buy a new house/ car without doing some background reading...

i'll leave you with a thought, over the last century the UK stockmarket has returned about 5% a year in real terms, the average managed Unit Trust charges about 2 -3% a year. Are you really happy paying half your return in fees.... bearing in mind that there is little/ no evidence that the average actively managed fund outperforms the stockmarket

dave4343

Hi,

Many thanks for your responses, much appreciated.

Just like to add a little more background as requested.

His age is 64, yearly pension of 25k, plus state pension, mortgage free, not looking for a great deal in return, he is a safe type of character, not sure if he would like the risk of shares.

I also suggested property and also investing a little in shares eg 20000, but I am given to understand in shares you need to look at the bigger picture and not be too alarmed if they dip below your initial investment.

Thanks

Dave

gadgetmind

He maybe wants to consider a multi-asset income approach, so holding a combination of equities, bonds, etc., and could also put some into property but the latter is hard work given the returns.

He also needs to consider tax. Most forms of income other than dividends will be taxed at basic rate, which makes dividends pretty attractive.

My approach would be to buy shares in a combination of income oriented Investment Trusts, blue-chip companies paying good dividend yields, infrastructure companies and preference shares, and then start moving money into S&S ISAs as quickly as possible. Within ISAs he can use the same approach but also hold individual corporate bonds and REITs. (I excluded the latter two from "unwrapped" holdings because not all income is as dividends so more complex regards tax.)

He should be able to get about £7.5k extra income that should rise roughly with inflation without eroding the value of his capital over the long term.

If his goals are other than having more income, then ignore everything I just said!

dave4343

Many thank gadgetmind, I will pass this onto my father.

Thanks

Dave

gadgetmind

dave4343 wrote: »

Many thank gadgetmind, I will pass this onto my father.

Don't be in too much of a rush as I'm sure you'll get lots of other views and he does need to do his own research.

And you're right, capital values can (and will!) fall, but with a decent spread of investments, you can afford to be relaxed about this. ITs also have dividend reserves so they can bridge most bad periods without dropping their dividends.

On the negative side, anything with the word "income" in its name is currently on something of a premium as everyone and has dog is after income.

gadgetmind

Another suggestion is an Investment Bond, which I understand is also the first thing that most advisers turn to. These can have tax advantages but you need to really understand both the product and (importantly) the charges.

You don't mention your mother. I only bring this up because a married couple can work the tax and ISA system better as a team than as individuals.

dave4343

Thanks gadgetmind, yes did not mention mother, they are a married couple so I will also tell him to explore these avenues.

Thanks

Dave

gadgetmind

Investments and money can be transferred between spouses with no tax implications, so she can invest in her name and any income comes under her personal taxation. Both can also have ISAs (both cash and stocks&shares) so they can get that sum sheltered from tax in 6-7 years.

As I'm sure they'd like that sum to give them income and growth over 25-30 years, I'm afraid that they will have to stray far beyond just holding cash. This might sound risky, but the greatest enemy of all is the effect that inflation has on cash.