Beginner - how to invest 10k?

swingy

I've got 10k saved, no debts, and would like to put this money to work as well as possible for myself. My priority is to grow my capital and get a good return in the short term rather than 10+ years as I will be needing it for a house deposit in the next 3-5 years. Obviously I will be continuing to save in the meantime, but my concern is to ensure the 10k I currently have performs as well as possible in the interim.

I'm a novice, work full time, and don't really have the head for the ins and the outs of stocks/bonds and so on, so my plan is to hire a financial services advisor to invest in a range of options for me. My partner's family member is a financial investments person, so I hope will be able to point me towards a good, trustworthy FA who won't just push whatever the commission is in, (which I have gathered can sometimes be a problem - no offence to any FAs here).

So, has anyone any recommendations? Either for FAs, investment services etc?

Or I could avoid investing my 10k yet, continue to save and then build up enough capital to invest in some kind of hard asset which would result in income - e.g. commercial property which I could then rent?

Anyway, any advice from successful investors would be very helpful.

mike88

If you need the money within 3 to 5 years you have no options other than to invest in savings accounts with minimal returns. A financial advisor would not be able to advise any differently but might persuade you to invest in longer term products for which they will receive a commission and end up with you with a product you probably won't need.

Any kind of investment other than a savings account or current account with interest such as the Lloyds Vantage account would not be worthwhile given your very short savings period.

swingy

Ah - thanks very much for the reply. I was really hoping that there could be some options that could yield better than the (terrible) 3% savings interest at the moment. No hope then?

Drp8713

Well you could put it in a stocks and shares ISA and you may make 10%+ a year, the problem is if you need it in year 5 and the markets crash in year 4 you won't have time to make it back before you need it.

So as above, savings account if you need it in 5 years, S&S ISA if you need it in 5 years but could leave it for 10 if the worst happens so as not to lose half of it

DaveTheMus

mike88 wrote: »

If you need the money within 3 to 5 years you have no options other than to invest in savings accounts with minimal returns. A financial advisor would not be able to advise any differently but might persuade you to invest in longer term products for which they will receive a commission and end up with you with a product you probably won't need.

Any kind of investment other than a savings account or current account with interest such as the Lloyds Vantage account would not be worthwhile given your very short savings period.

Not true at all....

If you put £4000 in Unilever and £4000 in Centrica and reinvested the dividends your capital would safe and you'd be getting a 4% and 5% dividend respectively....with the other £2000, you could either invest in a mutual fund, Fundsmith for example up 20%+ in 2013 or if you want to take a higher risk with possibly higher returns then an AIM listed company like Independent Oil and Gas or Plethora Solutions Holdings both small new companies who in the next few years can make some serious gains.

It's best to keep the majority of your money in the giant market leader companies because the risk is minimal and taking the riskier option with 20%-30% of your money because the reward can be amazing.....and with online share dealing you can sell your entire holding within a few days, no problem.

Wilkins

DaveTheMus wrote: »

Not true at all....

If you put £4000 in Unilever and £4000 in Centrica and reinvested the dividends your capital would safe and you'd be getting a 4% and 5% dividend respectively

This is such idiotic advice it's difficult to believe it is not intended mischievously. ULVR and CNA are, I think, good investments (I hold one of them, in fact) but for someone looking to preserve capital in 3 years time the place for the money is not in equities.

Drp8713

DaveTheMus wrote: »

Not true at all....

If you put £4000 in Unilever and £4000 in Centrica and reinvested the dividends your capital would safe

AIM listed company like Independent Oil and Gas or Plethora Solutions Holdings

If you bought Unilever or Centrica this year you could be more than 15% down depending when you bought. How is that capital safe? And even some experienced investors don't touch AIM, the volatility and even bid/offer spreads due to lack on liquidity could cause anybody who wants their money out at a specific times big problems

ColdIron

DaveTheMus wrote: »

It's best to keep the majority of your money in the giant market leader companies because the risk is minimal

Giant companies such as BP?

DaveTheMus

Wilkins wrote: »

This is such idiotic advice it's difficult to believe it is not intended mischievously. ULVR and CNA are, I think, good investments (I hold one of them, in fact) but for someone looking to preserve capital in 3 years time the place for the money is not in equities.

Where is it then?

I was able to buy my first house because I invested in the market, if I'd gone with just cash I would have been about 3 grand down....I also invested in gold as we'll and at the time that was performing well.....the guy is obviously young, and being young he can shoulder some more risk than someone in their 60's say.

I think it's a bit offensive you think I would offer this advice with something sinister in mind...says more about you than me IMO.....

I'm just going by what worked quite well for me, and three years is a long time, might be enough time for the banks to implement a 'savings tax'.

The last place I'd keep my money is a bank......if you are totally risk averse you could stick the money in a credit union....the last one I was in gave you a 3% dividends every spring.

DaveTheMus

ColdIron wrote: »

Giant companies such as BP?

BP are up more than 3% in 2013

ColdIron

DaveTheMus wrote: »

BP are up more than 3% in 2013

And down how much in the OPs time-frame of 3-5 years?

No responsible Financial Advisor would recommend anything other than a deposit account for the OPs circumstances and requirement