Investment advice appreciated

rebecca1

I have 66,000 of savings sitting in a Building society earning 1.28% interest net (20% tax payer).


I need half of that to put towards paying off my mortgage in 2017. The rest I have no short term plan for..


I have looked around at Isa's especially with the 15,000 limit per person which seems good if you can get a good rate.
Any other ideas of how I can maximise interest without risk?
I don't think I want to go down the stocks and shares route as I have had previous bad experiences.


Thanks
Rebecca

Archi_Bald

You shouldn't got the S&S route, not because you made a bad experience but because you need to be able to leave your money invested at least 5-7 years, and you don't appear to have that sort of time.

So you need to stick with cash savings. You can get about £44K into various interest paying current accounts (Santander, Lloyds, TSB, Nationwide, BoS), and £15K into a cash ISA. There are threads on all these on the forum. Cash ISA rates are dire but you could look at the DotCommUnity offering which is market leading.

PS. this is not advice, it is just my opinion.

dunstonh

I don't think I want to go down the stocks and shares route as I have had previous bad experiences.

it is difficult to see how you could have bad experiences with mainstream investments in an S&S ISA unless you did something silly (such as taking the money out after a drop or investing above your risk profile or into unsuitable investments).

However, in this case, you shouldnt have investments due to time-scale. 3 years is not enough. Stick to savings.

Smithy101

rebecca1

Equities are where you make the greatest returns over time. They are only volatile short term. If you had been invested just before the credit crunch when markets tanked but held your nerve, and didn't sell you would have made more money than if you'd investing in a Saver account by now.

If you want lower risk go for investment trusts in an ISA that target avoiding losses.

Look at Scottish Investment Trust / Martin Currie Global Portfolio / City of London Investment Trust.

For example, looking back 29 years Scottish Investment Trust has increased its dividend every single year by an average of 7% per year for 29 years!

City of London has increased it's dividend though by a smaller amount every year for 44 years.

Are these really that risky?

I can't post links but the WhichInvestmentTrust.com website writes in kind of plain English about these trusts. If you want to be a bit more adventurous and read in more technical terms try Morninstar.co.uk.

bowlhead99

Smithy101 wrote: »

rebecca1

Equities are where you make the greatest returns over time. They are only volatile short term. If you had been invested just before the credit crunch when markets tanked but held your nerve, and didn't sell you would have made more money than if you'd investing in a Saver account by now.

This is generally true of course, in the long term. However, as the other long-serving members of the forums have pointed out, the OP does not have "the long term", needing half the money back in 3 years (and presumably the other half does not have specific plans but a chunk of it will be a safety net / emergency fund).

If you want lower risk go for investment trusts in an ISA that target avoiding losses.

Look at Scottish Investment Trust / Martin Currie Global Portfolio / City of London Investment Trust.

For example, looking back 29 years Scottish Investment Trust has increased its dividend every single year by an average of 7% per year for 29 years!

City of London has increased it's dividend though by a smaller amount every year for 44 years.

Are these really that risky?

Yes, compared to cash savings, if preservation of capital is important. I do not give a stuff about getting a 2-3% dividend if I have lost 40% on the capital. Here is an illustration of the returns of those three funds from late 2007, per http://www.trustnet.com.



So, sure, they have all increased in the last 5 years from 70-125%. You need to be able to wait around for that, if your 100k becomes 60-65k in a year and a half.

I can't post links but the WhichInvestmentTrust.com website writes in kind of plain English about these trusts.

There is a reason people with new accounts can't post links. It is to avoid people with an agenda or commercial interests pushing them down our throats straight from the off. You have done less than 10 posts but have mentioned investment trusts on pretty much every thread you've posted on and, specifically, whichinvestmenttrust.com in most of them.

I have no beef with that particular website but doing a quick 'advanced' search on the savings and investments forum - considering there have been tens of thousands of posts on this forum dedicated to investments in the last year - its name has only appeared in some 25 of them.

The authors of those posts were "IrnBruMan", who said he was an analyst writing articles for them; the similarly-named "BarrBru";, and now you. Between you, you have amassed under 70 posts and managed to mention that website in 25 posts.

So forgive us if we think you may be posting to drive commercial interest towards that site which the typical poster does not usually have cause to recommend.

Your posts are generally making sense and I'm all for 'being nice to newbies' but forgive me for judging a book by its cover.

FWIW, I do hold quite a number of investment trusts but if someone has had 'bad experience with S&S' for whatever reason and is looking to 'maximise interest without risk', for a clearly defined goal in a short period of time, it is ludicrous to suggest equity-driven investment trusts, even ones which have done very well over 25 years.

This is not to say that someone who had a bad investing experience can't come back to the world of equities for a portion of their assets given some gentle coaxing and by improving their education. But I would respectfully suggest that pimping your trusts website and recommending 3 trusts which visibly fell with the general market during the first couple of years of the credit crunch, is not the best way to help.

:beer:

kidmugsy

rebecca1 wrote: »

I need half of that to put towards paying off my mortgage in 2017.

From time to time people here make the case for NOT paying off a mortgage as you approach retirement. Often they suggest profitable ways of combining pensions savings and mortgage payoff. May I suggest that you keep your eyes open for their reasoning? Probably that would mean visiting the Pensions forum.