Where to invest money

Generali

andrewthomas2008 wrote: »

You suggest buying a house but then you suggest there's a housing bubble approaching, so wouldn't this be the would be the wrong time to purchase?

Making 10-20% pa leveraged 5x will double your money in 2-3 years. Who cares why prices change? As a poster called purch who posts on here says, "the price is the price". You buy for x and sell for y. Generally you hope y > x.

andrewthomas2008

Generali wrote: »

Making 10-20% pa leveraged 5x will double your money in 2-3 years. Who cares why prices change? As a poster called purch who posts on here says, "the price is the price". You buy for x and sell for y. Generally you hope y > x.

Sorry to disturb but I've got another question
But what would you say are the cons of investing in BTL in this economy, as there are always people willing to rent wouldn't everything be fine for the foreseeable future?

lisyloo

But what would you say are the cons of investing in BTL in this economy

There is a risk an individual tenant could be trouble e.g. non-payer or someone you have to evict for some reason.
If you invest in 200 shares via a fund and 1 goes insolvent then your risk is diversified.

Recent experience has show that fortune favours the brave and most of the time the worst doesn't happen.

Generali

andrewthomas2008 wrote: »

Sorry to disturb but I've got another question
But what would you say are the cons of investing in BTL in this economy, as there are always people willing to rent wouldn't everything be fine for the foreseeable future?

My main problems with BTL are:

> Concentration of risk, what happens if the house next door becomes a nightclub?
> Political risk (e.g. Labour standing on a manifesto pledge of no real rent increases for 3 years)
> No diversification. That housing has been a good bet doesn't make it a good bet. Ali/Clay got beaten in the end.

chucknorris

Generali wrote: »

My main problems with BTL are:

> Concentration of risk, what happens if the house next door becomes a nightclub?
> Political risk (e.g. Labour standing on a manifesto pledge of no real rent increases for 3 years)
> No diversification. That housing has been a good bet doesn't make it a good bet. Ali/Clay got beaten in the end.

I couldn't argue with any of that, I would also add that it is illiquid and also involves work/management (or at least additional cost if you want to buy the management/work). Despite that though if I was younger (I'm 57) and I wasn't already top heavy in property, I would invest, as it is though I am happy to stay invested, but I am watching the market, if it goes much higher I may start selling.

andrewthomas2008

lisyloo wrote: »

There is a risk an individual tenant could be trouble e.g. non-payer or someone you have to evict for some reason.
If you invest in 200 shares via a fund and 1 goes insolvent then your risk is diversified.

Recent experience has show that fortune favours the brave and most of the time the worst doesn't happen.

This may sound stupid but how do I go about investing 200 shares via a fund. Can I do it through a stocks and shares ISA and what companies would you recommend using?

I also watching an interview with a professor of finance in America and he said making a monthly investment into mutual funds over a number of years is a good idea, what do you guys think?

andrewthomas2008

chucknorris wrote: »

I couldn't argue with any of that, I would also add that it is illiquid and also involves work/management (or at least additional cost if you want to buy the management/work). Despite that though if I was younger (I'm 57) and I wasn't already top heavy in property, I would invest, as it is though I am happy to stay invested, but I am watching the market, if it goes much higher I may start selling.

Why would you start selling if the market goes much higher?

I only ask as I have a friend with a 1 bedroom flat in London, it's worth around £250,000 and he had an offer of £225,000 last summer, he didn't sell because he couldn't find a property within his price range as he wants to move closer to zone 2 but the prices for even a 1 bedroom well into the 300's and he currently lives in zone 3 where the prices are not rising as fast. But nonetheless he feels that his property will increase inifinitely, so I was wondering why'd you sell?

chucknorris

andrewthomas2008 wrote: »

Why would you start selling if the market goes much higher?

Because I have a lot of equity to spend before I die (no children), so at some point I will have to sell, there will be a correction at some point, I would rather sell before that, than afterwards. I wouldn't sell everything, but I would consider selling 2 or 3 properties (out of 9, including our home). My long term plan is to probably sell in about 8 to 10 years (market dependant), but nobody ever went skint taking a profit.

lisyloo

but how do I go about investing 200 shares via a fund

Well if you are going to DIY then you need to do quite a lot of research as there are loads of choices to make.
One cmmonly used, low cost company is H&L here
http://www.hl.co.uk/funds
(no connection and my broker uses Novia, they are just probably the most well known).
ISA & Pensions are excellent wrappers to use for tax reasons.

Monthly contributions are a good idea, for one thing you get used to the lack of income quite easily but also you spread your risk of buying high.
I think you need to do quite a bit of reaserach first though if you intend to do DIY investing.

andrewthomas2008

lisyloo wrote: »

Well if you are going to DIY then you need to do quite a lot of research as there are loads of choices to make.
One cmmonly used, low cost company is H&L here
http://www.hl.co.uk/funds
(no connection and my broker uses Novia, they are just probably the most well known).
ISA & Pensions are excellent wrappers to use for tax reasons.

Monthly contributions are a good idea, for one thing you get used to the lack of income quite easily but also you spread your risk of buying high.
I think you need to do quite a bit of reaserach first though if you intend to do DIY investing.

I don't particularly want to use the DIY method, I'd just like to in a set of mutual funds each month, what would your solution be?