where to invest now?

cinek

I've sold 90% of my funds couple of months ago and now hold most of my savings in cash with fidelity which is basically loosing money. My question is, where would you guys invest now? I don't want to take on too much risk so a cautious fund would be ideal. Don't mind if it returns 3-4% as its still better than banks

JohnRo

I'm investing in exactly the same things I was a couple of months ago.

** Out of interest, what did you sell?

ChopperST

Difficult to make any recommendations without knowing your personal circumstances, particularly what's your timescale and tax status? Can see you are relatively risk adverse.

cinek

I want to ride out he bumpy road before moving money back into my old funds. Currently pay 20% tax.
I've been looking at this fund for a while now, not sure if it's a good choice right now Fidelity MoneyBuilder Balanced Fund Y-Income

bowlhead99

How much are you willing to lose and over what timeframe?

I can't think of anything projected to return 4% over the next couple of years which doesn't have a risk of capital loss, apart from the Lloyds, TSB and Nationwide current accounts. Assuming 90% of your funds is more than £10k or so, you will need to use investments rather than those products, but the definition of 'cautious' depends from person to person.

Certainly if you are cautious about the potential losses from investing in equities, government bonds, real estate, commodities and assets denominated in foreign currencies, you might be quite satisfied with only losing a small amount of money to inflation while using a cash product.

Some of the assets in my portfolio which aren't highly volatile equities include corporate bonds, property funds, some specialist real estate investment trusts, absolute return funds and so on. It is always good to aim to hold a mix of uncorrelated assets.

The answer to where would you invest now, for a lot of people, is where they've always invested - a broad portfolio.

A few days ago European equities were looking cheaper than they had for a while, but I see most markets are on the up again today. Though I assume your question is not so much "where would you guys invest now" as "where would you guys invest now if you didn't want much risk and were looking for something that meets my own undefined meaning of 'cautious' " , which probably cuts out any funds which have a 100% allocation to equities.

Kendall80

I realise the name puts people off but i'm making (or rather hedging ISA losses) using spread betting. Through careful use of stop losses and overnight asia index monitoring these big swings in the major indices are proving valuable. My S&S ISA is down 2% YTD but my spread-bet account is up 21% (roughly balancing out in terms of actual cash amounts)


With regards to which funds to invest in I'd echo johns sentiment above. Just because the market is going down doesnt mean your initial fund research/choices were incorrect. I'll be sticking with the same active funds but monitoring how they deal with this recent dip compared with their respective index. If you are invested in passive index funds then they are simply 'doing their job' right now so i'd see no need to alter those ( I hold 30% in the VLS100).


Of course if you have a low risk tolerance/short time horizon then rebalancing and increasing your bond/property allocations would seem a sensible precaution.

mvarrier

If you want out of the S&S market for a few months I would consider P2P...

Khrisjun

Id second mvarrier's comment of P2P, my S&S is marginally up ~1.5% past 12 months but my P2P lending has returned 11% (Ive been fortunate to have no loans written off which would have dropped it to 7.4% if the expected number had defaulted)

Kendall80

cinek wrote: »

I've sold 90% of my funds couple of months ago and now hold most of my savings in cash with fidelity which is basically loosing money. My question is, where would you guys invest now? I don't want to take on too much risk so a cautious fund would be ideal. Don't mind if it returns 3-4% as its still better than banks

To address your original post more specifically. The returns you mention should be possible at lower risk using an absolute return strategy fund such as the standard life GARS fund. This has returned 5-7% p/a for the last 4 years. Also take a look at Axa Framlingtons Managed income fund which currently yields 4%

Smithy101

I just read a review of Montenaro European Smaller Companies that has tempted me to invest.

It's managed by a firm that only does small company investing. It's had a few years bad performance because trash has been in vogue but WhichInvestmentTrust.com seem to think that now is the time to buy.

I've bought recommendations from them before that have turned out well so they might be on to something.

Article here:
http://whichinvestmenttrust.com/montanaro-european-smaller-cos-seeks-to-mine-a-history-of-5-9-annual-outperformance

Also, they reviewed US Investment trusts, JP Morgan Smaller Companies came out well. You can fin more info elsewhere on their website or on the AIC website.

bowlhead99

Smithy101 wrote: »

I just read a review of Montenaro European Smaller Companies that has tempted me to invest.

Your steadfast adherence to the whichinvestmenttrust website which you namedrop in 90% of your posts is probably not something that assists the OP.

He mentioned taking funds out of his previous portfolio and now says, "I don't want to take on too much risk so a cautious fund would be ideal."

Your suggestion is a tip for a smaller companies fund from your favourite website, where the final line of their review is "We would caution short term holders who are likely to experience volatility and increased risk".

While it is true you can't generally make returns in real terms without taking some sort of risk, an element of caution is a good thing, particularly when deploying a large proportion of your assets. My definition of caution would certainly include the concept of "DYOR", especially when considering advice from other forum posters who may not be unbiased.