What to invest in?

masamoah

Right, i need a bit of advise.
I now have a steady job and want to use a proportion of my wages to save and invest. I am looking to save £400 a month in straight cash and invest £400. I am looking to for an investment of about 5-10 years but am put off on investing where i have to spend time 'managing' my stocks. What shall i invest in, if i just want to put in a set amount of money every month, without having to deal with the hassle of buying/ selling. Effectively, just want to put my money in something, do nothing, and hopefully watch it grow over the years. I am after a medium risk investment. I am new to this, any help will be much appreciated!

Linton

If you are going to need the money in 5 years dont invest. Stay with the highest interest savings you can get. 10 years is getting more realistic, but it isnt that long. You may want to reduce your investment risk within say 3-5 years of the time when you need the money.

As to a simple hassle-free investment your best bet in my view is a broad diversified fund where you pay the fund manager to do any buying /selling required.

One popular investment is the Vanguard Life Strategy range which invests in a specified % of major companies, mainly in the developed world, and bonds. So Vanguard Life Strategy 60% would be 60% shares and 40% bonds. Something like that may be appopriate for your timescale.

Another alternative is a multi-asset (or mixed investment) fund like those supplied by Blackrock or L&G. These may give a broader range of investments than the VLS funds.

Which fund you choose of this type wont matter a great deal. Any would be suitable as a single drip-fed investment. You would need to look at fund purchase costs as a fixed charge may be expensive for the relatively small individual payments you are proposing.

Dird

Linton wrote: »

If you are going to need the money in 5 years dont invest.

Why? Some funds say they aim to generate a profit over 36 month cycles & providing it averages more than 4%/year he'd be better off than with banks

He could always pull out after a year if it was down & panic kicked in

colsten

For your cash savings: https://forums.moneysavingexpert.com/discussion/5374614

For your investments (5+ years): http://monevator.com/category/investing/passive-investing-investing/

colsten

Dird wrote: »

Some funds say they aim to generate a profit over 36 month cycles

what if they don't achieve their aim?

Dird wrote: »

He could always pull out after a year if it was down & panic kicked in

are you serious?

enthusiasticsaver

Check out the links posted above and decide your attitude to risk. I wanted to do the same as you and just invest and leave it as I was completely new to investing. I did some basic research and went for the Vanguard Lifestrategy 60 fund which is popular for people who just want to put money in (either lump sum or monthly) and then leave it. I am not saying that is right for you - only you can decide that. You do need to decide though whether you are happy to invest for the long term and I would not recommend you putting all your savings into investments in case you need to access it in a hurry. The last thing you want to do is sell investments when the market is going through a downturn.

snowqueen555

Dird wrote: »

Why? Some funds say they aim to generate a profit over 36 month cycles & providing it averages more than 4%/year he'd be better off than with banks

He could always pull out after a year if it was down & panic kicked in

That +4% could also be -10%, that is the nature of the stock market.

3 years is pretty short and I don't know of any reputable source saying anything less than 5-10 years is a good idea as this gives your investment a chance to even out any downturns.

=

There are index trackers available that track the general market, they are also the cheapest funds to invest in, and have various risk levels depending on what your risk profile is (usually a divide between equities and gilts/bonds securities). Vanguard is the one that is very popular, but there are alternatives.