Switching saving after BoE decision and Brexit.

funkey_monkey

Hi,

In light of the recent BoE decision on interest rates, I've decided that I need to do something with my savings.
I've previously been in contact with a few IFA's in relation to investing my money, but have previously baulked at the figures they are quoting for setting it up.

However, with things the way they are is now the time to get into investment as a means of generating wealth? I'm worried that with Brexit looming that instability in the market could potentially result in very choppy waters for investing in the near term.

I'm intending to start up some investing myself by drip feeding some money into a portfolio on a monthly basis. However, for the savings (over £200k) I want a professional to take it on.

I've got a follow up meeting with one soon who I've downselected after meeting about 3 - 4 IFA's.

I intend if all goes well that it would be late September/October time by when I'de be able to enter the market.

Is now a reasonable time to enter the market and what ways can the investments be made to minimise my exposure to Brexit instability (or indeed to maximise from the instability?)

Thanks.

JohnRo

You cannot predict or control the markets, you can control to a large extent how much exposure to their gyrations you take on and what that exposure will be costing you.

What is the IFA recommending you invest in and how much are they charging you for the advice?

bigadaj

Well that pot will have significantly shrunk over the last near decade since the gfc, total return on stock markets over that time have been 50% or more.

That's a decent size pot, so you would expect his charges ti be maybe £2000 for setting it up and £500 or a bit more for yearly management.

You can save that by diying but you need to do some research and take on responsibility, the ifa isn't a magician and you can do it yourself with some reading and knowledge.

AnotherJoe

If you are invested correctly Brexit should be an irrelevance. The U.K. Economy is only 7 or 8% of the global economy AFAICR.

In any case You might also want to check out the UK stock market since say start of June. Pretty much back to where they were or higher despite all the Henny Penny stuff in the week after.

There are always choppy waters. US elections coming up. Italian banks may collapse. Euro fall apart. Another Euro country decide to exit ala Brexit. A major terrorist incident. Etc etc etc.

You might decide if you can't stomach the chances of an immediate drop that the investment is fed in over a period, say 6-12 months, but statistically chances are that would lose you money through missing out on rises and dividend. .

You might get lucky though as it's one off (like betting on the favourite,not a guarantee you'll win) but essentially if you have big sums in the market they will fluctuate in a big way anyway. 1% or 2% a day won't be unusual. So your £200k could easily drop to £196k the next day just on random fluctuations. That's something you'll have to get used to (or just don't look very often )

bigfreddiel

If you don't like the IFAs fees why are you contacting any!

They only offer advice so there is no come back if it all goes pear shaped.

They also work in a closed shop in some products like pensions, so you have no choice.

In reality investing is relatively simple as long as you understand a few basic rules. Of course a professional doesn't like being told their job and advice is actually just common sense.

So follow these simple rules and all will be good, and this is free advice so probably worthless, but you decide and maybe pay someone for similar but wrapped up in jargon that makes it sound good.

1 Don't time the market. Time in the market not timing the market.
2 Keep fees to minimum use low cost trackers and etf's
3 Create a balanced portfolio bonds, property, equities - no more than ten will do - decide on UK/Global mix
4 LEAVE IT ALONE once set up

And that's it, beginners sell as soon as things look bad, when in fact you should be buying.

Just get on with it

Good luck fj

eskbanker

bigfreddiel wrote: »

3 Create a balanced portfolio bonds, property, equities - no more than ten will do - decide on UK/Global mix
4 LEAVE IT ALONE once set up

There's no right and wrong answer for this sort of thing but the most common recommendation for a 'fire and forget' starting DIY investment for a novice is one of the multi-asset funds, rather than trying to create a bespoke portfolio and then having to rebalance manually thereafter (or risk too much variance from desired mix).

dunstonh

They only offer advice so there is no come back if it all goes pear shaped.

That is wrong. Consumer protection exists for bad advice.

They also work in a closed shop in some products like pensions, so you have no choice.

That is also wrong.

2 Keep fees to minimum use low cost trackers and etf's

The op appears to be an inexperienced investor. Yet you are suggesting they use more advanced options.

3 Create a balanced portfolio bonds, property, equities - no more than ten will do - decide on UK/Global mix

And what model is the OP going to use? Surely you are not suggesting a random amount in each sector?