£350K down the swanny

chucknorris

Varrko wrote: »

So how would you mitigate this? I refuse to believe anyone offering 6% returns must automatically be a scam?

I recently invested just over £500k (all of my SIPP and ISA) in British land shares, which provided dividend income of 6%. But after the price went up I decided to take £20k and re-invest back into an ETF index. I wish that I had stayed in a bit longer now, as I could have taken about a £50k profit, but that is just hindsight talking, at the time I was happy with £20k, and my motto is 'nobody ever went skint taking a profit'.

I did exactly the same 2 years ago, and took a £20k profit then too.

bostonerimus

Varrko wrote: »

So how would you mitigate this? I refuse to believe anyone offering 6% returns must automatically be a scam?

Then you are being naive.

You can avoid issues by sticking to large, well known and respectable platforms and buying funds offered by large, well known and respectable investment firms....see the pattern.

Eco_Miser

Yet Chuck Norris has just given an example of a legitimate 6% return. And 6% is not so much bigger than the 5% headline rate still being offered by some banks and building societies (admittedly on small amounts and with many restrictions), so it's not obviously in the 'too good to be true' class.
And the OP says they checked with the FCA first.

atush

Well i dont know anyone other than say company bonds offering that much. No bank accounts are.

But you go in knowing the company could fold and you'll be left with nothing.

Prism

Eco_Miser wrote: »

Yet Chuck Norris has just given an example of a legitimate 6% return. And 6% is not so much bigger than the 5% headline rate still being offered by some banks and building societies (admittedly on small amounts and with many restrictions), so it's not obviously in the 'too good to be true' class.
And the OP says they checked with the FCA first.

That is still in the category of 'you could lose some or all of your money' though which isn't usually what people are after when looking for these kind of rates.

bostonerimus

Eco_Miser wrote: »

Yet Chuck Norris has just given an example of a legitimate 6% return. And 6% is not so much bigger than the 5% headline rate still being offered by some banks and building societies (admittedly on small amounts and with many restrictions), so it's not obviously in the 'too good to be true' class.
And the OP says they checked with the FCA first.

If you stick to big firms and big funds you might miss out on some legitimate opportunities as well as avoiding the scams. Its a good trade IMO.

Sailtheworld

Eco_Miser wrote: »

Yet Chuck Norris has just given an example of a legitimate 6% return. And 6% is not so much bigger than the 5% headline rate still being offered by some banks and building societies (admittedly on small amounts and with many restrictions), so it's not obviously in the 'too good to be true' class.
And the OP says they checked with the FCA first.

Chuck Norris took a significant risk and, on this occasion, was paid a risk premium which may, or may not, have been commensurate with the risk.

Our plucky investor didn't consider the risk. How do we know? Because his due diligence didn't extend beyond noticing a FCA number. He was promised low risk elevated returns - a contradiction and he was hooked.

Malthusian

Sailtheworld wrote: »

Which is, of course, the crux of the matter. A 5% premium over cash and David didn't consider (a) if that was too good to be true or (b) what sort of risk he might have to take to get that premium.

Or he did and the fake Bruckner Ferdindand gave him a convincing spiel about how the sort of risk he was taking wasn't the kind of risk that can result in you losing 100% of your money. It's not difficult.

David from Hemel Hempstead thought he was doing due diligence when he checked that he was using an FCA-registered firm. In fact that's exactly what Martin Lewis and everyone else tells people they should do before they invest their money.

Only a small number of people actually do due diligence and query their assumptions all the way down. Everyone else gets lucky. When someone gets unlucky everyone else says "it's their fault, they shouldn't have been greedy" so they can sleep at night.

chucknorris

Sailtheworld wrote: »

Chuck Norris took a significant risk and, on this occasion, was paid a risk premium which may, or may not, have been commensurate with the risk.

I didn't think that the risk was that significant, and although it was a substantial amount it was less than 8% of our portfolio. Although of course there is always going to be more risk with a single company share than with an index. But British Land holds substantial properties and although the retail sector in particular is facing headwinds, I considered that to have been priced in at the price that I paid. Ditto to a lesser extent with Brexit possibly affecting London office yields.

My gut instinct was telling me to remain invested, but as it was my all of my ISA and SIPP, I thought it better to play it boringly safe. I did however leave my £40k unwrapped investment there, now worth £46k.

chucknorris

Prism wrote: »

That is still in the category of 'you could lose some or all of your money' though which isn't usually what people are after when looking for these kind of rates.

No it isn't! Please read my post above to explain why. I have invested money in more riskier investments, but I'm sorry British Land does not fit that category.