Safe fund beating savings accounts?

Prism

DiggerUK said:

"then I'm asking you to explain how to quantify volatility in simpler terms" .........eskbanker

I accept volatility, it exists, the universe is full of it. I just don't come up with half baked formulaic arguments  that claim it is predictable in any way shape or form in the financial world. 

Who pays attention to the Vix Index over the link you provided, they are both priestly financial incantations, nothing more.

It's a judgement call about how volatile markets will be going forward, there is no volatility crystal ball..._

Nobody knows exactly how volatile something will be but you can fairly accurately predict how volatile that thing will be compared to other things, based on past results. You can be at least sure enough to create a plan based on it, especially if the intention is to withdraw some or all of those assets in the next few years.

Sailtheworld

I can predict that the volatility of a cash account will be close to zero. As expected return increases we can predict volatility will increase too. This relationship will be fairly constant. There's no crystal ball but it's not difficult to see how smart people might be able to arrive at a formula which compares the two to give a handy comparison in numerical terms for the layman.

eskbanker

DiggerUK said:

I repeat, I made no accusation against eskbanker, in fact I pointed the finger at no one in particular.
If anybody feels the hat fits then it is their privilege to wear it..._

Riiiiiiiight, so you feel it's appropriate to just cast vague unsubstantiated aspersions without any idea who they might be applicable to?  Nice.

DiggerUK said:

"then I'm asking you to explain how to quantify volatility in simpler terms" .........eskbanker

I accept volatility, it exists, the universe is full of it. I just don't come up with half baked formulaic arguments  that claim it is predictable in any way shape or form in the financial world. 

Who pays attention to the Vix Index over the link you provided, they are both priestly financial incantations, nothing more.

It's a judgement call about how volatile markets will be going forward, there is no volatility crystal ball..._

So you don't actually have anything useful to contribute to help OP's desire to measure and compare risk then, you're just happy to shout down a valid attempt to do so and prefer the 'wet finger in the air' approach?

sebtomato

grumiofoundation said:

DiggerUK said:

sebtomato said:

eskbanker said:

sebtomato said:

Site likes Trustnet give a risk rating, but it's hard to know what it means.

Explained at https://www2.trustnet.com/learn/learnaboutinvesting/FE-Risk-Scores.html

Thanks, but not sure it means much to the average person likes me.
FE Risk score is relative to the volatility of leading 100 shares in the UK, so the FTSE100 would have a score of 100...
A score of 30 would therefore indicate a volatility 30% of the FTSE100.
Score is calculated of course on past performance (3 year rolling average).
Doesn't really translate well into actual risks to end customers like me...

My advice?....if you reduce the mortgage you are getting the best a guaranteed bang for your buck and you are increasing the equity you own in your home. That will at least increase your disposable income..._

If the OP isn't willing to a 5 year fix at 1.8% surely paying off the mortgage at 1.64% would also not be attractive to them? 

Put of interest how does overpaying a mortgage increase your disposable income?

Once the mortgage is fully paid up your disposable income increases but up until that point (if overpaying) you will have less disposable income. 

I already have 80% equity in my property, so the mortgage left is very small, and I have a lot more money to invest than its value. Therefore, paying off the mortgage is not the silver bullet, and is not a replacement for accessible money (within 3 to 6 months) anyway. Once money is paid, can't take it back (well, apart from remortgaging, which is not the simplest process). Same applies to a 5 year fixed savings account (too long of a commitment).

I ideally want some money earning more than a standard savings account (2%+), accessible within 3-6 months notice, and without risking too much the capital.
There must be some funds that have consistently returned 2%+ pa, without ever making a loss within a 3 or 6 months period. To reduce risk, I would also drip feed the investment.

Ideally, I want my investments into 3 buckets:
* Savings account for emergencies (earning 1%, available at short notice). Worth about 6 months of outgoings
* Safe investment earning 2%+ accessible at 3-6 months notice
* "Normal" investment funds (shares, bonds), which I already have, for longer term investments (but also can take years to recover from a crash)

SFindlay

sebtomato said:

grumiofoundation said:

DiggerUK said:

sebtomato said:

eskbanker said:

sebtomato said:

Site likes Trustnet give a risk rating, but it's hard to know what it means.

Explained at https://www2.trustnet.com/learn/learnaboutinvesting/FE-Risk-Scores.html

Thanks, but not sure it means much to the average person likes me.
FE Risk score is relative to the volatility of leading 100 shares in the UK, so the FTSE100 would have a score of 100...
A score of 30 would therefore indicate a volatility 30% of the FTSE100.
Score is calculated of course on past performance (3 year rolling average).
Doesn't really translate well into actual risks to end customers like me...

My advice?....if you reduce the mortgage you are getting the best a guaranteed bang for your buck and you are increasing the equity you own in your home. That will at least increase your disposable income..._

If the OP isn't willing to a 5 year fix at 1.8% surely paying off the mortgage at 1.64% would also not be attractive to them? 

Put of interest how does overpaying a mortgage increase your disposable income?

Once the mortgage is fully paid up your disposable income increases but up until that point (if overpaying) you will have less disposable income. 

I already have 80% equity in my property, so the mortgage left is very small, and I have a lot more money to invest than its value. Therefore, paying off the mortgage is not the silver bullet, and is not a replacement for accessible money (within 3 to 6 months) anyway. Once money is paid, can't take it back (well, apart from remortgaging, which is not the simplest process). Same applies to a 5 year fixed savings account (too long of a commitment).

I ideally want some money earning more than a standard savings account (2%+), accessible within 3-6 months notice, and without risking too much the capital.
There must be some funds that have consistently returned 2%+ pa, without ever making a loss within a 3 or 6 months period. To reduce risk, I would also drip feed the investment.

Ideally, I want my investments into 3 buckets:
* Savings account for emergencies (earning 1%, available at short notice). Worth about 6 months of outgoings
* Safe investment earning 2%+ accessible at 3-6 months notice
* "Normal" investment funds (shares, bonds), which I already have, for longer term investments (but also can take years to recover from a crash)

Bottom line here is you've had all the answers and advice you're going to get, just because you don't like them doesnt mean they are going to change and someone suddenly is going to give you the answer you want!! 

Let's take a couple of your points   
"There must be some funds that have consistently returned 2%+ pa, without ever making a loss within a 3 or 6 months period."
You may have noticed the world has just gone through a bit of a crisis therefore things have been a little volatile (am I allowed to use that word? It's not too much like gobildiegook I hope) so what 3 to 6 month period do you wish to consider? The 3 months ending now where theres been an upturn (personally my ISA only invested on 10th April 2020 currently has 6.51% return) or should we look at the 3 months ending mid March (everyone's investments will have taken a knock). You will get VERY different looking set of results yet it's only over a 2 month period!! You seem to be wanting someone to tell you this fund or that fund is where you should invest for this low risk guaranteed amount, well people can soon give you their best performing current funds and yes I could tell you what's in my ISA that's giving me 6.51% but then again has that in the short term already peaked and about to plummet along with next wave of covid 19?? Who knows and that's the whole point of what people are saying to you, the fact you choose to ignore the sound advice given and keep going on about "I want" is what's led to people being accused of bullying!! 

"Safe investment earning 2%+ accessible at 3-6 months notice"
You continue with this "safe investment earning 2% +" which has been discussed to death so time to realise you're living in a dream world if think going to get this. If it was out there we would all be into it and you wouldn't need to ask on this forum as it would be all over the MSE best buys!! You have to remember even before all the recent events you weren't getting 90 days notice accounts (your required minimum 3 months notice) paying 2% so there is absolutely no  chance now!! 

AnotherJoe

sebtomato said:

I ideally want some money earning more than a standard savings account (2%+), accessible within 3-6 months notice, and without risking too much the capital.
There must be some funds that have consistently returned 2%+ pa, without ever making a loss within a 3 or 6 months period. To reduce risk, I would also drip feed the investment.

Why "must" there be?? I know no reason why there must be.

I also see you change tack from one sentence to the next, you jump from "without risking too much" to "without ever making a loss".

Those are very very different things.

sebtomato said:

Ideally, I want my investments into 3 buckets:
* Savings account for emergencies (earning 1%, available at short notice). Worth about 6 months of outgoings
* Safe investment earning 2%+ accessible at 3-6 months notice
* "Normal" investment funds (shares, bonds), which I already have, for longer term investments (but also can take years to recover from a crash)

In the immortal words of the Rolling Stones