£50k - For 5 to 8 years?

RolandFlagg

I have my long term (15-20 years) growth funds in isas and sipps sorted out. I can forget about these and I don't mind any volatility.
This leaves £70k in the bank earning very little interest.
My mortgage will be paid off soon, and my outgoings are tiny, so I really only need £20k in instant access accounts. But I don't want to put any more in my more aggressive long term accounts.
So I want something in-between to put the £50k for a few years that will hopefully give 3-5% a year (I don't need monthly income), but can be got at fairly quicker if any unexpected event happens, even if it turns out I have made a small loss on them (I know nothing is risk free)
I'm not a fan of p2p lending or premium bonds, so I'm looking at Vanguard Lifestrategy 40/60, Ballie Gifford High Yield bond accounts, and Berkshire Hathaway stock.
Any of those good options? Or any other alternatives?
Thanks.

MaxiRobriguez

I'd personally avoid the VLS 40/60 as you're just holding back equity gains with expensive bonds which are ripe for losses if inflation really picks up. Gifford High Yield bonds you'll need to do some digging under the hood but they're likely to be riskier than what it appears you want (considering you're shifting money from a savings account).

Other option may be a UK defensive dividend fund, or create one your own - one that has stocks like Unilever, Diageo, GSK, RB, BAE etc - you should be able to get a decent global coverage from those stocks across various sectors, and hit a dividend yield of about 4%, and the volatility shouldn't be as much as Berkshire Hathaway alone. What you will get with that is a load of posters in the next few hours telling you how rubbish UK stocks are.

MichelleN

MaxiRobriguez said:

I'd personally avoid the VLS 40/60 as you're just holding back equity gains with expensive bonds which are ripe for losses if inflation really picks up. Gifford High Yield bonds you'll need to do some digging under the hood but they're likely to be riskier than what it appears you want (considering you're shifting money from a savings account).

Other option may be a UK defensive dividend fund, or create one your own - one that has stocks like Unilever, Diageo, GSK, RB, BAE etc - you should be able to get a decent global coverage from those stocks across various sectors, and hit a dividend yield of about 4%, and the volatility shouldn't be as much as Berkshire Hathaway alone. What you will get with that is a load of posters in the next few hours telling you how rubbish UK stocks are.

GSK is very volatile and the share price is down over 25% in this past year. They are also reducing the dividend next year.

It’s not anything to do with how ‘rubbish’ UK shares are. I hold several in my portfolio including Unilever but even their share price is down around 20% from it’s year high so some UK shares seem to be suffering.

Sally57

MichelleN said:

MaxiRobriguez said:

I'd personally avoid the VLS 40/60 as you're just holding back equity gains with expensive bonds which are ripe for losses if inflation really picks up. Gifford High Yield bonds you'll need to do some digging under the hood but they're likely to be riskier than what it appears you want (considering you're shifting money from a savings account).

Other option may be a UK defensive dividend fund, or create one your own - one that has stocks like Unilever, Diageo, GSK, RB, BAE etc - you should be able to get a decent global coverage from those stocks across various sectors, and hit a dividend yield of about 4%, and the volatility shouldn't be as much as Berkshire Hathaway alone. What you will get with that is a load of posters in the next few hours telling you how rubbish UK stocks are.

GSK is very volatile and the share price is down over 25% in this past year. They are also reducing the dividend next year.

Agreed, it’s been a tough year for GSK shareholders and the share price seems to be on a ever decreasing downward spiral.

MaxiRobriguez

Even with a reduction the yield should still meet the criteria set by the poster. GSK has performed badly this year but for the last 8 years has traded between 1400 and 1700 apart from a couple of short periods above and now below. 

For GSK, the op could ride a 50% dividend cut and 0% growth for 5-8 years, and still meet his 3-5% annual target.

I also suggested holding it as part of a basket of funds, not by itself. 

Thrugelmir

RolandFlagg said:

 so I'm looking at Vanguard Lifestrategy 40/60, Ballie Gifford High Yield bond accounts, and Berkshire Hathaway stock.

None of which are guaranteed to provide you with a positive return over that time frame. 

Moe_The_Bartender

Thrugelmir said:

RolandFlagg said:

 so I'm looking at Vanguard Lifestrategy 40/60, Ballie Gifford High Yield bond accounts, and Berkshire Hathaway stock.

None of which are guaranteed to provide you with a positive return over that time frame. 

What is? 

Incidentally, £50,000 would buy about one fifth of a Berkshire Hathaway share unless you can find someone who deals in fractional shares.

i8change

RolandFlagg said:

So I want something in-between to put the £50k for a few years that will hopefully give 3-5% a year (I don't need monthly income), but can be got at fairly quicker if any unexpected event happens, even if it turns out I have made a small loss on them (I know nothing is risk free)

CG Absolute Return (OEIC version of Capital Gearing Trust) achieves 5% regularly and Peter Spiller has a good long term track record in wealth preservation.

Dropped about 10% last spring in the Covid crash, but quickly recovered. No Acc version, so pays a small dividend which could be re-invested.

MichelleN

MaxiRobriguez said:

Even with a reduction the yield should still meet the criteria set by the poster. GSK has performed badly this year but for the last 8 years has traded between 1400 and 1700 apart from a couple of short periods above and now below. 

For GSK, the op could ride a 50% dividend cut and 0% growth for 5-8 years, and still meet his 3-5% annual target.

I also suggested holding it as part of a basket of funds, not by itself. 

I agree with you, however I was just saying certain UK shares (eg. GSK and Unilever) are not performing very well at the moment and seem to be struggling.

dont_use_vistaprint

Im in a similar position, I have around 60 in Marcus, 6 in CBS, 10 in Barclays Rewards. If you want 3%-5% without risk of the stock market losses you have be in property I believe and borrowing not saving, demand for rentals and purchases are oustripping supply

grumiofoundation

dont_use_vistaprint said:

Im in a similar position, I have around 60 in Marcus, 6 in CBS, 10 in Barclays Rewards. If you want 3%-5% without risk of the stock market losses you have be in property I believe and borrowing not saving, demand for rentals and purchases are oustripping supply

You might not be at risk of stock market losses but you think BTL (and/or other property based investments) is risk free? Do you think that 5-8 years is a good timescale for a residential lettings business?