Sensible low risk investment

jake_jones99

reply to dunstonh (it blocks the reply if I quote you, weirdly):


As I said before, it's a high risk compared to bonds, but a low risk compared to investing in individual shares, that can drop a lot more than 50% in one year. Yes, I am very much aware of those drops, that is precisely why I chose to invest after the COVID drop. I indeed "timed the market", and not only once, but 4-5 times in buy/sell actions that were all in profit. No, I would not do this with my family's money, and that was precisely my point.

jake_jones99

bostonerimus said:

jake_jones99 said:

dunstonh said:

as before I invested in a passive fund tracking FTSE100

That is very poor quality investing if that is your only risk based investment.   Very little diversification and a very active decision to only invest in UK large caps.

 Ideally I would want to move and invest in property. 

....at a time when the Government is expected to continue hitting landlords.

What other funds do you have as £100k isn't much to get low-risk property portfolio.     Low risk tends for property tends to occur when you have around 5-6 properties or more.

Would you have other sensible low risk alternatives?

Investing in the FTSE100 as you did was high risk.  So, what has changed in your circumstances that high risk previously but only low risk now?

Can you explain how it's not diversified and high risk? It distributes the investment in 100 different companies, and it changes slower than most other investments. I cannot handle sharp changes psychologically. It offered also a regular dividend payment.
Maybe you can give an example of low risk that would clarify it.

You want to have a range of risk that allows you to benefit in good times and also preserves some capital in the bad times. Your pension and an ISA are the most tax efficient ways to do that. Putting money into FTSE100 is a small section of the world economy. You should be invested in the global equity and bond markets with 6 months to a year of cash in the bank for emergencies. If you want to invest in property I would start with your own mortgage and maybe REITs while you evaluate all the intricacies of owning rental properties.

That is good advice, thanks, I think it's probably good to play with REIT with my own money, and use all money for a mortgage deposit when I finally decide where I want to live. However, until then, I am thinking how to protect my donation from inflation erosion, for which I might be considering bonds, if I decide they're safe enough. If not, probably saving accounts, which at least slow down a bit inflation.

grumiofoundation

jake_jones99 said:

Billycock said:

jake_jones99 said:

Hi everyone, I have around £120k available to invest. Around £50k are already in a stocks and shares ISA, as before I invested in a passive fund tracking FTSE100 and made around £10k in the past year. However, I feel that ship has sailed and sold all shares. Ideally I would want to move and invest in property. Would you have other sensible low risk alternatives?

Are you saying you made a 20% gain on your 50K S&S ISA in one year?

To be fully precise, it was 1.5 years. But I started with 20k in my Stocks and Shares ISA in April 2020, put in 20k more in April 2021, and the extra £10k are profit. There were around 4-5 buy/sale actions, all in profit. Yes, I "timed the market", I am an irresponsible trader. Before anyone says anything, no, I wouldn't do it with someone else's money.

You said earlier "I cannot handle sharp changes psychologically." but you invested in the FTSE 100 directly after a >30% drop. So it is not unrealistic to assume this could happen again.

wmb194

Billycock said:

jake_jones99 said:

Billycock said:

jake_jones99 said:

Hi everyone, I have around £120k available to invest. Around £50k are already in a stocks and shares ISA, as before I invested in a passive fund tracking FTSE100 and made around £10k in the past year. However, I feel that ship has sailed and sold all shares. Ideally I would want to move and invest in property. Would you have other sensible low risk alternatives?

Are you saying you made a 20% gain on your 50K S&S ISA in one year?

To be fully precise, it was 1.5 years. But I started with 20k in my Stocks and Shares ISA in April 2020, put in 20k more in April 2021, and the extra £10k are profit. There were around 4-5 buy/sale actions, all in profit. Yes, I "timed the market", I am an irresponsible trader. Before anyone says anything, no, I wouldn't do it with someone else's money.

So your gain was actually 10K on a 40K investment over around 18 months. A 25% gain within FTSE 100? Nonsense!

Why? FTSE100 as I type is 7593 and the pandemic panic low in March 2020 was 4898. There have been plenty of opportunities to make the stated gain and more.

Albermarle

eply to dunstonh (it blocks the reply if I quote you, weirdly):

Nothing personal , it does this from time to time . A bug in the forums software I guess.

To confirm previous comments . Just because you are based in UK , you should not be 100% invested in UK stock market.

The ideal % for UK in a portfolio is debatable , but usually it is somewhere between 4% and 40% 

jake_jones99

grumiofoundation said:

jake_jones99 said:

Billycock said:

jake_jones99 said:

Hi everyone, I have around £120k available to invest. Around £50k are already in a stocks and shares ISA, as before I invested in a passive fund tracking FTSE100 and made around £10k in the past year. However, I feel that ship has sailed and sold all shares. Ideally I would want to move and invest in property. Would you have other sensible low risk alternatives?

Are you saying you made a 20% gain on your 50K S&S ISA in one year?

To be fully precise, it was 1.5 years. But I started with 20k in my Stocks and Shares ISA in April 2020, put in 20k more in April 2021, and the extra £10k are profit. There were around 4-5 buy/sale actions, all in profit. Yes, I "timed the market", I am an irresponsible trader. Before anyone says anything, no, I wouldn't do it with someone else's money.

You said earlier "I cannot handle sharp changes psychologically." but you invested in the FTSE 100 directly after a >30% drop. So it is not unrealistic to assume this could happen again.

True, however, I feel more confident to invest after a drop than for example now, when it's at an all time high. 

jake_jones99

jake_jones99 said:

grumiofoundation said:

jake_jones99 said:

Billycock said:

jake_jones99 said:

Hi everyone, I have around £120k available to invest. Around £50k are already in a stocks and shares ISA, as before I invested in a passive fund tracking FTSE100 and made around £10k in the past year. However, I feel that ship has sailed and sold all shares. Ideally I would want to move and invest in property. Would you have other sensible low risk alternatives?

Are you saying you made a 20% gain on your 50K S&S ISA in one year?

To be fully precise, it was 1.5 years. But I started with 20k in my Stocks and Shares ISA in April 2020, put in 20k more in April 2021, and the extra £10k are profit. There were around 4-5 buy/sale actions, all in profit. Yes, I "timed the market", I am an irresponsible trader. Before anyone says anything, no, I wouldn't do it with someone else's money.

You said earlier "I cannot handle sharp changes psychologically." but you invested in the FTSE 100 directly after a >30% drop. So it is not unrealistic to assume this could happen again.

True, however, I feel more confident to invest after a drop than for example now, when it's at an all time high. 

Not yet all time, but pretty close

jake_jones99

Why? FTSE100 as I type is 7593 and the pandemic panic low in March 2020 was 4898. There have been plenty of opportunities to make the stated gain and more.


True. Actually I sold when it was 7000, and had plenty of opportunities to make more. I saw this general trend in the investing community to bash the FTSE 100. Indeed there could be higher profits made elsewhere, but it's not really that bad. 

Voyager2002

Note that your investment record (trading in the FTSE 100) was high risk and you were lucky. You are probably right to leave that game while you are ahead and to look for something that is lower risk.

The obvious suggestion is something from the Vanguard Life Strategy family, which combines shares in all companies on all stock markets with bonds: obviously the higher proportion of shares, the higher risk and so the greater chance of capital growth. That is likely to be safer than property, particularly putting all your money into direct ownership of just one property.

eskbanker

Billycock said:
Makes one wonder if you really do need to invest for 7+ years when probably 2+ years may suffice, depending on ones greed I imagine. 

It's all about risk - of course it's possible to make significant gains over short periods, but if you're planning to invest, without sight of future trends, then it's prudent to anticipate that the odds will be more in your favour if you do so for longer periods.  Bear in mind that there has been an extended bull run over many years now, with only occasional blips, and that it really isn't sensible to expect this to continue indefinitely....