23 year old with £10,000…

eskbanker

Exodi said:

ronaldadio said:

As little risk as possible but with some return 

It really would be a shame for a 23 year old with a 5+ year horizon, to put £10k into a 0.10% AER savings account.

If it's defintely going to be used for a house, a LISA would be a good idea. If not, perhaps chuck it into NS&I as virtually zero risk option.

Otherwise, consider increasing risk tolerance and invest in index funds - which I would still consider very low risk. If an index fund lost any significant value, I think there would be more to worry about than just your investment!

It isn't tenable to label index funds as very low risk, not least because there's a huge range of index funds, unsurprisingly when there are so many indices!  These will typically be equity-based, and 100% equities is very much not low risk, so many looking to get their feet wet with investing will do so via multi-asset funds where risk is lowered via the inclusion of other asset classes such as bonds to dampen volatility, or was it bond index funds that you had in mind?

grumiofoundation

Exodi said:

ronaldadio said:

As little risk as possible but with some return 

It really would be a shame for a 23 year old with a 5+ year horizon, to put £10k into a 0.10% AER savings account.

If it's defintely going to be used for a house, a LISA would be a good idea. If not, perhaps chuck it into NS&I as virtually zero risk option.

Otherwise, consider increasing risk tolerance and invest in index funds - which I would still consider very low risk. If an index fund lost any significant value, I think there would be more to worry about than just your investment!

As above low risk means different things to different people therefore not the best to be suggesting they are low risk (and also also above all 'index funds' weren't born equal).

Should also be highlighted that significant could mean different things to different people.

An 'index fund' of 100% equities (depending on the index) could easily lose 50% of its value in a relatively short period of time - I would say that is a significant amount. 

Exodi

I did say that 'I consider them' very low risk but I appreciate I should have worded this a lot more carefully. Especially with regards to the variety of index funds available.

grumiofoundation said:

An 'index fund' of 100% equities (depending on the index) could easily lose 50% of its value in a relatively short period of time - I would say that is a significant amount. 

I think you're coming at this from the other extreme - 100% equity ETF's tracking global indices (NASDAQ, FTSE, CAC, DAX, NIKKEI, etc) are very unlikely to lose 50% of their value in a short period of time, and if they did, as I said, I think there would be more to worry about than the investment since the world would presumably be on fire. Appreciate I should have been clearer on this though.