My Cash Investment Strategy - Comments Appreciated.

Bulwark

Each year I have invested my whole ISA allowance in stocks and shares. On top of this, In order to have emergency cash funds available I have gradually also bought 1 year fixed savings bonds and  now have £10,000 to £20,000 maturing each month of the year. My idea is that I would have this amount of cash available each month for any emergencies before putting it back into the next 12 month bond. 

Just for a change and for consolidation, I have opened a new Invest Engine ETF General Account and will re-direct my monthly payments from the savings bonds to buying a monthly equivalent amount of  IShares 'ERNS'. Am I being sensible?

Any comments and advice on my new strategy will be very much appreciated.

Robert  

Albermarle

As we have no info about you at all, it is impossible to make any sensible comment. How about supplying more info?
Age? Married? Children? Salary? Retirement plans ? Monthly expenditure? Pension provision? etc etc

dunstonh

Any comments and advice on my new strategy will be very much appreciated.

You have told us the solution you have decided on for your objectives. 
However, you haven't told us your objectives.
effectively you have asked us if the answer to a question is right without telling us what the question is.

There is also some background info missing.  For example, the pension wrapper beats the ISA wrapper for most people.   You say you have been using the ISA wrapper but no reference to the pension wrapper.  Why?  Are you over 75?

El_Torro

While I agree with Albermarle and dunstonh about needing more information I do have some comments:

You seem to have a lot of money tied up in bonds in order to act as your emergency fund. At least £100k, if not a lot more than that. How big does your emergency fund need to be? Would it not be better to have an appropriate amount of cash and then invest the rest? Of course if you are already retired then the amount of appropriate cash is probably a lot higher than if you are 40 years old with no plans to retire in the next 20 years. Hence the comments about needing more information. 

I also agree with dunstonh about pensions: ISAs (either Cash or Stocks & Shares) are useful and have their place, however pensions are more powerful tools for saving for the future in many cases.

Bulwark

Yes more information (sorry, I am always a 'bit' reluctant to give out my personal details to strangers, but happy to make an exception in this case).

I am 74 retired and in a Civil Partnership (30 years no children). I receive an Index linked Civil Service Pension, rental income from one property and of course mu OA pension, this all comes to about £4,5OO a month after tax. Expenditure, just Council Rates and food, - say £300. No particular plans on horizon, every thing is 'ticking over nicely'..     

Bulwark

PS. I suppose I should of mentioned that I have built up over the years about £300,000 in a stocks and a shares ISA..

El_Torro

You have an income after tax of £4,500 a month and your expenditure is £300 a month? If so it probably doesn't matter too much what you do, you're not going to run out of money. Are you sure you are spending £3,600 a year? I don't know anyone in the UK who gets by on that, even those who are living in a property they own with no mortgage.

It's prudent to have a healthy amount in case you go into a care home, other than that you seem pretty set (assuming what you say is correct).

If you don't need this £300k for anything then there are various ways to look at it. You could take more risk since you don't need to dip into it, or you could remain low risk, since you don't need to take risks to meet your goals. Personally I would invest at least £100k of it (maybe in a 60/40 multi asset fund, no need to go any riskier), but you might not want to do that, especially if you don't have experience of investing in stocks & shares.

Considering your plan to put the full £300k in a short term bonds fund, my concern is that it might not keep up with inflation. Even if it doesn't this probably won't matter, you won't run out of money anyway.

One thing to consider is your partner, especially if you die first. Will they inherit your Civil Service Pension? If not can they get by OK without it?

ColdIron

Bulwark said:

Expenditure, just Council Rates and food, - say £300

That seems remarkably low. I spend £436 on Council Tax, Electricity, Water, Broadband and phone alone, and at least £350 on food. Small flat, single, retired and no mortgage. Then there are less frequent bills, insurance, TV license fee, clothing, dentist, optician etc

Bulwark

Thank you for your reply El_Torro. No it is not the £300,000 I am thinking about it is the 12 x 1 year Savings Bonds plus any surplus  spare cash. I wondered about ERNS  for this, but understand
 this may not keep up with inflation. 

The other £300,000 in my Stocks and Shares ISA is no doubt another problem as it contains things like GSK, WPP, Capital Gearing, Amundi MSCI India, Tesco etc.

Bulwark

Yes, I think you are right ColdIron, I am sure my overhead expenditure is more then my estimate. The trouble is it goes up and down and I have never totalled  it up on a yearly basis..I am lucky that most Capital items are paid for now e.g.  House, Car etc. Maybe it should be double my previous figure. 

brucefan_2

Bulwark said:

Yes more information (sorry, I am always a 'bit' reluctant to give out my personal details to strangers, but happy to make an exception in this case).

I am 74 retired and in a Civil Partnership (30 years no children). I receive an Index linked Civil Service Pension, rental income from one property and of course mu OA pension, this all comes to about £4,5OO a month after tax. Expenditure, just Council Rates and food, - say £300. No particular plans on horizon, every thing is 'ticking over nicely'..     

£300 monthly outgoings only?

What about Utilities, Landline & Broadband, Insurance Payments, Vehicle fuel costs? 

Are these all covered by your partner or do you need to recalculate?