Good Advice on Investment

Bargain_Hunter_12

Hello All,

I need some good advice on how/where to invest the savings that i make every month so i will get a very very......... Very good return not in the long term but say in 1-2 years time. I dont have any debt. if i am restrict myself i can save 300-500 pounds a month.

I am really looking forward for some really good and practical advice, my plan is to buy a house next year (London), i have a savings too say around £2000.

Hoping to see lots of good advice.

Advance Thanks

RS

cheerfulcat

Hi,

If you are saving towards a house purchase, the best option is really to put the money into a high-interest account; there are a couple of very good deals out there right now for regular savers; Halifax has one at 7%

http://www.halifax.co.uk/savings/home.shtml

The time frame you are talking about is really too short for equity investments.

If I were looking for something racier I would probably go for a small investment in a collection of small oil E&P companies with as much money as I was prepared to lose, but not *all* of it! Perhaps no more than 5%-10%. This is not advice :-), and DYOR.

HTH

Cheerfulcat

grumbler

Bargain_Hunter wrote:

...how/where to invest the savings that i make every month ...

Your best choice are regular saving acoounts - see link in a blue box above. For Halifax (7%) or/and HSBC (8%) accounts with fixed 1-year term move £3000 into cash-ISA when accunt(s) matures in a year, the rest - to some other saving account. After this you can continue using these accounts again. Derbyshire Regular Saving accounts pays lower interest (5.85%) but does not have fixed life term.

Bargain_Hunter_12

As i asked you guys for advice, i also asked few of my co-workers and they advised me to go for Mutual funds? is that a good idea at all is that a high risk gamble?

carnet

If your investment time horizon is only 1-2 years no-one should be suggesting "Mutual Funds" (as they are called in America) - known as Unit Trusts/OEICS in the UK.

These are really only suitable for the medium (5-10 years) to long-term (10 + years) as markets can be very fickle and over the short-term ie under 5 years, it would be very easy to lose money.

Debt_Free_Chick

carnet wrote:

If your investment time horizon is only 1-2 years no-one should be suggesting "Mutual Funds" (as they are called in America) - known as Unit Trusts/OEICS in the UK.

I thought they were more like our with(out) profits funds, but still not suitable

Debt_Free_Chick

grumbler wrote:

Your best choice are regular saving acoounts - see link in a blue box above. For Halifax (7%)

Agreed, but you can only put £250 pm into Halifax and Bargain Hunter has £300-£500.

Bargain Hunter - if can be absolutely certain of saving no less than £250 pm, then go with the Halifax Regular Saver. But you must commit to a regular amount, EVERY month, without fail!

If your savings above £250 are likely to fluctuate, you need a more flexible savings account with no commitment to save £x per month ... e.g. Bradford & Bingley .. but check out the Moneysupermarket link for the best rates.

cheerfulcat

Bargain_Hunter wrote:

As i asked you guys for advice, i also asked few of my co-workers and they advised me to go for Mutual funds? is that a good idea at all is that a high risk gamble?

The riskiness of mutual funds ( as carnet says, the American version of unit trusts/oeics ) depends entirely on where they are invested. But they are not suitable for short term investment.

Cheerfulcat

dunstonh

Some life companies refer to their in-house funds as mutual funds. These are certainly not appropriate for short term investing.

Any co-worker saying you should look at mutual funds really doesnt understand and isnt a good guide.

grumbler

Debt_Free_Chick wrote:

Agreed, but you can only put £250 pm into Halifax and Bargain Hunter has £300-£500.

I also mentioned HSBC. And there is another Regular Saver 5.85% up to £1000 p.m. in the article I quoted.

Bargain_Hunter_12

I have a better idea now where to put my hard earned savings. Thanks for all your guidance.