Investing a largish sum of money

investorj

I've recently come into around £40,000 and am looking to investing it in the near future.

I've been focusing my efforts on Property (buy-to-let in Stratford, East London hoping that regeneration will hike up prices here), but I'm getting negative vibes the more I read about the looming decline in house prices. I've gone as far as to make an offer on a property, with the rental income + fees breaking even on interest only payments...Not ideal, I know...

Any suggestions of what else I could do with the £40k?

*There is a catch: I'm not interested in putting it in a high-interest savings account / accruing interest on the money!*

Thanks!

dunstonh

You mention investing so that means a minimum term of 5 years. Ideally 10.

Are you happy to tie the money up for that sort of timescale?

investorj

Yup...a medium to long-term investment, 5-10 years seems just about right.

I've also been looking at investment funds, and correct me if I'm wrong, but some funds (e.g., JP Morgan Nat. Resources) offer a 200%+ return over 5 years (that's what their estimates are anyway)...what's the catch???

cheerfulcat

investorj, I think that you must be looking at past performance - funds don't estimate forward performance!

investorj

Agreed, and I understand it's no indiciation of future performance...

I guess its relatively high risk which is why I haven't already invested anything in...

Any other ideas? what's the general consensus on property these days?

cheerfulcat

FWIW I have a large part of my portfolio in commodities ( 50% ) and expect them to do well over the next few years. It is a riskier area than some, though.

I wouldn't be too keen on property or bonds right now as I think that both are still over-valued. Large UK companies ( perhaps something like an equity income fund ) and Asia seem attractive still.

HTH

Cheerfulcat

dunstonh

Any other ideas? what's the general consensus on property these days?

No different to what it has been for last 12 months. Going down.

meester

dunstonh wrote: »

No different to what it has been for last 12 months. Going down.

commercial property is a little different though.

Residential property is pretty much a laughing stock now, Stratford is a hole and always will be.

But people wanting to invest in property have bought commercial property funds thinking that they represent the residential property market but they do not.

Prices in commercial property funds have been cut quite nicely compared to the jokers still asking £300k+ for high rise council flats in London (yes, really). And you won't have to replace any carpet or mend any boilers.

Hillwalker

I'm in a similiar position to the OP.
So how do you get started in "investing in commodities"

Aegis

investorj wrote: »

Yup...a medium to long-term investment, 5-10 years seems just about right.

I've also been looking at investment funds, and correct me if I'm wrong, but some funds (e.g., JP Morgan Nat. Resources) offer a 200%+ return over 5 years (that's what their estimates are anyway)...what's the catch???

That's a nice fund as part of the high risk portion of your portfolio, but putting all your money into it would be inadvisable unless you like having all your eggs in one very shaky basket!

If you're looking to invest seriously rather than simply speculating on what might be the next big thing, then you'll be wanting to diversify across a number of sectors and geographic areas, preferably in funds managed by teams with a strong performance history in both good times and bad. You can also get exposure to commodities via ETFs (or funds which invest in a variety of ETFs) and property (via investment trusts) if that suits your investing style.

Don't forget that in uncertain times, if you put everything into high-risk assets, you might be looking at drops of 50% or more in a very short time, so don't stick everything into funds like the JPM Natural Resources one you mentioned before if you're not comfortable with that sort of risk!

dunstonh

Prices in commercial property funds have been cut quite nicely compared to the jokers still asking £300k+ for high rise council flats in London (yes, really). And you won't have to replace any carpet or mend any boilers.

Commericial property fund is looking more attractive but I dont think we are at the bottom yet. Not far would be my guess. Some believe that property shares are near or at the bottom.

I took the OP to mean residential property in his post. There is only one way that is heading.