Investment Options

Grumpy_Old_Duffer

I've looked at various ways to make my money work for me myself, as I'm sure I can do better than the typical 5% interest PA offered by Savings Accounts.

PEP's were fine whilst they were growing (averaging around 25% PA) until, that is, recent years when the 'paper' loses in single years were greater than the 'paper' gains in the previous years. These are now recovering with typical growth of around the 25% PA again ..... but what might happen in a few years again!!!! I think, overall, the returns PA are only averaging a couple of percent over Savings Accounts rates

Bonds & ISA's tie-up your money for specific amounts of time (i.e. a year or more), which I'm not keen on, AND the returns aren't that brilliant. I expect an investment to double my money every 5 years.

Shares, I believe are a potential nightmare, as I know nothing about the terminolgy used and when to buy or sale. The work and software packages needed to do this is, I believe, are costly .... unless you know different!!!

"Stoozing" is currently working fine for me AND I don't even have to use my own money ... so I suppose shouldn't really be listed as "making my money work for me"!!!

Arbitrage Betting - lots of work for little return, and they usually involve some "obscure" Bookmakers, who will then start to restrict the amount you can bet, and with the 'Bots' out there, an Arbitrage bet is becoming harder to find AND you have to be very quick to compete against the 'Bots'.

Betting Exchanges - in the last few months Betfair have made available data of all the Betting activity on their site. I've looked at this data to determine some betting strategies and can make about 5% to 10% returns per month by selective betting.

All in all, I believe the best way I've found to make my money work for me is the Betting Exchanges. I know some will class this as "Gambling", but at the end of the day isn't most investments!!!

Would be willing to hear comments about the above, and willing to hear of investments strategies used by others.

carnet

Grumpy_Old_Duffer wrote:

ISA's tie-up your money for specific amounts of time (i.e. a year or more),

How so ? ISA's have no fixed period and can be opened for as long or short a time as you wish.

mbamick

Hi Grumpy,

I've tried most of the areas that you've covered, and also dabbled in Premium Bonds too. The latter is a risk-free option - 'cos ya can always get ya money back - and has given me a 4%-5% [tax-free] return over the last few years [very handy for a higher rate tax-payer].

But, the most significant factor with any investing strategy is your age, and life-status [married/single, no kids/kids at home/ kids flown the nest, working/retired], your attitude to risk and the amount you can afford to lose.
I'm a single bloke, with no kids; mortgage paid off, and sufficient cash tucked away for the unexpected problem.

You are quite right about PEPs, Equity ISAs & shares, etc; you really need to keep an eye on them. I try and review them once or twice a year. I then check the performance of my holdings against the List of Wealth 150 Funds maintained by Hargreaves Lansdown. I moved out of some of my UK & European-based PEPs a few years ago, simply because I'd read that China's economy was about to take off. Average return from those has been 30% per annum - so following the various economic cycles can be useful too.

PS.
Recently bought shares in STANELCO, which is a company that has developed a packaging system [you know, the supermarket meat & fruit containers with the cellophane tops] that is starch-based. They are half way through trials with Asda-Walmart, and all is going better than expected. Given the way that oil prices are going at the moment, the alternative starch-based packaging must have a lot going for it. It's also biodegradable, so the Greens will love it if it takes off.

dunstonh

PEP's were fine whilst they were growing

Peps do not grow or lose money. Nor does any other investment wrapper. Its what you place inside the wrapper that grows or loses money. In your case you have lost money (assumption based on your post). However, alternative fund/investments within the PEP may not have done.

Bonds & ISA's tie-up your money for specific amounts of time (i.e. a year or more), which I'm not keen on, AND the returns aren't that brilliant. I expect an investment to double my money every 5 years.

ISAs do not tie your money up for years and a number of bond providers have no exit penalty versions of their bonds. Returns are based on what you invest in and not the the wrapper you invest in.

Also, whats the difference between a PEP and an ISA as far as equities performance is concerned? None. Yet you treat them differently. Why?

You need to start thinking of the tax wrapper and the investment as two different things. Saying bonds or ISAs dont perform is extremely inaccurate. I can give you umpteen examples of bond funds that have exceed 15% a year returns for the last 5 years. Same with OEICS, Units Trusts, ITs and ISA funds. There are some that have doubled in a few years, let alone 5 (although given their risk, they could halve just as quickly)

Your requirement to double in 5 years is not impossible but if you look to do that with just a UK equity fund or lower (in the risk scale) it is unlikely you will achieve that nowadays with the current inflation rate.

Grumpy_Old_Duffer

carnet wrote:

How so ? ISA's have no fixed period and can be opened for as long or short a time as you wish.

I stand corrected.