50K to 100K to invest

panos_k75

Hi,

I currently have 50K to invest. I already have another 50K sitting on saving accounts/cash ISAs. I don't have any debts and the mortgage is being paid off. I am debating if I need to put all the funds into saving accounts and forget about them or do something different? I am also considering asking advice from an IFA.

Unfortunately I am not familiar at all with the different finiancial products out there. I have always used saving accounts in the past, which are ok, but I am worried that my money get's "eaten up" by high inflation. However, given the current market fluctuation, I may be better off waiting a little bit? Friends have said to me that cash is the king right now...so I am confused.

I would appreciate any help or advice you could provide.
Thanks,
Panos

p.s. sorry in advance for my spelling/grammar mistakes.

notis7

Pano, one thing not to do is remove your money from your ISA's - This is tax free and probably gives you a high return. Have a look at the best paying ISA's and then go on to your banks web page and look at the rate your bank is paying for the amount you have saved in your ISA's. If it is lower TRANSFER your ISA's. I'll give you an example - Halifax Fixed ISA - 4 year is paying 6.20% - very hard to beat plus there is no block on transfers in!!!!

As for the remaining £50K - Fixed rates are now paying a great deal higher than LIBOR and base. I suggest you look again at the Halifax or Nationwide for a 4 year fixed offer and tie in with them - rates are quite high ( a bit lower than 1 year offers) but it will be a greater rate considering that speculators believe that base will drop 75bps by the end of the year (Barclays)

Dont worry about the £35K limit because we need to be realistic - no country will allow its biggest savings providers to topple and the bigger the bank the better!!!!

p.s. ξέρω τι σου λέω

Moggles_2

I have the Halifax 4 year fixed-rate Cash ISA noted above.
https://www.halifax.co.uk/isas/fixedrateisa.asp

Also, Nationwide's 2 year Cash ISA fix
http://www.nationwide.co.uk/savings/rates.htm

Have you considered the index-linked National Savings certificates for at least some of this money?

sorry in advance for my spelling/grammar mistakes.

Not much the matter with your spelling/grammar. "gets" doesn't need an apostrophe though

Moggles_2

Btw, how would you translate this?

Originally Posted by notis7
ξέρω τι σου λέω

I know what I'm talking about

panos_k75

It looks like savings is my best option....If I decided to use an IFA, how does this work exactly?

Are they going to give me just some piece of advice, or could they also manage the funds for me? If it's only advice and I follow it, and then after one year it turns out that there is better product out there, how do I get to find about this? Is it their responbility to keep me updated or is it more like an one-off type of interaction? Likewise, if the market conditions change. Do they track my funds and ensure I get the best return?

dunstonh

It looks like savings is my best option....If I decided to use an IFA, how does this work exactly?

IFAs are investment advisers. Not savings advisers. Whilst we do have savings options in offshore bonds and can arrange some deposits, the amount in question here is not really in that sort of territory. We would basically look at money facts and tell you which rates are currently the best for you. Something you can do yourself online.

Are they going to give me just some piece of advice, or could they also manage the funds for me?

If you were investing and not saving, the IFA is then in their main area of business so the advice on what to do and where will be given.

If it's only advice and I follow it, and then after one year it turns out that there is better product out there, how do I get to find about this? Is it their responbility to keep me updated or is it more like an one-off type of interaction?

Again, looking at investments, a servicing IFA will review and report and make recommendations. A transactional IFA would just be a one off transaction to place the business and it would be your responsibility to contract them again to review. Some transactional IFAs will contact again in future but there is no formal agreement to do so.

Do they track my funds and ensure I get the best return?

Again with investments, the best returns available may not be suited for you. Last year the "best" returns in the short term came from the highest risk funds. The IFA will discuss your aims and objectives for investing and decide how the portfolio should be built from there. Sometimes second quartile consistency is more suitable than 1st quartile outperformance aims which may not always pay off.

However, most of that is with investments and not savings.

panos_k75

Thanks for the reply.

I didn't make it very clear in my previous post, but yes I was refering to investment oppurtunities rather than savings....If I take the saving route I am pretty sure I can handle this myself.

I guess what I am asking is if, for this amount of money and given the current market and housing conditions, is worth looking at investing, rather than just saving?

notis7

Moggles wrote: »

Btw, how would you translate this?



I know what I'm talking about

yes - exactly

dunstonh

I guess what I am asking is if, for this amount of money and given the current market and housing conditions, is worth looking at investing, rather than just saving?

Investing doesnt just mean stockmarket. There are other asset classes as well. Plus, stockmarket is not all one thing. There are some areas of the stockmarket that offer good potential in the short term and some that offer bad. However, you dont invest for the short term. There is always good news and bad news. Ups and downs are normal in the short term. If you are concerned then you just reduce the risk you are taking.

Twice you have referred to current market conditions but what do you mean by that. The FTSE is only around 13% off its high point. Thats nothing. The tech stocks crash saw it drop 45%. If you invest for 10 years you will probably see two major drops and a larger number of short term [around] 10% drops. So, if this one scares you for some reason then that should be reflected in your risk profile and how you invest.

panos_k75

Could you please elaborate on "short" and "long" terms? Also is it right to assume that the shorter the term the higher the risk? Finally, do you think I should be consulting an IFA about this, or should I just follow everybody else's advice and put the funds on some sort of savings account with the vew to review the situation when the market is a little more stable?

dunstonh

Could you please elaborate on "short" and "long" terms?

short is less than 5 years. Medium is 5-10(ish) and long term is 10 years plus.

Also is it right to assume that the shorter the term the higher the risk?

yes

Finally, do you think I should be consulting an IFA about this, or should I just follow everybody else's advice and put the funds on some sort of savings account with the vew to review the situation when the market is a little more stable?

Its up to you. Its a personal choice. Investments go down as well as up. Typically zig zagging in an upward position. people that invested in April are about 4-5% up now in just one month (on medium risk) but if you look at those that invested in 2007, then chances are they are in a negative position.

You either accept the zig zags (which you can control the volatility to some degree by not going high risk and diversifying) or you stick with savings and realise that you are not really getting any real terms growth as inflation is more or less cancelling out the interest.