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  • FIRST POST
    • jamesaf
    • By jamesaf 15th Apr 18, 8:07 PM
    • 14Posts
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    jamesaf
    How might you diversify this portfolio?
    • #1
    • 15th Apr 18, 8:07 PM
    How might you diversify this portfolio? 15th Apr 18 at 8:07 PM
    I'm after a little advice on how people might look to diversify a portfolio that is mainly gold and silver and cash (bank, low interest)

    Debt: 5,000

    Gold: Made (on paper) 1,400 with first ounce bought in 2010 and last 2016. I am only basing "made" on what the gold would cost to buy from the same place now, would get less.

    Silver: Lost 1,691 including purchase VAT So on the Gold/Silver front I actually managed to loose 285 over 8 years, obviously I bought Silver at bad times.

    1000 and 100 a month just put in Natwest invest

    3,000 in help to buy ISA

    11,000 in regular ISA (2.40 a month interest)

    If this was you would you get out of some of the gold/silver and take a hit? invest more cash into something like natwest invest? Thanks for any insight.
    Last edited by jamesaf; 15-04-2018 at 8:10 PM. Reason: spacing
Page 1
    • ValiantSon
    • By ValiantSon 15th Apr 18, 9:31 PM
    • 2,505 Posts
    • 2,427 Thanks
    ValiantSon
    • #2
    • 15th Apr 18, 9:31 PM
    • #2
    • 15th Apr 18, 9:31 PM
    Personally, I'm not a big fan of holding commodities as an individual, so I would steer clear of having gold and silver. If I were you then I would sell those holdings now and accept the 285 loss. (Normally I wouldn't advise selling assets at a loss, but I have an aversion to holding precious metals).

    I'd look at your debt. How much is that 5,000 costing you to service it? If it is more than you are earning in interest on your savings then it is a false economy to keep saving. Pay off the debt with money from your ISA.

    Your cash ISA is earning a pitiful rate of interest.(around 0.25%). Move this money (whether all 11,000, or the 6,000 left after paying off your debt) to a non-ISA savings account. You aren't earning enough interest to benefit from the tax exemption in an ISA. You have a 1,000 per year allowance for tax free interest (500 if a higher rate tax payer) and non-ISA accounts will pay more. If you think that you can lock it away then consider putting the money into a fixed rate savings bond for 1 year, where the best current rate is 1.8% with Atom Bank, Tandem Bank, or OakNorth Bank. Doing this will pay you 198 on 11,000, or 113.40 on 6,000. With your ISA you will earn 27.50, or 15.

    If you don't want to lock the money away then just put it into the best easy access account, currently paying 1.25% (Tesco Bank or Shawbrook Bank), which will earn 137.50 (11,000) or 75 (6,000).

    Alternatively, you could look at some of the interest paying current accounts and split your money across these. https://www.moneysavingexpert.com/banking/compare-best-bank-accounts#interest Be warned that BOS and Lloyd's are going to reduce their rates to 1.5% from July.

    Feeding money into a regular saver (or two, or three) will also increase your yield. See here: https://www.moneysavingexpert.com/savings/best-regular-savings-accounts

    What rate are you getting on the NatWest savings account? Is it their Savings Builder paying 1.5%? If so then this may be a better option for almost 4,000 of the ISA money if you aren't going to lock it away. You need to play their game, however, by paying 50 in each month (and then withdrawing it once interest is paid to keep the balance at an optimal level of 5,000). I'm not a fan of this account as it seems like more trouble than it is worth, but it will pay you 1.5% on 5,000 if you manage it well.

    If, however, you actually mean that you are putting money into investments with NatWest then I'd stop right now. The banks are usually a poor option for investments. Look at buying a multi-asset fund like Vanguard LifeStrategy; Blackrock Consensus; HSBC Global Strategy; or L&G Multi Index through a different platform. Compare these funds here: https://www.trustnet.com/
    Compare platforms here: http://monevator.com/compare-uk-cheapest-online-brokers/
    Last edited by ValiantSon; 15-04-2018 at 9:35 PM. Reason: Typo
    • jamesaf
    • By jamesaf 15th Apr 18, 9:42 PM
    • 14 Posts
    • 2 Thanks
    jamesaf
    • #3
    • 15th Apr 18, 9:42 PM
    • #3
    • 15th Apr 18, 9:42 PM
    Thanks ValiantSon

    It would probably be more than a 285 loss as I was basing that on my cost to buy now, but it hasn't really done much for me over 8 years (very poor silver purchases) I will look into liquidating at least some of that.

    The 5,000 is actually 0% credit card with a year left so paying 7% a month and then all of it in time.

    I might have rushed into the Natwest Invest (investments not savings account) with what you say and some other reading, only done it today so may try and cancel or move the monthly down from 100.

    I'll look over some of those links, seem my ISA is ridiculously low.

    The help to buy ISA pays a lot more interest than the cash ISA (though I don't know if the Government contribution at the end includes this interest)
    • ValiantSon
    • By ValiantSon 15th Apr 18, 9:48 PM
    • 2,505 Posts
    • 2,427 Thanks
    ValiantSon
    • #4
    • 15th Apr 18, 9:48 PM
    • #4
    • 15th Apr 18, 9:48 PM
    Thanks ValiantSon

    It would probably be more than a 285 loss as I was basing that on my cost to buy now, but it hasn't really done much for me over 8 years (very poor silver purchases) I will look into liquidating at least some of that.

    The 5,000 is actually 0% credit card with a year left so paying 7% a month and then all of it in time.

    I might have rushed into the Natwest Invest (investments not savings account) with what you say and some other reading, only done it today so may try and cancel or move the monthly down from 100.

    I'll look over some of those links, seem my ISA is ridiculously low.

    The help to buy ISA pays a lot more interest than the cash ISA (though I don't know if the Government contribution at the end includes this interest)
    Originally posted by jamesaf
    I'd stick with the Help to Buy ISA. The interest rate you are quoted doesn't include the government bonus. That bonus is paid on top when you make a qualifying house purchase. If you never buy a house (or you buy one that doesn't qualify, e.g. too expensive) then you can withdraw the money when you choose and take all of the interest earned with you.
    • jamesaf
    • By jamesaf 15th Apr 18, 9:56 PM
    • 14 Posts
    • 2 Thanks
    jamesaf
    • #5
    • 15th Apr 18, 9:56 PM
    • #5
    • 15th Apr 18, 9:56 PM
    Ah good to know, got 5.25 in 3,00 double the interest on the other ISA.

    I saw Natwest saver with 1.5% but their site seems bugged on sign up.

    Going to have to find out how to sell gold and silver for a decent price not cash converters!

    Thanks!
    • DiggerUK
    • By DiggerUK 16th Apr 18, 8:26 AM
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    DiggerUK
    • #6
    • 16th Apr 18, 8:26 AM
    You have been refreshingly honest
    • #6
    • 16th Apr 18, 8:26 AM
    Keep the gold, it would be valued at about 30 a gramme now if selling. (Were did you buy?)
    The silver was a bad mistake, have never regarded silver as a wise investment, and have counselled anyone I could not to go down that route. As a matter of interest, why did you go with silver.

    Your loss was with the silver, take it on the chin and sell. It would be best to learn the mistake. My money would buy some more gold if it is long term you are looking for, otherwise pay down that debt.

    You have enough to clear your debts, why have you still got debts..._
    I am not now, nor have I ever been, a Financial Adviser.
    'Forward to the British Spring' 'Viva Wikileaks'
    • cloud_dog
    • By cloud_dog 16th Apr 18, 9:38 AM
    • 3,800 Posts
    • 2,257 Thanks
    cloud_dog
    • #7
    • 16th Apr 18, 9:38 AM
    • #7
    • 16th Apr 18, 9:38 AM
    If this was you would you get out of some of the gold/silver and take a hit? invest more cash into something like natwest invest? Thanks for any insight.
    Originally posted by jamesaf
    Why do you have these 'investments'? What is your aim, what are you saving for?
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • jamesaf
    • By jamesaf 16th Apr 18, 5:39 PM
    • 14 Posts
    • 2 Thanks
    jamesaf
    • #8
    • 16th Apr 18, 5:39 PM
    • #8
    • 16th Apr 18, 5:39 PM
    The debt is interest free so will pay off over that period. The gold/silver is from barid and co (goldline.co.uk) I wanted it as a hedge against inflation and hopefully profit, I had the same idea with silver but seem to have bought far too high and it never went back (the VAT is a killer too) Idea for investments is to make more money or at least not loose buying power in crappy ISA's (easier said than done I know)
    • DiggerUK
    • By DiggerUK 16th Apr 18, 9:28 PM
    • 3,042 Posts
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    DiggerUK
    • #9
    • 16th Apr 18, 9:28 PM
    It is nice when things just work out
    • #9
    • 16th Apr 18, 9:28 PM
    jamesaf. Baird were the first company I used in a big way. Reputable. Hold the gold, sell the silver.
    Best of fortune..._
    I am not now, nor have I ever been, a Financial Adviser.
    'Forward to the British Spring' 'Viva Wikileaks'
    • cloud_dog
    • By cloud_dog 17th Apr 18, 9:35 AM
    • 3,800 Posts
    • 2,257 Thanks
    cloud_dog
    The debt is interest free so will pay off over that period. The gold/silver is from barid and co (goldline.co.uk) I wanted it as a hedge against inflation and hopefully profit, I had the same idea with silver but seem to have bought far too high and it never went back (the VAT is a killer too) Idea for investments is to make more money or at least not loose buying power in crappy ISA's (easier said than done I know)
    Originally posted by jamesaf
    Obviously, there is a huge amount of information that we do not know about you (age, income, savings, accommodation position, retirement planning etc) but, you seem to be a little 'confused' over what you are looking to achieve.

    You say you bought gold and silver as a hedge but then you are expecting it to behave like an investment and provide you with a return. PMs do not simply increase in value due to inflation, yes they probably should as they are an 'asset' class, but they (certainly gold) is based very heavily on demand pricing and in this environment of cheap money why would anyone tie up their money in an investment that doesn't in itself provide a return. Potentially, Au may be a good hedge at some point when the cheap money is taken out of circulation but who knows when, or if, those chickens will come home to roost.

    Is there a reason why you do not appear to hold any actual, real investments in stocks or shares, or funds?
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • grey gym sock
    • By grey gym sock 17th Apr 18, 4:35 PM
    • 4,444 Posts
    • 3,992 Thanks
    grey gym sock
    Is there a reason why you do not appear to hold any actual, real investments in stocks or shares, or funds?
    Originally posted by cloud_dog
    natwest invest is presumably in real investments. investment products sold by banks are generally poor value, but genuine investments. you could do better by switching that, plus any more you want to invest, into a cheap multi-asset fund on a cheap platform.

    some people include gold or silver as perhaps 1% or 2% of their investments, where it might add a bit of diversification. (though i don't hold any, myself.) but it should never be all or most of your "investments". ignore digger, who is the forum's resident gold nut. you have far too much gold & silver: just sell the lot.

    however, don't invest too much. cash has several purposes, so you may want quite a bit of it:
    - emergency fund, in case lose job / have unexpected expenses
    - to pay off credit cards, when 0% rate ends if you can't get more 0% rate
    - buying a home - especially if this might happen any time soon, because investments are better as a long-term thing
    • jamesaf
    • By jamesaf 19th Apr 18, 6:01 PM
    • 14 Posts
    • 2 Thanks
    jamesaf
    Thanks for the advice, will be looking to offload the silver at some point.

    In regards to natwest invest 1,000 has gone up 4.89 in a few days since opening so hopefully that continues! I won't be putting as much as I might have in it though.
    • redpete
    • By redpete 19th Apr 18, 10:19 PM
    • 4,268 Posts
    • 3,792 Thanks
    redpete
    In regards to natwest invest 1,000 has gone up 4.89 in a few days since opening so hopefully that continues! I won't be putting as much as I might have in it though.
    Originally posted by jamesaf
    Hopefully you're not actually basing investment decisions on the price move over 'a few days'.
    loose does not rhyme with choose but lose does and is the word you meant to write.
    • DiggerUK
    • By DiggerUK 20th Apr 18, 9:22 PM
    • 3,042 Posts
    • 2,989 Thanks
    DiggerUK
    Guess what
    Thanks for the advice, will be looking to offload the silver at some point........
    Originally posted by jamesaf
    jamesaf, Silver just went up by about 50p an ounce. That is up, give or take, about 5% on a month ago..._

    https://silverprice.org
    (You may need to move prices to GBP)
    I am not now, nor have I ever been, a Financial Adviser.
    'Forward to the British Spring' 'Viva Wikileaks'
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