Small Investment
Discussion
So after a small pay rise and a few bonuses I've managed to save a few thousand £. I've thought about paying it off our current mortgage but at 2.6% interest I'm hoping to gain a better return than the interest rate on the loan. Looking for something low risk that I can top up and would be accessible should it be required. I've thought about topping it up a bit more and taking out a BTL mortgage on a newish flat in a Yorkshire city as the LTV near me would be pathetic but obviously this is the opposite of accessible.
Anyone have any decent recommendations for what I can do to make a bit more interest than my current account?
Anyone have any decent recommendations for what I can do to make a bit more interest than my current account?
gibbon said:
Stock and shares ISA, ftse tracker, buy low sell high (currently 6100 - 6400 range).
Obviously im being slightly facetious, but the principle could suit your needs, and its really not overly hard, however this would involve some active management, and degree of risk.
Timing the market through "active management" isn't "overly hard" with just a few thousand?Obviously im being slightly facetious, but the principle could suit your needs, and its really not overly hard, however this would involve some active management, and degree of risk.
Sorry OP but this is total BS.
Timing the market is almost impossible.
Professionals themselves tend to underperform just leaving it long term in a tracker.
And lots of active management will rapidly eat into your capital with transaction fees.
Source: decades of doing it for a job.
However, gibbon is right that it will involve risk. Generally any higher return will involve higher risk.
If I were the OP I would start a small ISA and just get saving regularly with it all going into a FTSE all-share tracker or S&P tracker or MSCI world index.
Trying to time the market and actively manage will just line the pockets of your trading platform.
walm said:
Timing the market through "active management" isn't "overly hard" with just a few thousand?
Sorry OP but this is total BS.
Timing the market is almost impossible.
Professionals themselves tend to underperform just leaving it long term in a tracker.
And lots of active management will rapidly eat into your capital with transaction fees.
Source: decades of doing it for a job.
However, gibbon is right that it will involve risk. Generally any higher return will involve higher risk.
If I were the OP I would start a small ISA and just get saving regularly with it all going into a FTSE all-share tracker or S&P tracker or MSCI world index.
Trying to time the market and actively manage will just line the pockets of your trading platform.
I think total BS is a little harsh. Dont assume you are the only professional Walm. Sorry OP but this is total BS.
Timing the market is almost impossible.
Professionals themselves tend to underperform just leaving it long term in a tracker.
And lots of active management will rapidly eat into your capital with transaction fees.
Source: decades of doing it for a job.
However, gibbon is right that it will involve risk. Generally any higher return will involve higher risk.
If I were the OP I would start a small ISA and just get saving regularly with it all going into a FTSE all-share tracker or S&P tracker or MSCI world index.
Trying to time the market and actively manage will just line the pockets of your trading platform.
Drip feed into a ftse tracker, with adjustments made for highs and lows. It isnt rocket science, and with a long term view you would be unlucky or rather stupid to loose your shirt imho.
Edited by gibbon on Tuesday 24th November 09:36
gibbon said:
I think total BS is a little harsh. Dont assume you are the only professional Walm.
Drip feed into a ftse tracker, with adjustments made for highs and lows. It isnt rocket science, and with a long term view you would be unlucky or rather stupid to loose your shirt imho.
That's fair - I did assume that - so, sorry!!Drip feed into a ftse tracker, with adjustments made for highs and lows. It isnt rocket science, and with a long term view you would be unlucky or rather stupid to loose your shirt imho.
I misinterpreted what you wrote assuming you meant to be getting 100% in and out on a regular basis which could easily destroy the upside with trading fees.
To drip feed is definitely a good idea.
Looking at a lot of trackers they seem to yield less than my daughters junior isa. Either that or they want a minimum investment far above the funds I have available.
Do you any of you chaps know of a tracker offering 4ish percent? I'm looking through ft market data and they all seem to be 2-3%.
Do you any of you chaps know of a tracker offering 4ish percent? I'm looking through ft market data and they all seem to be 2-3%.
I think gibbon and I were talking about whole market trackers (eg FTSE 100 or FTSE 250 or FTSE All Share) which track indices.
These have quite low div yields in the 2-3% range.
But there is a possibility of asset appreciation (rise in the FTSE) on top. Or a drop.
As a result their LONG TERM return (div + appreciation) is in the 6-7% range.
LONG TERM.
Or you could lose 50% in a year if it's 2008 etc...
These have quite low div yields in the 2-3% range.
But there is a possibility of asset appreciation (rise in the FTSE) on top. Or a drop.
As a result their LONG TERM return (div + appreciation) is in the 6-7% range.
LONG TERM.
Or you could lose 50% in a year if it's 2008 etc...
Walm that's exactly what I'm worried about with tracker accounts.
Looking at that sort of figure what would you consider long term. The money would like be invested for around 15 years. With regular dripfeeding of bonuses and any other spare amounts. Would you think that 6 or 7 percent be fairly likely over that period?
Looking at that sort of figure what would you consider long term. The money would like be invested for around 15 years. With regular dripfeeding of bonuses and any other spare amounts. Would you think that 6 or 7 percent be fairly likely over that period?
Eski1991 said:
Walm that's exactly what I'm worried about with tracker accounts.
Looking at that sort of figure what would you consider long term. The money would like be invested for around 15 years. With regular dripfeeding of bonuses and any other spare amounts. Would you think that 6 or 7 percent be fairly likely over that period?
Yes.Looking at that sort of figure what would you consider long term. The money would like be invested for around 15 years. With regular dripfeeding of bonuses and any other spare amounts. Would you think that 6 or 7 percent be fairly likely over that period?
Eski1991 said:
Walm that's exactly what I'm worried about with tracker accounts.
Looking at that sort of figure what would you consider long term. The money would like be invested for around 15 years. With regular dripfeeding of bonuses and any other spare amounts. Would you think that 6 or 7 percent be fairly likely over that period?
Yes, more if you stick to reinvesting dividends. Just make sure you pick and efficient way of doing it, i.e. low cost.Looking at that sort of figure what would you consider long term. The money would like be invested for around 15 years. With regular dripfeeding of bonuses and any other spare amounts. Would you think that 6 or 7 percent be fairly likely over that period?
Also worth noting, that if you are thinking 15 yrs + view, then have you considering putting some of this money into a SIP? Stick it in a ftse tracker in a pension rapper and receive an extra 20, 40 or 45% straight back from the government. Hard to beat that option whilst its there, however you wont be able to access the money until you are 55, and the rules can change.
If it was me, i would split my cash between a stock and shares isa and a pension stocks and shares account depending on access needs.
If it was me, i would split my cash between a stock and shares isa and a pension stocks and shares account depending on access needs.
gibbon said:
Also worth noting, that if you are thinking 15 yrs + view, then have you considering putting some of this money into a SIP? Stick it in a ftse tracker in a pension rapper and receive an extra 20, 40 or 45% straight back from the government. Hard to beat that option whilst its there, however you wont be able to access the money until you are 55, and the rules can change.
If it was me, i would split my cash between a stock and shares isa and a pension stocks and shares account depending on access needs.
Fortunately 55 is some way off for me yet and I've not thought of any plans for investing in a personal pension (Although I probably should) besides I'm sure the rules will change drastically in the next 3 decades, I'm only in my early 20s. The money would be for when my daughter is looking to pay for a degree or first home so I will be adding to it over time. I think as you and others have suggested I will bolster her Junior ISA which is a dependable 3.25% and also open a tracker account with low fee.If it was me, i would split my cash between a stock and shares isa and a pension stocks and shares account depending on access needs.
Thank you all for your help as I was really lost on this before.
It's not a particularly sexy answer, but if you've built up a decent sum, look on it as your rainy day fund. Put it to one side, forget about it until it's needed. Or, pay off any other expensive debt - or even use some of it to partially absorb funding any insurance shortfalls.
Then consider an investment strategy, properly.
Then consider an investment strategy, properly.
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