Investment advice
Discussion
I'm looking for some advice, looking mid to long term (5-15 years)
I have over 100k -150k I want to invest, and I'm looking for a good return (8% +).
To the smart investors, where would your money go? Ideally (relatively) low maintenance on my part would be fantastic.
For some background, I haven't been able to get a mortgage - as I've been living out of the country for a long time and don't have a PAYE job. I was an IT contractor and I'm now looking at moving overseas again (and not being in the regular working sphere for a while) so I'd like the cash that I have to be working for me.
Over to you!
I have over 100k -150k I want to invest, and I'm looking for a good return (8% +).
To the smart investors, where would your money go? Ideally (relatively) low maintenance on my part would be fantastic.
For some background, I haven't been able to get a mortgage - as I've been living out of the country for a long time and don't have a PAYE job. I was an IT contractor and I'm now looking at moving overseas again (and not being in the regular working sphere for a while) so I'd like the cash that I have to be working for me.
Over to you!
If you cannot get a mortgage why not just pay cash?
I rent two houses, one for 595 and one for 700 p/m, one for under £100k and one for under £140k.
£100-150k would get you a 2 bed flat in Chester or a 2/3 bed terrace, good rental demand.
Paying a property manager will eat into your profit plus upkeep but I would think appx;
700 * 12 = 8400 - 10% (agency) = 7560 + capital value increase - upkeep.
Although its probably not your 8% return, but seriously what returns 8% at low-medium risk with minimal involvement?
I rent two houses, one for 595 and one for 700 p/m, one for under £100k and one for under £140k.
£100-150k would get you a 2 bed flat in Chester or a 2/3 bed terrace, good rental demand.
Paying a property manager will eat into your profit plus upkeep but I would think appx;
700 * 12 = 8400 - 10% (agency) = 7560 + capital value increase - upkeep.
Although its probably not your 8% return, but seriously what returns 8% at low-medium risk with minimal involvement?
digger_R said:
I'm looking for some advice, looking mid to long term (5-15 years)
I have over 100k -150k I want to invest, and I'm looking for a good return (8% +).
To the smart investors, where would your money go? Ideally (relatively) low maintenance on my part would be fantastic.
I have over 100k -150k I want to invest, and I'm looking for a good return (8% +).
To the smart investors, where would your money go? Ideally (relatively) low maintenance on my part would be fantastic.
You want a good return and ideally low maintenance.
How would 13.83% annual average do for a return?
Would fifteen minutes data inputting each week, meet your low maintenance requirement?
That has been possible by investing long-term in big UK companies over the past 28 years.
However, although I am hoping that will continue, I cannot tell you what will happen in the stock market tomorrow, next week, next month, or next year.
There is plenty of investment 'advice' available, but much of it is from people who think they can forecast the future, or want commission.
My advice would be, for you to learn how to invest sensibly in equities yourself.
The rewards can be very worthwhile, but you must be patient.
Edited by Jon39 on Wednesday 10th February 18:15
Jon39, being in a similar position to the OP myself, could I ask where you would learn how to invest or what to look for in a company?
Also, what is actually the data inputting?
I,ve dabbled in investing for a few years but at best it's been pot luck and admittedly I've lost more than I've made. It would be nice to be more scientific about it and improve my chances.
Cheers
P.S. Does the 13.8% include dividends or just growth?
Also, what is actually the data inputting?
I,ve dabbled in investing for a few years but at best it's been pot luck and admittedly I've lost more than I've made. It would be nice to be more scientific about it and improve my chances.
Cheers
P.S. Does the 13.8% include dividends or just growth?
Edited by Mal001 on Wednesday 10th February 18:54
Fittster said:
So you are:
A) Neil Woodford
B) An internet fantasist.
Why would you say that?A) Neil Woodford
B) An internet fantasist.
What John has quoted is entirely reasonable but not a guide to any achievable future returns.
I have made 23.5% gross on my SIPP (pension fund) in the last 20 months.
To the OP. Start with the Hargreaves Lansdowne website
The original Nick the Greek said:
Fittster said:
So you are:
A) Neil Woodford
B) An internet fantasist.
Why would you say that?A) Neil Woodford
B) An internet fantasist.
What John has quoted is entirely reasonable but not a guide to any achievable future returns.
I have made 23.5% gross on my SIPP (pension fund) in the last 20 months.
To the OP. Start with the Hargreaves Lansdowne website
You maybe doing well but I'll doubt your keep it up. Warren Buffett the richest man on the planet only average 20% annually.
To the OP, google the returns over the long term of successful investors then asks yourself "Is a random on the internet, who has provided no way to validate their returns likely to be more successful"?
Im up 40% on my pension fund over 7 years, but then you realise and its more like 5% a year (before inflation)...but the 40% sounds good the the guy in the street 
20 months is just a blip in the longer investment timescale, when you get 3 years of losing year on year you will need that +20% to average it out ....
Buffet had averaged 20% for 20 years ...thats like turning £100k into £5M .....anyone would be happy with that performance from their pension fund....the reality is more like 3-5%, depending on timing, when you get in and out....
20 months is just a blip in the longer investment timescale, when you get 3 years of losing year on year you will need that +20% to average it out ....
Buffet had averaged 20% for 20 years ...thats like turning £100k into £5M .....anyone would be happy with that performance from their pension fund....the reality is more like 3-5%, depending on timing, when you get in and out....
Fittster said:
Neil Woodford is considered to be one of the UK's most successful investors. His average return over 25 year period was annual year-on-year was slightly more than 13%. I think he probably spends more than 15 minutes a day at work.
You maybe doing well but I'll doubt your keep it up. Warren Buffett the richest man on the planet only average 20% annually.
To the OP, google the returns over the long term of successful investors then asks yourself "Is a random on the internet, who has provided no way to validate their returns likely to be more successful"?
Yes I know Neil Woodford!You maybe doing well but I'll doubt your keep it up. Warren Buffett the richest man on the planet only average 20% annually.
To the OP, google the returns over the long term of successful investors then asks yourself "Is a random on the internet, who has provided no way to validate their returns likely to be more successful"?
Mal001 said:
Jon39, being in a similar position to the OP myself, could I ask where you would learn how to invest or what to look for in a company?
Also, what is actually the data inputting?
I've dabbled in investing for a few years but at best it's been pot luck and admittedly I've lost more than I've made. It would be nice to be more scientific about it and improve my chances.
Cheers
P.S. Does the 13.8% include dividends or just growth?
Also, what is actually the data inputting?
I've dabbled in investing for a few years but at best it's been pot luck and admittedly I've lost more than I've made. It would be nice to be more scientific about it and improve my chances.
Cheers
P.S. Does the 13.8% include dividends or just growth?
To answer your questions in order;
I put some comments about the investment rules that I follow on another topic (Generating Income From £200k?), so no point in repeating that.
I only do very long-term, so you need to get a feeling for which type of businesses can grow steadily, even during difficult economic times. I mainly stay with FTSE 100 companies, because the size hopefully and usually, provides a better cushion against disaster. We can all think of exceptions, but if you eventually hold say 25 or 30 companies, one going bad will have minimal significance. Remember also that the dividends from these big companies, will contribute a significant part of your investment growth over the long-term. You need to build up a feeling for what might be sensible long-term businesses to invest in. You may have already watched the Warren Buffett videos. You could try the Saturday Financial Times and The Sunday Times Business section. Beware of some weekend sections, because I notice many articles promoting funds, who funnily enough also advertise in the same newspapers. Become familiar with Company Annual Report & Accounts. Good bedtime reading because you will soon fall asleep.
The data inputting is my end of week valuation on a spreadsheet. The important aspect which you are monitoring with that, is how your fund is performing against an index (I use the FTSE All-Share Index), measured each year starting afresh from 1st January. The reason for that is if you are mostly doing well in comparison to the index, it tells me to leave all the holdings alone. I believe in avoiding buying and selling because you are introducing guesswork.
The 13·8% does include dividends.
Dividends are only included in individual year figures, so as mentioned above, the performance recording starts afresh on each 1st January. The dividends received in one year would have no effect on the next year. It is not on a reinvested dividends basis. That is usually a worthwhile system for performance, but I just felt the record keeping becomes too complicated, because each reinvested dividend becomes a separate share purchase.
The 13·8% figure is declining because company profit growth now is not boosted by the higher inflation that was present years ago.
I have been helped very much by one business sector. Public funds are limited to each of their holdings not being more than a particular percentage (3% perhaps). If you strike lucky and some of your companies become larger proportions of your holdings, it is up to you whether you want to carry that addition risk. Sometimes it can be extremely worthwhile, provided the company earnings continue to grow in relation to the share price.
Anyway the best of luck to you, and stick to the conventional sensible rules.
(I only visited the Pie and Piston recently. I think perhaps I ought to stay on my regular Pistonheads sports car forum.)
Edited by Jon39 on Wednesday 10th February 21:47
Jon39 said:
Anyway the best of luck to you, and stick to the conventional sensible rules.
^^^^ Very much this.Personally, I think the sort of downturn we are in at the moment can be a good time to invest. But bear in mind things may fall further before they recover - if they recover. However, unless and until capitalism goes out of fashion it ought to work out OK over the long term.
Ozzie Osmond said:
^^^^ Very much this.
Personally, I think the sort of downturn we are in at the moment can be a good time to invest. But bear in mind things may fall further before they recover - if they recover. However, unless and until capitalism goes out of fashion it ought to work out OK over the long term.
Personally, I think the sort of downturn we are in at the moment can be a good time to invest. But bear in mind things may fall further before they recover - if they recover. However, unless and until capitalism goes out of fashion it ought to work out OK over the long term.
I am happy to pass on some pointers to others, from my own experience.
Unusual perhaps, when there is nothing for sale.
I always feel it is a shame when newish investors get things wrong, and often give up. Sometimes it is simply bad luck, but often because they have broken investment principles, that they had never even thought about.
You are of course correct about carefully selected investing during a downturn. Too many people including professionals, buy when everyone else does, then seem to panic and sell when prices go down.
One company that I am keeping an eye on is Shell, but don't take that as a recommendation, because I cannot tell what is going to happen, and only know whether my buying decisions happened to be right or wrong in a few years time.
One thing that I forgot to mention, was fund behaviour during bear markets. Holdings in companies that weather storms fairly well, can really help during downturns. Although money is temporarily lost on paper, when the market is down say 25%, but if your holdings are down only say 8%, it still counts as an out-performance and is also reassuring during a worrying period. Throughout 28 years, the market has never beaten me during any of the nine negative years. The worst market fall during that period was 2008 (-32.78%) ouch, fortunately I escaped lightly (-12.34% incl divs). When the recovery begins, your chart line is already ahead, because it is beginning the upturn from a higher base point.
Edited by Jon39 on Wednesday 10th February 23:54
Peer to peer lending. Thin Cats is this quality operation, business loans with security, and high enough in charges to keep out the sun readers pulling the rates down. I'm returning 10% gross. If you register,no charge, you can see the loans on offer and there's lots of information on them, plus useful Q&A from experienced investors.
otherman said:
Peer to peer lending.
This ^.I thought Zopa and all that jazz was just the latest fad, destined for disaster when I first read about them, but revisiting the P2P "thing" about a year ago and seeing where it's now at was quite an eye-opener.
This site/forum has a wealth of info on it and I highly recommend reading : http://p2pindependentforum.com/
I've used both RateSetter and SavingStream for some small amounts (£1k a piece) over a year at 6% (iirc) and it all worked out fine. When I did some beermat comparisons it worked out roughly double the return I'd have got on an ISA or the highest paying high street savings account over the same period, so all good imho.
There are old threads on here about p2p lending if you do a search.
Fittster said:
Neil Woodford is considered to be one of the UK's most successful investors. His average return over 25 year period was annual year-on-year was slightly more than 13%. I think he probably spends more than 15 minutes a day at work.
You maybe doing well but I'll doubt your keep it up. Warren Buffett the richest man on the planet only average 20% annually.
To the OP, google the returns over the long term of successful investors then asks yourself "Is a random on the internet, who has provided no way to validate their returns likely to be more successful"?
You maybe doing well but I'll doubt your keep it up. Warren Buffett the richest man on the planet only average 20% annually.
To the OP, google the returns over the long term of successful investors then asks yourself "Is a random on the internet, who has provided no way to validate their returns likely to be more successful"?
As you have jumped to so many conclusions, I wasn't going to bother replying.
However, if a reply might help you think about sensible, serious equity investment, you may be grateful for a comment.
'You maybe doing well but I'll doubt your keep it up.'
You might be right, I cannot tell the future. However, I had those thoughts 25 years ago, but the luck (or skill) has kept working very well so far.
(Mr Neil Woodford) 'I think he probably spends more than 15 minutes a day at work.'
I am sure that you are correct, but you have overlooked the major difference.
Mr Woodford is running a commercial business, so that would involve a great deal of work.
I presume that with fresh client money arriving, research and decisions are probably constantly being made, about where the new money is to be invested.
In contrast, all that I am doing is monitoring a private fund, which has mostly invested in the same companies for many years. Closely following business and economic news, is something that anyone interested in the subject would do anyway, so there is no need to record that as work time. Oh and it is 15 minutes each week, not every day, unless there happens to be a peak flow of dividend payments, or company results announcements.
'To the OP, google the returns over the long term of successful investors ....'
Perhaps also try a search on equity PEP/ISA funds which now exceed £1 million.
If anything is shown, you might be surprised that it has certainly not been an impossibility for quite a number of patient investors.
Edited by Jon39 on Thursday 11th February 13:42
Jon39 - what you are describing is literally some of the best returns I have literally EVER read about.
1. 13.8% CAGR over 28 years. This alone would make you an investment legend.
2. Beating the market in ALL 9 down years. That is fantastic and again, incredibly rare.
3. Doing the above with 15 minutes a week work. Now we are in the realms of Buffett-beating awesomeness.
Your "advice" sounds great and is absolutely the stuff of every newbie investor's dreams.
However, with just 15 years of 24/7 market experience I can state with absolute confidence that the ability to recreate what you have achieved is nigh on impossible.
If what you say is true then you are a one-in-a-million investor.
I don't know what career you are in but if you had gone into fund management you would be managing several billion dollars at least one of which would be yours.
Out of interest, how are you doing YTD?
Do you beat the market EVERY year starting Jan 1? Which years did you not?
I just think it is incredibly irresponsible for people with Buffett-like performance to claim that it is easy and highly repeatable for a novice.
"Just stick to the basics..." - it is a simple fact that if this were true then EVERYONE would do it.
Oh and this bit made me laugh...
He doesn't get an extra £100m and think - "hell, what do I buy now?" He just buys an extra 10% (or whatever) of what he already has.
Secondly, he won't be particularly involved in "running a commercial business" - his COO or FD or Investor Relations/Marketing team will do all that.
He will spend AS MUCH of his day as possible looking for the very best new investments he can find and making sure that his existing investments are doing what he hoped.
He will do everything in his power to avoid the commercial bits of his business since that is a massive waste of time for him.
1. 13.8% CAGR over 28 years. This alone would make you an investment legend.
2. Beating the market in ALL 9 down years. That is fantastic and again, incredibly rare.
3. Doing the above with 15 minutes a week work. Now we are in the realms of Buffett-beating awesomeness.
Your "advice" sounds great and is absolutely the stuff of every newbie investor's dreams.
However, with just 15 years of 24/7 market experience I can state with absolute confidence that the ability to recreate what you have achieved is nigh on impossible.
If what you say is true then you are a one-in-a-million investor.
I don't know what career you are in but if you had gone into fund management you would be managing several billion dollars at least one of which would be yours.
Out of interest, how are you doing YTD?
Do you beat the market EVERY year starting Jan 1? Which years did you not?
I just think it is incredibly irresponsible for people with Buffett-like performance to claim that it is easy and highly repeatable for a novice.
"Just stick to the basics..." - it is a simple fact that if this were true then EVERYONE would do it.
Oh and this bit made me laugh...
Jon39 said:
(Mr Neil Woodford) 'I think he probably spends more than 15 minutes a day at work.'
I am sure that you are correct, but you have overlooked the major difference.
Mr Woodford is running a commercial business, so that would involve a great deal of work.
I presume that with fresh client money arriving, research and decisions are probably constantly being made, about where the new money is to be invested.
When new money arrives it is invested ceteris paribus with his existing portfolio.I am sure that you are correct, but you have overlooked the major difference.
Mr Woodford is running a commercial business, so that would involve a great deal of work.
I presume that with fresh client money arriving, research and decisions are probably constantly being made, about where the new money is to be invested.
He doesn't get an extra £100m and think - "hell, what do I buy now?" He just buys an extra 10% (or whatever) of what he already has.
Secondly, he won't be particularly involved in "running a commercial business" - his COO or FD or Investor Relations/Marketing team will do all that.
He will spend AS MUCH of his day as possible looking for the very best new investments he can find and making sure that his existing investments are doing what he hoped.
He will do everything in his power to avoid the commercial bits of his business since that is a massive waste of time for him.
Jon39 said:
'To the OP, google the returns over the long term of successful investors ....'
Perhaps also try a search on equity PEP/ISA funds which now exceed £1 million.
If anything is shown, you might be surprised that it has certainly not been an impossibility for quite a number of patient investors.
There are 200 as of March last year. Perhaps also try a search on equity PEP/ISA funds which now exceed £1 million.
If anything is shown, you might be surprised that it has certainly not been an impossibility for quite a number of patient investors.
http://www.telegraph.co.uk/finance/personalfinance...
Article:
"Alliance Trust Savings, which is half the size of Fidelity Personal Investing, has 18 Isa millionaires among its 34,000 Isa investors."
So yes, if you are in the top 0.05% then you are what most normal people call "rare".
Thank you for your kind words, walm.
You clearly know this subject well.
I don't know what career you are in ..
I think one might call it holiday (very young retirement), but I do not sit around on a yacht, or even want a yacht!
As for City life, I imagine that I would have quickly got the sack, for doing hardly any transactions. All those young people look so busy, with six screens and two phones. Also as I have already stated, I have been very fortunate with one sector which has grown to be dominant in my fund, and that presumably would not be allowed in a commercial fund. Perhaps not entirely just luck though, because I did have to make a decision to retain the full holdings.
Out of interest, how are you doing YTD?
I only know at the end of each business week, so last Friday it was -1.82% including just a few early year dividends (All-Share -6.65%). Obviously happy with that, but just five weeks means nothing really.
Do you beat the market EVERY year starting Jan 1? Which years did you not?
No that must be completely impossible.
Lost in 1995, 1999, 2009, 2012, 2013.
During 1999 I did not follow the tech herd, and at the time traditional companies missed that brief 'party'.
I just think it is incredibly irresponsible for people with Buffett-like performance to claim that it is easy and highly repeatable for a novice. "Just stick to the basics..." - it is a simple fact that if this were true then EVERYONE would do it.
Yes true, but I think many investors do not pay sufficient attention to what 'long-termers' would consider to be the basics. Adherence to the principals could be helpful by increasing their chances of success. I just feel that to follow, or being aware of the basics, should reduce some risks, and hopefully can create a broad steadily growing fund. EG. I do hold 'big' oil, but have never owned any mining shares, so one of my basics is that too many cyclicals are not really suitable for a long-term fund.
When we start equity investing, we probably all do to much short-term buying and selling, pretending to ourselves that we can spot the next tiny company going to become a 'Microsoft'. Later we come to realise that although we might have made some profits, finding the big winner is very nearly impossible.
With regard to Mr Woodford, you cleary know more about how that type of operation works than me. I just thought he must be a very hard working busy man, who probably works long days.
Incidentally, I think the market might have also beaten him in 1999 (when with his previous employer), because he did not like tech. companies at mystical valuations either. If not Mr. W., then it was another well known fund manager at the time. Whoever it was, had newspaper criticism for not keeping up with other funds!
..........................
Trying to find companies that have been steadily increasing their eps and dividends, is certainly easier now that we have quick access to so much information. Very different when I began. Even the Total Shareholder Return graphs in company reports can be useful, although more than seven years might be better.
Edited by Jon39 on Thursday 11th February 15:39
Gassing Station | Finance | Top of Page | What's New | My Stuff