BTL vs Shares (Funds) vs Alternatives

[sidicks]

rufusgti said:

Ok so that chart shows gain over the last thirty years. But there's decades where there's no growth. This is exactly the same with property, although the property would have provided an income over that period. Is that chart adjusted for inflation?

Good spot!

The graph is comparing a total return equity index (income reinvested) with a price return property index, so is ignoring all of the income from property!

[rufusgti]

What would be handy is a thread to offer advice on the way into S&S.
For someone like me who has
No idea what fund would suit me.
No idea how to go about setting it up.
No idea who I can trust to manage it.
No idea of the costs involved.
No idea.

The correct advice is to see my financial advisor, but how do I know that he really knows what he's doing.

[drainbrain]

rufusgti said:

What would be handy is a thread to offer advice on the way into S&S.
For someone like me who has
No idea what fund would suit me.
No idea how to go about setting it up.
No idea who I can trust to manage it.
No idea of the costs involved.
No idea.

The correct advice is to see my financial advisor, but how do I know that he really knows what he's doing.

I've been saying for years that there's demand for this or this type of investment vehicle. Something you can just lob regular money at and that actually becomes considerably more than you lobbed at it, especially over a lengthy period. And something for people who neither know how it all works nor care.

But it just doesn't exist. It sort of did once, but not any more.

[sidicks]

drainbrain said:

I've been saying for years that there's demand for this or this type of investment vehicle. Something you can just lob regular money at and that actually becomes considerably more than you lobbed at it, especially over a lengthy period. And something for people who neither know how it all works nor care.

But it just doesn't exist. It sort of did once, but not any more.

It certainly does exist.

And I believed a decent example is the platform you've recently invested in with GingeR (although similar products are available elsewhere).

[NickCQ]

drainbrain said:

But it just doesn't exist. It sort of did once, but not any more.

I imagine that's due to increased regulation to avoid mis-selling or consumer protection claims. So much more disclosure and approval requirements.

[BoRED S2upid]

rufusgti said:

What would be handy is a thread to offer advice on the way into S&S.
For someone like me who has
No idea what fund would suit me.
No idea how to go about setting it up.
No idea who I can trust to manage it.
No idea of the costs involved.
No idea.

The correct advice is to see my financial advisor, but how do I know that he really knows what he's doing.

There is loads of advice and guidance on here on this exact subject and many platforms that allow you to drip feed money every month into funds. Read, read and read some more.

[drainbrain]

rufusgti said:

What would be handy is a thread to offer advice on the way into S&S.
For someone like me who has
No idea what fund would suit me.
No idea how to go about setting it up.
No idea who I can trust to manage it.
No idea of the costs involved.
No idea.

The correct advice is to see my financial advisor, but how do I know that he really knows what he's doing.

Most or all of that isn't too difficult to ascertain. But it's the OUTCOME that you're really interested in, isn't it? So what outcome/performance are you expecting to obtain? Me, I'd like 10% ROI per annum invested to take either as income or to roll up for compounded gain. But what would you like, or expect, just out of genuine interest?

[rufusgti]

drainbrain said:

Most or all of that isn't too difficult to ascertain. But it's the OUTCOME that you're really interested in, isn't it? So what outcome/performance are you expecting to obtain? Me, I'd like 10% ROI per annum invested to take either as income or to roll up for compounded gain. But what would you like, or expect, just out of genuine interest?

I'd like the same, but would be happy with less.
On top of that I'd want to be guaranteed someone isn't going to just piss my money away completely (maybe thats asking too much, genuinely don't know, hence the fear). Can the fund manager lose the entire pot? What happens then?

I've just put some money in premium bonds which is notoriously rubbish, yet that money I know I will need in the next 5 years. But I'd be interested in starting up another pot that gets added to monthly (the profit from BTL).

[drainbrain]

rufusgti said:

I'd like the same, but would be happy with less.

Dare I ask how much less? (coz the word is you'll struggle for 5%)

Edited by drainbrain on Wednesday 30th November 20:40

[sidicks]

drainbrain said:

Dare I ask how much less? (coz the word is you'll struggle for 5%)

What 'word' is that?
With what level of risk?
Over what timescale?

[drainbrain]

sidicks said:

What 'word' is that?
With what level of risk?
Over what timescale?

See this is where it starts going wrong. This is investment for the completely ignorant/uninitiated. The Ordinary Joe who wants to put £50 a month into a something that he knows is going to grow at 5%pa. and all he needs to do is keep putting the £50 a month in knowing it'll keep doing that 5%. Google is telling me that's difficult without 'risk'. And it's also telling me that taking risk often isn't acceptable/sensible depending on the purpose of the investment.
There certainly isn't a bank account that returns 5%. Or a joint life annuity. Or a guaranteed bond. Is there?

[rufusgti]

sidicks said:

What 'word' is that?
With what level of risk?
Over what timescale?

The level of risk is key I guess.
I wouldn't risk a 10k pot for 5% per annum if the risk is that I can lose the entire amount.
If the risk is, I may only get 1% then I'm game.
If the risk is I could lose 5% then I want to see a forecast of what, 10%??

You see how hard it is when it's not easy to find the answers to these questions.

[sidicks]

drainbrain said:

See this is where it starts going wrong. This is investment for the completely ignorant/uninitiated. The Ordinary Joe who wants to put £50 a month into a something that he knows is going to grow at 5%pa. and all he needs to do is keep putting the £50 a month in knowing it'll keep doing that 5%. Google is telling me that's difficult without 'risk'. And it's also telling me that taking risk often isn't acceptable/sensible depending on the purpose of the investment.
There certainly isn't a bank account that returns 5%. Or a joint life annuity. Or a guaranteed bond. Is there?

Risk free rates are 1-2% depending on term.

[drainbrain]

sidicks said:

Risk free rates are 1-2% depending on term.

I know. But it's very disheartening and somehow disappointing especially if essential funds are involved. On the other hand upping the risk factor is too worrying as the 'guarantees' start slipping away. Being caught between anxiety and disappointment somehow doesn't seem right for ordinary and financially unsophisticated people who after all are only trying to make provision for themselves. 1% really is pretty meaningless, tho.

[sidicks]

drainbrain said:

I know. But it's very disheartening and somehow disappointing especially if essential funds are involved. On the other hand upping the risk factor is too worrying as the 'guarantees' start slipping away. Being caught between anxiety and disappointment somehow doesn't seem right for ordinary and financially unsophisticated people who after all are only trying to make provision for themselves. 1% really is pretty meaningless, tho.

You can have a guaranteed risk free return or you can take some risk and target a higher upside with some downside risk. That's just basic economics.

Edited by sidicks on Thursday 1st December 10:01

[Phooey]

I'd probably sit tight for a year or two and see what happens in the housing market - spend lots of time comparing house prices vs rents

http://www.independent.co.uk/voices/housing-crash-...

[BoRED S2upid]

rufusgti said:

I'd like the same, but would be happy with less.
On top of that I'd want to be guaranteed someone isn't going to just piss my money away completely (maybe thats asking too much, genuinely don't know, hence the fear). Can the fund manager lose the entire pot? What happens then?
).

You put your hard earned with a decent fund manager. Some are managing billions! The way I see it out of those billions there are some very wealthy individuals who trust said fund manager to make them even richer if it's good enough for them then it's good enough for me with my very small investments.

[covmutley]

I have funds with Bestinvest. Their website is very easy, you can add stocks and shares into your isa account also.

I dont have much in there any more following moving house, but recently I got £1,500 on a 0% credit card (paying it off monthly) and stuck £500 each in a US, UK and Asian funds. The Asian and US ones are up about 20% I think and Uk by about 9%.

Obviously there is luck in the current rise, and it could fall, but my plan is to hold long term. That rise also includes the dividends payments that I get, which are automatically reinvested.

I also hold 3 sets of shares (bank, oil, retail), which are more risky obviously, but it is interesting to follow them weekly, as you cant really see what you are buying when putting in the fund. It is very easy, and so far, returns have been good.

[sidicks]

BoRED S2upid said:

You put your hard earned with a decent fund manager. Some are managing billions! The way I see it out of those billions there are some very wealthy individuals who trust said fund manager to make them even richer if it's good enough for them then it's good enough for me with my very small investments.

It's important to understand the nature of the investment you are making, your time horizon and your appetite for risk:

If you have a short investment horizon (<3 years) and / or little appetite for risk (I.e. can't afford your investment to fall in value) then cash deposits or similar will be the best option. Unfortunately, in the current environment, that means very low returns.

Conversely, if you have a long investment horizon (at least 5 years) or large appetitive for risk (you can cope with (say) a 25% fall in the value of your investment) then equities will probably provide the best risk-return trade off and give you the potential for higher returns.

There are numerous choices between these extremes!

[5pen]

FTSE All-Share passive fund performance for the last 5 years;
HSBC FTSE All Share Index A Acc
30/11/11 - 30/11/2012 14.55%
30/11/12 - 30/11/2013 19.37%
30/11/13 - 30/11/2014 3.54%
30/11/14 - 30/11/2015 1.12%
30/11/15 - 30/11/2016 10.16%

Active 'Global' Equity fund performance for the last 5 years;
Fundsmith Equity I Acc
30/11/11 - 30/11/2012 19.93%
30/11/12 - 30/11/2013 23.43%
30/11/13 - 30/11/2014 22.87%
30/11/14 - 30/11/2015 13.88%
30/11/15 - 30/11/2016 27.84%

I think these figure are calculated with dividends re-invested and after management fees but not any platform fees, so there would probably be a charge to hold them, say 0.5% max.

Past performance is no guarantee yadda, yadda, but as long as the good years make up for the bad ones and you pick your fund to suit your appetite for risk, I don't think they are particularly hard for the average Joe to invest in and see a reasonable return.