Recommend a good invesmtent, such as Vanguard etc?

[Paul O]

Hi all,

Wonder if you could help. I've got an ongoing investment through Cavendish, and I invest in one of the Vanguard products.

I've got some other investments maturing that need to find a new home. I want to keep the 'new' investment and the existing Vanguard ones separate so am looking at another fund of some kind. I'd like to diversify so I don't have all of my eggs in the Vanguard basket. Better to be safe than sorry?

Vanguard seems to be doing pretty well thus far, but any recommendations of other funds that I can research offering a similar simple approach to investing please?

Cheers!

Paul.

[sidicks]

Paul O said:

Hi all,

Wonder if you could help. I've got an ongoing investment through Cavendish, and I invest in one of the Vanguard products.

I've got some other investments maturing that need to find a new home. I want to keep the 'new' investment and the existing Vanguard ones separate so am looking at another fund of some kind. I'd like to diversify so I don't have all of my eggs in the Vanguard basket. Better to be safe than sorry?

Vanguard seems to be doing pretty well thus far, but any recommendations of other funds that I can research offering a similar simple approach to investing please?

Cheers!

Paul.

Good investment?

For what purpose?
How much risk can you take?
Over what investment horizon?

[Paul O]

Its long term for my daughter, so 15 years or so.

Risk, I'm not a confident gambler but I do want a good return. Vanguard for example offer 40%, 60%, 80% or 100% risks, with 100% being the most risky (or something along those lines). I've gone for 60%, to give an idea.

Like Vanguard, I'm looking for something that is pretty simple to understand and 'select and forget', I don't want to be eyeing up the market and swapping about every few months.

Thanks

[jeff m2]

Bogle is known for index funds and the lowest expenses in the business.

As it's for your daughter risk is not a factor as it would be for an older person approaching "oldness".
Over the long term low expenses are a big factor in growth.

I'm not with Vanguard, often wondered if I should have been.

[Ozzie Osmond]

Paul O said:

Risk, I'm not a confident gambler but I do want a good return.

In my opinion the really big risks are political, not economic. As such, they are impossible to predict and completely uncontrollable. For this reason alone it's IMO worth running a fairly high level of investment risk over a 15 year timescale.

Example, start with £1,000 and invest for 15 years

• 3% compound growth = £1,560

• 6% compound growth = £2,400

Even on those figures it's a very big difference.

[jeff m2]

Ozzie Osmond said:

Paul O said:

Risk, I'm not a confident gambler but I do want a good return.

In my opinion the really big risks are political, not economic. As such, they are impossible to predict and completely uncontrollable. For this reason alone it's IMO worth running a fairly high level of investment risk over a 15 year timescale.

Example, start with £1,000 and invest for 15 years

• 3% compound growth = £1,560

• 6% compound growth = £2,400

Even on those figures it's a very big difference.

To quantify risk ask you father/grandfather what they paid for a Mars Bar when they were at school.
Then ask them the cost of a pint when they started drinking.

Now think about keeping your hard earned extra money in Pounds (or Dollars).
Unfortunately sovereign debt is so overpowering these days the only way out is "inflation", so that countries pay back , or restructure, with Pounds or Dollars that are reduced in value. They borrow relying on inflation to reduce their debt in relation to GDP.

Investing is not about making lots of money, (well it is sort of) it's about Value....maintaining it....so that whatever you have, or whatever you save will buy the same crap in five/ten/twenty years as it can buy today.

Generally speaking you have a far better chance of staying with or even beating inflation by investing in equity.

The gamble actually becomes the assumption that our wonderful leaders who have never run a business will somehow maintain the value of the Pound/Dollar even if they could. (and they don't really want to)

I should add that UK is in a slightly different position to many other countries in that it is more fearful of inflation due to its large inflation linked outgoing component (the rather generous welfare system) but the Pound will still suffer loss of value over time taking your Sterling savings with it.

[Craikeybaby]

I'm in a similar position to you, currently investing in the Vanguard Lifestrategy 60 for myself with a 5-10 year outlook.

Soon I will want to start putting some money away my soon to be born son/daughter, with a view to giving them the money when they are 18/21. I also want this money to be separate, but still in my name. I'm pretty sure I'll go for the Vanguard Lifestrategy 80, in that there is more risk with 80% equities/20% bonds, but that should be less of an issue over the longer investment period.

[Paul O]

Craikeybaby said:

I'm in a similar position to you, currently investing in the Vanguard Lifestrategy 60 for myself with a 5-10 year outlook.

Soon I will want to start putting some money away my soon to be born son/daughter, with a view to giving them the money when they are 18/21. I also want this money to be separate, but still in my name. I'm pretty sure I'll go for the Vanguard Lifestrategy 80, in that there is more risk with 80% equities/20% bonds, but that should be less of an issue over the longer investment period.

Spooky, that's pretty much identical (albeit my Daughter is now 4), and following my thought process too!

I would prefer something alternative to Vanguard, purely so that I don't have all of my money tied up with the one provider, but struggling to find recommendations for alternatives.

[Ozzie Osmond]

Isn't it massively more tax-efficient to put it in THEIR name?

• ISA for kids - up to £4,080 p.a. and access from age 18. No tax relief going in but investments grow tax free.
• Pension for kids - tax relief up front so pay in £2,880 and £3,600 gets invested! AND cumulates tax free through to age 55+

[Craikeybaby]

The Fidelity Select List was mentioned by another PHer yesterday, that may be worth looking at for other funds.

Let me know how you get on.

[Paul O]

Thanks Craikey I'll take a look.
Ozzie - kids funds no good as you can't control the release of the funds but I'll be using the ISA umbrella anyway.

[Craikeybaby]

Exactly my logic, I won't use all of my ISA allowance every year, so better to keep in my name/control until I know baby Craik will be responsible enough to get the money.

A pension for a child is all well and good on paper, but I want to be able to help them when they are finding their feet in life, not when they are near retirement.