£5k to invest now - where?

[Teebs]

Looking to invest £5k long term, low risk over 20 years. Currently got HL account & Santander investment platform that I can dump the money and invest.

Index trackers the best option? I've got some money invested in funding circle which has returned 6% in 10 months, but it's got a higher level of risk attached to it.

Thoughts?

[JulianPH]

Are you happy to pick and run your own portfolio of shares/bonds/funds, or would you prefer this to be managed for you?

Do you like active stock selection or asset allocation, or are you happy to track indices alone?

With a 20 year time frame you can take a decent level of risk to achieve a higher reward rather than a cautious approach.

I would consider taking your 6% profit from the lending, but that is just my opinion.

There are some very knowledgeable (and successful) DIY investors here who can help in whichever route you prefer.

[Teebs]

JulianPH said:

Are you happy to pick and run your own portfolio of shares/bonds/funds, or would you prefer this to be managed for you?

Do you like active stock selection or asset allocation, or are you happy to track indices alone?

With a 20 year time frame you can take a decent level of risk to achieve a higher reward rather than a cautious approach.

I would consider taking your 6% profit from the lending, but that is just my opinion.

There are some very knowledgeable (and successful) DIY investors here who can help in whichever route you prefer.

Thanks, that's useful. I've currently got a mix of funds and company shares which were performing ok (until recently like most people), usual suspects of Lindsell-train global equity, Fundsmith etc. Trying to stay away from individual companies to mitigate the risk somewhat.

Would it be sensible to just stick it in one of the above funds (Lindsell Train) and leave for the 20 years. I'm also topping up with £1k / month..

What's driving your comments on the funding circle investment?

[JulianPH]

Teebs said:

Thanks, that's useful. I've currently got a mix of funds and company shares which were performing ok (until recently like most people), usual suspects of Lindsell-train global equity, Fundsmith etc. Trying to stay away from individual companies to mitigate the risk somewhat.

Would it be sensible to just stick it in one of the above funds (Lindsell Train) and leave for the 20 years. I'm also topping up with £1k / month..

What's driving your comments on the funding circle investment?

If you already have a mix of individual shares and the usual suspects of funds then a global tracker (including some bonds) would provide a degree of diversity.

With a 20 year investment horizon, providing you do not get spooked by times such as now - which you don't appear to do at all - then you are probably not going to go wrong unless you invest in an expensive fund that goes on to under perform or shares that are more expensive than they are really worth.

You could pick some consumer staple socks (as Terry Smith did - I wish he had stayed with this idea), risk a bit on some up and coming tech stock, or just invest in the markets (tracker/ETF) and have a look every five years.

Regarding Fund Circle, I just don't like it. You put up 100% of the money, they take their fee before lending it on and then another fee every month before you get anything back.

I'm not saying it cannot work, but they have absolutely no risk whatsoever in it. You do.

If a year ago someone said to you "over the next year most people will lose 6%, yet you can make 6%" you would be happy. That is what has happened.

This could continue, but I like to take my returns and reinvest accordingly. Please don't take that as a slight on Funding Circle or your overall strategy. I was looking at it in isolation.

Cheers

[Ginge R]

Teebs said:

Looking to invest £5k long term, low risk over 20 years. Currently got HL account & Santander investment platform that I can dump the money and invest.

Index trackers the best option? I've got some money invested in funding circle which has returned 6% in 10 months, but it's got a higher level of risk attached to it.

Thoughts?

Impossible for anyone to say. Before looking at the specific investments, you should consider your tax situation now, your likely (overall) tax situation in twenty years, and what your objectives are. And, of course, your inclination for (low?) risk and capacity for loss.

[Teebs]

JulianPH said:

If you already have a mix of individual shares and the usual suspects of funds then a global tracker (including some bonds) would provide a degree of diversity.

With a 20 year investment horizon, providing you do not get spooked by times such as now - which you don't appear to do at all - then you are probably not going to go wrong unless you invest in an expensive fund that goes on to under perform or shares that are more expensive than they are really worth.

You could pick some consumer staple socks (as Terry Smith did - I wish he had stayed with this idea), risk a bit on some up and coming tech stock, or just invest in the markets (tracker/ETF) and have a look every five years.

Regarding Fund Circle, I just don't like it. You put up 100% of the money, they take their fee before lending it on and then another fee every month before you get anything back.

I'm not saying it cannot work, but they have absolutely no risk whatsoever in it. You do.

If a year ago someone said to you "over the next year most people will lose 6%, yet you can make 6%" you would be happy. That is what has happened.

This could continue, but I like to take my returns and reinvest accordingly. Please don't take that as a slight on Funding Circle or your overall strategy. I was looking at it in isolation.

Cheers

Ok - makes sense, thanks again.

I'm happy with Lindsell-train global equity, partly because I work in FMCG where they've got a large proportion of investment - I understand the businesses and how they operate, profit strategy etc.

I think I'll continue to drip feed in my current investment per month to try and reduce down any further risk, especially given the current climate.
Interesting comments on Funding Circle, I think I'll hold my position for now as my investment isn't huge but I'll monitor it and pull the cash out as and when.

[Teebs]

Ginge R said:

Impossible for anyone to say. Before looking at the specific investments, you should consider your tax situation now, your likely (overall) tax situation in twenty years, and what your objectives are. And, of course, your inclination for (low?) risk and capacity for loss.

Thanks, I appreciate it's a broad question and hard to answer for an individual. The money for investment is surplus, no debts apart from a mortgage which I'm overpaying by 20% / month.

[JulianPH]

Teebs said:

Ok - makes sense, thanks again.

I'm happy with Lindsell-train global equity, partly because I work in FMCG where they've got a large proportion of investment - I understand the businesses and how they operate, profit strategy etc.

I think I'll continue to drip feed in my current investment per month to try and reduce down any further risk, especially given the current climate.
Interesting comments on Funding Circle, I think I'll hold my position for now as my investment isn't huge but I'll monitor it and pull the cash out as and when.

It is always a sensible approach to invest in something you are knowledgeable about and experienced in.

As I said, nothing wrong with Funding Circle whatsoever. You just need to understand the part you play (the financier), what you get in return for the risk you are taking and where you stand in the pecking order if things go wrong. It is just like any other investment really.

[Ginge R]

Teebs said:

Thanks, I appreciate it's a broad question and hard to answer for an individual. The money for investment is surplus, no debts apart from a mortgage which I'm overpaying by 20% / month.

The best investment many people make, is in defence. If you have 5k surplus, kicking about, and you don’t know what to do with it, then consider checking your 6 first. It’s a blind spot. If you need protection, check you have proper and appropriate life cover, income protection etc, depending on your circumstances. £5,000 acting as a feeder fund can pay premiums for quite a while (depending on your circumstances and needs of course).

I’ve met with the widow of a (former) client this week, someone who came to me just over a year ago when it was too late; it’s a salutary experience. He was buried two weeks ago. It’s the one investment you hope will never pay out.

[Ginge R]

Teebs said:

Ok - makes sense, thanks again.

I'm happy with Lindsell-train global equity, partly because I work in FMCG where they've got a large proportion of investment - I understand the businesses and how they operate, profit strategy etc.

I think I'll continue to drip feed in my current investment per month to try and reduce down any further risk, especially given the current climate.
Interesting comments on Funding Circle, I think I'll hold my position for now as my investment isn't huge but I'll monitor it and pull the cash out as and when.

A lot of us take the mickey out of writers who (unfairly perhaps) opine on investment matters. Jeff is a good bloke though, this is opportune.

https://www.dailymail.co.uk/money/investing/articl...

[Teebs]

Ginge R said:

The best investment many people make, is in defence. If you have 5k surplus, kicking about, and you don’t know what to do with it, then consider checking your 6 first. It’s a blind spot. If you need protection, check you have proper and appropriate life cover, income protection etc, depending on your circumstances. £5,000 acting as a feeder fund can pay premiums for quite a while (depending on your circumstances and needs of course).

I’ve met with the widow of a (former) client this week, someone who came to me just over a year ago when it was too late; it’s a salutary experience. He was buried two weeks ago. It’s the one investment you hope will never pay out.

Thanks, interesting to look at this from a different perspective. Luckily, I'm pretty well covered from this point, both personally and professionally.

[Ginge R]

Good stuff.

[RJG46]

What with all the Global Warming you be stupid not buy land at the North or South Pole.

[Croutons]

RJG46 said:

What with all the Global Warming you be stupid not buy land at the North or South Pole.

Not sure the Russians or Chinese would give you much for £5k.