Where to put your money right now?
Discussion
Bit more of a general investment topic this one, but we already have a stocks/shares/gamble thread and a Gold/precious metals thread, so I thought this deserved a new one.
Essentially: Where would you put your money or cash reserves to ensure both security and some returns?
Given what is happening the moment, and what may happen with the economy over the next 12 months or so with Covid/Brexit etc.
My thoughts are that having sums in the bank is not prudent, because if the government decides to engage in quantitative easing there is a risk of money being devalued slightly.
So what to do with it?
Buy some residential property for letting?
Buy commercial/industrial property for letting?
Buy shops or office space?
Stock Market?
Precious metals?
Anything else?
Having sold out of 'High street' properties 2 or 3 years ago, I'm kind of pleased that I am no longer in that sector of investment.
Thoughts?
Essentially: Where would you put your money or cash reserves to ensure both security and some returns?
Given what is happening the moment, and what may happen with the economy over the next 12 months or so with Covid/Brexit etc.
My thoughts are that having sums in the bank is not prudent, because if the government decides to engage in quantitative easing there is a risk of money being devalued slightly.
So what to do with it?
Buy some residential property for letting?
Buy commercial/industrial property for letting?
Buy shops or office space?
Stock Market?
Precious metals?
Anything else?
Having sold out of 'High street' properties 2 or 3 years ago, I'm kind of pleased that I am no longer in that sector of investment.
Thoughts?
It will obviously depend on your personal circumstances and there are pros and cons of each option. Balancing return and risk is obviously difficult.
The general consensus is that diversification is key. Also bear in mind that tax can make an enormous difference to your return. Maxing out pension contributions is an immediate return if you can tie the money up, albeit at risk of whimsical government changes to the rules. Ditto ISAs etc which will allow tax-free compound growth and income.
Personally it is difficult to see the benefits of property as investments at the moment unless you can pick up a bargain with a good yield; they are tax inefficient to enter and exit, illiquid, and returns can be marginal allowing for tax, costs and potential voids. There is also the hassle factor.
Stocks and shares are more fluid but long term have greater flexibility and can be more tax efficient e.g. using CGT allowance each year.
People complain about premium bonds but it's not a bad place to keep rainy day funds.
The general consensus is that diversification is key. Also bear in mind that tax can make an enormous difference to your return. Maxing out pension contributions is an immediate return if you can tie the money up, albeit at risk of whimsical government changes to the rules. Ditto ISAs etc which will allow tax-free compound growth and income.
Personally it is difficult to see the benefits of property as investments at the moment unless you can pick up a bargain with a good yield; they are tax inefficient to enter and exit, illiquid, and returns can be marginal allowing for tax, costs and potential voids. There is also the hassle factor.
Stocks and shares are more fluid but long term have greater flexibility and can be more tax efficient e.g. using CGT allowance each year.
People complain about premium bonds but it's not a bad place to keep rainy day funds.
Julia121 said:
Rather boringly put in a easy access savings account which pays interest monthly. Spread it over various accounts with different parent companies so you get both FSCS protection and still have access to funds if one wobbles.
Only being protected up to £85k per account does not inspire much confidence, although as you say you can move it if one begins to wobble.The interest is pitiful as well usually, even on saving accounts.
Julia121 said:
Rather boringly put in a easy access savings account which pays interest monthly. Spread it over various accounts with different parent companies so you get both FSCS protection and still have access to funds if one wobbles.
But it's falling in real value - the interest doesn't cover inflation. How long do you plan on leaving your funds invested this way?b
hstewie said:
hstewie said: If you want absolute safety with savings (v investments) go with NS&I which is fully Government backed.
There's a grim reality which is that unless you literally have hundreds of thousands the difference in savings rates is usually peanuts.
That is true. People fret over fractions of a percent here and there which, if converted to actual money, is often just a few quid a year. 'Pint of lager and a packet of crisps please' - oops just spent the difference. Percent are great but it's pounds that count. Otherwise you'll be heading for the '3/4 of 5/8 of fThere's a grim reality which is that unless you literally have hundreds of thousands the difference in savings rates is usually peanuts.
k all' trap.Mr Pointy said:
Julia121 said:
Rather boringly put in a easy access savings account which pays interest monthly. Spread it over various accounts with different parent companies so you get both FSCS protection and still have access to funds if one wobbles.
But it's falling in real value - the interest doesn't cover inflation. How long do you plan on leaving your funds invested this way?If quantitative easing is on the cards again, then money in a bank will fall in value even more.
I already have commercial properties such as large retail park type units, and some recently purchased land for development, but was just wanting to know what other people might be considering doing?
Buy more commercial property units? Buy residential? Managed investment funds? etc
Lord Marylebone said:
This is why I was looking for a bit of discussion on alternatives to just having funds in a bank.
If quantitative easing is on the cards again, then money in a bank will fall in value even more.
I already have commercial properties such as large retail park type units, and some recently purchased land for development, but was just wanting to know what other people might be considering doing?
Buy more commercial property units? Buy residential? Managed investment funds? etc
The problem is that the brief said '...to ensure both security and some returns'. If you want absolute security I don't think you can outstrip inflation. There has to be an element of risk to do that.If quantitative easing is on the cards again, then money in a bank will fall in value even more.
I already have commercial properties such as large retail park type units, and some recently purchased land for development, but was just wanting to know what other people might be considering doing?
Buy more commercial property units? Buy residential? Managed investment funds? etc
If my property fund is anything to go by, I shall buy it some carrots and call it Dobbin!
Saving account interest has gone from pitiful (struggling to get much above 2% in the past five years or so) to almost worthless - 5 year fixed interest now at 0.75%.
At present I am focusing on capital retention. Shares seem like a big risk at the moment. They seem to be defying gravity as so many companies struggling (even before governments pull the plug on wage subsidies). I can’t see how dividends won’t be cut so income yields must fall. Yet prices are staying high.
Similarly property doesn’t look like a good bet. Lots of unemployed people and a depressed economy and lots of buy to let properties.
But it depends on your age and risk appetite. I’m nearing retirement and have no intention of having to rely on work to regenerate my savings because I took a risk that went bad.
At present I am focusing on capital retention. Shares seem like a big risk at the moment. They seem to be defying gravity as so many companies struggling (even before governments pull the plug on wage subsidies). I can’t see how dividends won’t be cut so income yields must fall. Yet prices are staying high.
Similarly property doesn’t look like a good bet. Lots of unemployed people and a depressed economy and lots of buy to let properties.
But it depends on your age and risk appetite. I’m nearing retirement and have no intention of having to rely on work to regenerate my savings because I took a risk that went bad.
Mr Pointy said:
Julia121 said:
Rather boringly put in a easy access savings account which pays interest monthly. Spread it over various accounts with different parent companies so you get both FSCS protection and still have access to funds if one wobbles.
But it's falling in real value - the interest doesn't cover inflation. How long do you plan on leaving your funds invested this way?Lord Marylebone said:
Julia121 said:
Rather boringly put in a easy access savings account which pays interest monthly. Spread it over various accounts with different parent companies so you get both FSCS protection and still have access to funds if one wobbles.
Only being protected up to £85k per account does not inspire much confidence, although as you say you can move it if one begins to wobble.The interest is pitiful as well usually, even on saving accounts.
Esceptico said:
Saving account interest has gone from pitiful (struggling to get much above 2% in the past five years or so) to almost worthless - 5 year fixed interest now at 0.75%.
At present I am focusing on capital retention. Shares seem like a big risk at the moment. They seem to be defying gravity as so many companies struggling (even before governments pull the plug on wage subsidies). I can’t see how dividends won’t be cut so income yields must fall. Yet prices are staying high.
Similarly property doesn’t look like a good bet. Lots of unemployed people and a depressed economy and lots of buy to let properties.
But it depends on your age and risk appetite. I’m nearing retirement and have no intention of having to rely on work to regenerate my savings because I took a risk that went bad.
As you say, it depends on your stage in life and your appetite for risk.At present I am focusing on capital retention. Shares seem like a big risk at the moment. They seem to be defying gravity as so many companies struggling (even before governments pull the plug on wage subsidies). I can’t see how dividends won’t be cut so income yields must fall. Yet prices are staying high.
Similarly property doesn’t look like a good bet. Lots of unemployed people and a depressed economy and lots of buy to let properties.
But it depends on your age and risk appetite. I’m nearing retirement and have no intention of having to rely on work to regenerate my savings because I took a risk that went bad.
The risks of investing in shares can be mitigated somewhat by "drip-feeding" (again, something that you can't do with property). I also agree that the stock market has defied my expectations but it's not as though COVID and Brexit aren't factored in already (at least in part).
Esceptico said:
Saving account interest has gone from pitiful (struggling to get much above 2% in the past five years or so) to almost worthless - 5 year fixed interest now at 0.75%.
At present I am focusing on capital retention. Shares seem like a big risk at the moment. They seem to be defying gravity as so many companies struggling (even before governments pull the plug on wage subsidies). I can’t see how dividends won’t be cut so income yields must fall. Yet prices are staying high.
Similarly property doesn’t look like a good bet. Lots of unemployed people and a depressed economy and lots of buy to let properties.
But it depends on your age and risk appetite. I’m nearing retirement and have no intention of having to rely on work to regenerate my savings because I took a risk that went bad.
I say on a lot of threads but it often comes across as if people think it's either "cash" savings or 100% equity exposure with no in-between.At present I am focusing on capital retention. Shares seem like a big risk at the moment. They seem to be defying gravity as so many companies struggling (even before governments pull the plug on wage subsidies). I can’t see how dividends won’t be cut so income yields must fall. Yet prices are staying high.
Similarly property doesn’t look like a good bet. Lots of unemployed people and a depressed economy and lots of buy to let properties.
But it depends on your age and risk appetite. I’m nearing retirement and have no intention of having to rely on work to regenerate my savings because I took a risk that went bad.
Over the long term cash in the bank is going to lose money.
Could you look at wealth preservation type funds?
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