Premium Bonds - Not a bean for months now!!!!
Discussion
Zoon said:
number2 said:
Seems odd people having so much (multiples of 50k) in premium bonds. Outside of a short term home for cash, it must just be a small part of a multimillion pound investment portfolio 
.
True if you can afford to keep devaluing £100k a year by getting next to no returns on it..Must be the new status symbol
number2 said:
Seems odd people having so much (multiples of 50k) in premium bonds. Outside of a short term home for cash, it must just be a small part of a multimillion pound investment portfolio .
If you're running an equity portfolio in (potentially early) retirement it's received wisdom to keep at least a couple of years living expenses as cash. PB are at least zero risk cash and reasonably quickly accessible..A £ million equity portfolio can potentially return say £100,000 a year, so you stay pretty much all in on equities until you think you have enough, and then buy PBs right at the end of your working life to add robustness to your retirement portfolio.
If I were in a not terribly secure job at present, I'd probably accept the drag of returns of doing similarly, as hopefully the lack of security is compensated for financially, balancing the loss of returns due to carrying some zero return assets.
loskie said:
Zoon said:
number2 said:
Seems odd people having so much (multiples of 50k) in premium bonds. Outside of a short term home for cash, it must just be a small part of a multimillion pound investment portfolio .
True if you can afford to keep devaluing £100k a year by getting next to no returns on it..Must be the new status symbol
number2 said:
Seems odd people having so much (multiples of 50k) in premium bonds. Outside of a short term home for cash, it must just be a small part of a multimillion pound investment portfolio .
Conversely the money that I invested in a S&S ISA is down 1.5 % this year, the same amount in premium bonds has lost nothing..PBs are just for holding cash that you may need access to and do not want to put at risk. It isn't a replacement for investments. If people happen to have 50k sat around that they want to keep as cash thats up to them.
I've pulled money out this month to go in to an ISA, so only hold 5k in PBs currently. I was previously using a Marcus account until they decimated the interest rate.
I've pulled money out this month to go in to an ISA, so only hold 5k in PBs currently. I was previously using a Marcus account until they decimated the interest rate.
n3il123 said:
Conversely the money that I invested in a S&S ISA is down 1.5 % this year, the same amount in premium bonds has lost nothing.
The amount in premium bonds longer term will potentially lose out to inflation, which is less likely of a typical S&S investment for the longer term.If you're down 1.5% this year in S&S though, you've presumably taken a pretty high conviction approach rather than a relatively vanilla investment choice?
xeny said:
The amount in premium bonds longer term will potentially lose out to inflation, which is less likely of a typical S&S investment for the longer term.
If you're down 1.5% this year in S&S though, you've presumably taken a pretty high conviction approach rather than a relatively vanilla investment choice?
Yes I appreciate that PB will suffer because of inflation, I was using it as an example is all.If you're down 1.5% this year in S&S though, you've presumably taken a pretty high conviction approach rather than a relatively vanilla investment choice?
n3il123 said:
Yes I appreciate that PB will suffer because of inflation, I was using it as an example is all.
It's the typical trade off - the less risk you take the less return you get in the longer term (at least sometimes less than inflation). Risk assets tend in the long term to exceed inflation, but at the cost of volatility.Liquidity/certainty costs you money, but with the benefit you at least know how much money you have.
xeny said:
n3il123 said:
Conversely the money that I invested in a S&S ISA is down 1.5 % this year, the same amount in premium bonds has lost nothing.
The amount in premium bonds longer term will potentially lose out to inflation, which is less likely of a typical S&S investment for the longer term.If you're down 1.5% this year in S&S though, you've presumably taken a pretty high conviction approach rather than a relatively vanilla investment choice?
Going to start filtering out of bonds as a result, slowly but in the 6 months had bonds, it would of gained allot more in ISA (vs the odd small win)
Zoon said:
n3il123 said:
Conversely the money that I invested in a S&S ISA is down 1.5 % this year, the same amount in premium bonds has lost nothing.
Crikey what did you put the money in?My worst performing fund is up 14%
ruprechtmonkeyboy said:
Was going to say, other than gold I don't think there is anything over the last year that hasn't gone up significantly!
PH Equity from intellegent money. over a 6 month period i'm down by 0.62 % as of today and I appreciate that there are number of factors like putting money in regularly rather than a lump sum. I was just using it as an example.
n3il123 said:
PH Equity from intellegent money.
over a 6 month period i'm down by 0.62 % as of today and I appreciate that there are number of factors like putting money in regularly rather than a lump sum. I was just using it as an example.
Thats outragous. I would bin that fund asap. Must have no clue what they are doing!over a 6 month period i'm down by 0.62 % as of today and I appreciate that there are number of factors like putting money in regularly rather than a lump sum. I was just using it as an example.
n3il123 said:
PH Equity from intellegent money.
over a 6 month period i'm down by 0.62 % as of today and I appreciate that there are number of factors like putting money in regularly rather than a lump sum. I was just using it as an example.
past 6 months is rather different from either YTD, or past 12 months - I don't think I did that well in November/December last year, and for these kind of short periods with equities, good or bad months really matter. For me at least fortunately April has been relatively good.over a 6 month period i'm down by 0.62 % as of today and I appreciate that there are number of factors like putting money in regularly rather than a lump sum. I was just using it as an example.
20:20 hindsight isn't worth a row of beans.
PB returns are so poor that you might as well treat it like the national lottery. In other words,
PB returns are so poor that you might as well treat it like the national lottery. In other words,
- Hold the bare minimum of PBs. Returns are so poor that it makes no difference how many you hold.
- Buy a lottery ticket each month. Returns are so poor that it makes no difference how many you buy.
- Keep your cash on deposit at the bank with at least some tax free interest.
- You're more likely to die of something horrible in the next few weeks than to get a big win, but
- You've got to be in it to win it.
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