What would be the best way to invest £20,000 ? , I dont need access to this money for the next few years but i dont fancy anything risky.
Any suggestions [sensible ones only please].

What would be the best way to invest £20,000 ? , I dont need access to this money for the next few years but i dont fancy anything risky.
Any suggestions [sensible ones only please].

You have until tonight to apply for a double cash ISA (two doubles if you are married or have a partner) this would sort out £12,000, you simply go for the best rate with no risk involved. The other £8,000 could go in a high interest bearing account and £6,000 could be ISA'd next April and the rest the next year.

Thanks crookesey, I missed the deadline due to work commitments but I think an ISA would be the way to go.

Thanks crookesey, I missed the deadline due to work commitments but I think an ISA would be the way to go.

Don't go for an investment ISA. A friend was advised to do this and ended up losing a significant amount of money, far riskier than they appear!

Don't go for an investment ISA. A friend was advised to do this and ended up losing a significant amount of money, far riskier than they appear!

An ISA is simply a tax efficient wrapper for a variety of investment products. The ISA will only be as safe or risky as the underlying investment. Gordon Brown has sysematically reduced the benefits of holding an ISA, so it may be that it doesn't make any difference whether to buy a product with or without the ISA wrapper.


Nimrod

What do you mean by risky? How much are you prepared to lose? What sort of gains would you like to see?

If you are thinking about investing in a fund, I would advise you to look at on-line IFAs such as Bestinvest (www.bestinvest.co.uk) and a fund supermarket in order to reduce the initial commission from about 5% down to 0.25% or zero. They don't charge any fees for 'Execution Only' transactions. (This sounds more complicated than it really is)

If you can invest it in property!
I had 20,000 to invest when I became 18 and I went for an investment ISA. 7 years later (Post 9-11 etc obviously) It's only worth 19,800 although it has picked up a lot in the past few years :( Maybe I was unlucky but I certainly wont take the risk again.
Alex

A mini cash ISA is what I would go for, as these are not linked to the stock market.

Could also try your luck with premium bonds.

despite advice from other people, i'd recommend stocks/shares ISAs - ok, so they don't always work, some of mine took a real knock on 9/11 and several other occasions, but they've always more than recovered - one of mine (jupiter european fund, i think) grew by 16/17% in the last statement period. OK, they're higher risk than cash ISAs but can often mean much higher reward, if you've chosen wisely, and are prepared to wait a few years to see much return. you can choose investment isas with lower risk, or even ones that are ethical, or only use chinese companies to invest in etc etc. i'm happy enough with investment isas that i'll be opening one for my (currently unborn) daughter fairly soon - hopefully in 18 years it'll bring a smile to her face, although i realise you probably don't want to invest for that long, and can't invest the whole lot in investment isas anyway. my other top tip - people always need places to live, property makes sense (but not student rental properties, the market has dropped right away for that, i looked into buying a house to let last year, the sums don't make it work well anymore). Reckon you really need an independent financial advisor of the professional variety (my grandfather, fortunately for me, has filled this role most impressively!). Good luck.

You have until tonight to apply for a double cash ISA (two doubles if you are married or have a partner) this would sort out £12,000, you simply go for the best rate with no risk involved. The other £8,000 could go in a high interest bearing account and £6,000 could be ISA'd next April and the rest the next year.

This information is incorrect. You can only invest £3000 in a mini cash ISA in any tax year.

I would be reluctant to advise investment in stock market ISAs at the moment, unless you are prepared to invest for a very long period. Markets at the moment are at high levels and there is bound to be a correction at some point.

This information is incorrect. You can only invest £3000 in a mini cash ISA in any tax year.

I would be reluctant to advise investment in stock market ISAs at the moment, unless you are prepared to invest for a very long period. Markets at the moment are at high levels and there is bound to be a correction at some point.

No it is not incorrect, a double cash ISA means using your 2005/2006 and 2006/2007 allowances over a two day period.

£3,000 x 2 = £6,000 x 2 people = £12,000.

An ISA is simply a tax efficient wrapper for a variety of investment products. The ISA will only be as safe or risky as the underlying investment. Gordon Brown has sysematically reduced the benefits of holding an ISA, so it may be that it doesn't make any difference whether to buy a product with or without the ISA wrapper.


Nimrod

What do you mean by risky? How much are you prepared to lose? What sort of gains would you like to see?

If you are thinking about investing in a fund, I would advise you to look at on-line IFAs such as Bestinvest (www.bestinvest.co.uk) and a fund supermarket in order to reduce the initial commission from about 5% down to 0.25% or zero. They don't charge any fees for 'Execution Only' transactions. (This sounds more complicated than it really is)

It is still a good idea, firstly cash ISA's pay gross interest and secondly they don't have to be declared on a tax return.

Gordon Brown scrapped the tax roll up in respect of advanced corporation tax credits held in equity ISA's, so is not an issue with a cash ISA.

No it is not incorrect, a double cash ISA means using your 2005/2006 and 2006/2007 allowances over a two day period.

£3,000 x 2 = £6,000 x 2 people = £12,000.


I suggest you re read your initial post. You make no mention of two tax years. Your post implies that two people could invest £12,000 in a tax year, which is incorrect. They can invest only half this amount in mini cash ISAs in any one tax year.

I suggest you re read your initial post. You make no mention of two tax years. Your post implies that two people could invest £12,000 in a tax year, which is incorrect. They can invest only half this amount in mini cash ISAs in any one tax year.

LordChaverly is once again trying to force his over inflated opinion of himself on us. He simply has never heard of a double ISA, no implication was made that the investment would fall into a single tax year which I am sure that many of you understood.

He stated in a previous post that he would be reluctant to advise investment in stockmarket Isa's at the moment. I am certain that he does not possess the qualifications to offer advice but if I am wrong perhaps he could show us his and I could show you mine.

The none generic and 100% correct advice that I posted has been dismissed by his lordship on the grounds that he simply didn't understand it. What he does not know does not exist, only in his head though.

LordChaverly is once again trying to force his over inflated opinion of himself on us. He simply has never heard of a double ISA, no implication was made that the investment would fall into a single tax year which I am sure that many of you understood.

He stated in a previous post that he would be reluctant to advise investment in stockmarket Isa's at the moment. I am certain that he does not possess the qualifications to offer advice but if I am wrong perhaps he could show us his and I could show you mine.

The none generic and 100% correct advice that I posted has been dismissed by his lordship on the grounds that he simply didn't understand it. What he does not know does not exist, only in his head though.

You are supposed to be giving advice to lay persons and your initial post was a classic example of how the former can be misinformed. Again, if you re-read your post, it clearly implies that two people could invest £12,000 in a tax year, which is of course wrong and indeed illegal (as many people who have made this mistake have discovered. I suggest that if you are a financial adviser, a re-training course is in order so that you can give, unambiguous advice to your customers.

As for investment in stock market ISAs, I know these are currently being pushed on gullible people by financial advisors such as yourself, who will no doubt receive hefty commissions for so doing. Many who have taken this advice in stock market boom periods are now sitting on huge losses (not of course the advisors or investment firms, who still get their commissions, regardless). If you do not understand that it is wise to tread very carefully indeed into stock market investment in boom periods, then you know nothing about how financial markets work.

It is still a good idea, firstly cash ISA's pay gross interest and secondly they don't have to be declared on a tax return.

Gordon Brown scrapped the tax roll up in respect of advanced corporation tax credits held in equity ISA's, so is not an issue with a cash ISA.

I didn't intend to suggest that there was no benefit from having an ISA. I was trying to make the point that the underlying investment is what is important.

With £20,000 to spend, there is no way (now) to invest all of it in an ISA. In my view the most important thing to do first is to decide on a range of product types which fit in with the purchasers risk/reward objectives and then after that to fill in the details i.e. which provider, which funds, which product to have as the ISA.

I didn't intend to suggest that there was no benefit from having an ISA. I was trying to make the point that the underlying investment is what is important.

With £20,000 to spend, there is no way (now) to invest all of it in an ISA. In my view the most important thing to do first is to decide on a range of product types which fit in with the purchasers risk/reward objectives and then after that to fill in the details i.e. which provider, which funds, which product to have as the ISA.

True but if the attitude to risk is very low then cash comes to mind and the best product is quite simply the one paying the highest rate (preferably one that guarantees X percentage over Bank of England Base).

There are no low risk equity investments, believe me. However a little selected reading on screen or on paper will help you to make an informed judgement.

True but if the attitude to risk is very low then cash comes to mind and the best product is quite simply the one paying the highest rate (preferably one that guarantees X percentage over Bank of England Base).

There are no low risk equity investments, believe me. However a little selected reading on screen or on paper will help you to make an informed judgement.

This is why it is vital to pin down the attitude to risk.

For me personally, a cash investment equates to zero risk, which isn't quite the same thing as 'not risky'.
'Low risk' would include a number of equity based investment such as income funds and funds that include bonds.
'Risky' would be something like Japanese smaller companies.

It is a matter of how the individual (in this case the OP) defines risk.

You seem to set great store by your status as a 'qualified' financial advisor. I humbly suggest that the reputation of this 'profession' hardly warrants unquestioning faith, as the huge volumes of complaints to the FSA against financial advisors shows. Indeed, given the huge amounts of bad, and often self serving, advice, given by many of these supposedly sagacious beings, I would suggest that a hefty degree of scepticism is in order whenever they open their mouths.


Please dont tar us all with the same brush, I have only recently started out in this career and I can assure you that my intentions are to help people and give the "best advice" without exception. It is disheartening to know that the profession I have chosen is so mistrusted, as always the minority ruin it for the majority and the good we do is not often if ever publicised.

This is why it is vital to pin down the attitude to risk.

For me personally, a cash investment equates to zero risk, which isn't quite the same thing as 'not risky'.
'Low risk' would include a number of equity based investment such as income funds and funds that include bonds.
'Risky' would be something like Japanese smaller companies.

It is a matter of how the individual (in this case the OP) defines risk.

That's why it's so difficult, bonds are usually government bonds ie government debt. A new series of these has been launched and around 20 of the countries who's debt we are being encouraged to buy into are on the Foreign Offices 'don't go there' list.

Fund managers who were the first to buy big into British Rubber when AIDS became an issue are worthy of consideration. It's backing your own judgment that's important, if John Lewis were a listed share then I would feel far better with them than say TJ Hughes, but I could be wrong.

MOD NOTE. I have just cleaned up this thread after a few minor disagreements between posters. Please can we keep it civil this time.

MOD NOTE. I have just cleaned up this thread after a few minor disagreements between posters. Please can we keep it civil this time.

Thank you for returning the thread Cloudybay. :thumbsup:

That's why it's so difficult, bonds are usually government bonds ie government debt. A new series of these has been launched and around 20 of the countries who's debt we are being encouraged to buy into are on the Foreign Offices 'don't go there' list.

Fund managers who were the first to buy big into British Rubber when AIDS became an issue are worthy of consideration. It's backing your own judgment that's important, if John Lewis were a listed share then I would feel far better with them than say TJ Hughes, but I could be wrong.

I was thinking of corporate bonds, but you have raised an interesting point about the increased 'riskiness' in the market.

Equities, bonds, gilts and property all seem to be fully if not over valued, which is a very unusual . This has been accompanied by unheard of levels of private and public debt. If the two factors are related, the increased rate of bankruptcies and repossessions would indicate that investment prospects are bleak, as LordC has stated.

As fund managers struggle to find value, they tend to drift towards the riskier end of the investment spectrum, as you have identified, especially as consumer confidence has returned. Again, a classic scenario for a sharp correction.

It is not all doom and gloom though. There is a way of investing such that the worst effects of a turbulent market are avoided, and that is to contribute a monthly amount. If the value of the fund falls, the number of units that you can buy that month goes up and when the market returns to its previous level, you are better off than if the market had stayed flat.

There is another hedge in times of trouble. The interesting thing here is that it seems to be another bubble in progress. I won't say what it is but here's a clue from Shirley Bassey...

Mister Goldfinger.
Pretty girl beware of this heart of gold
This heart is cold.

He loves only gold,
Only gold.
He loves gold.
He loves only gold,
Only gold.
He loves gold.

I was thinking of corporate bonds, but you have raised an interesting point about the increased 'riskiness' in the market.

Equities, bonds, gilts and property all seem to be fully if not over valued, which is a very unusual . This has been accompanied by unheard of levels of private and public debt. If the two factors are related, the increased rate of bankruptcies and repossessions would indicate that investment prospects are bleak, as LordC has stated.

As fund managers struggle to find value, they tend to drift towards the riskier end of the investment spectrum, as you have identified, especially as consumer confidence has returned. Again, a classic scenario for a sharp correction.

It is not all doom and gloom though. There is a way of investing such that the worst effects of a turbulent market are avoided, and that is to contribute a monthly amount. If the value of the fund falls, the number of units that you can buy that month goes up and when the market returns to its previous level, you are better off than if the market had stayed flat.
There is another hedge in times of trouble. The interesting thing here is that it seems to be another bubble in progress. I won't say what it is but here's a clue from Shirley Bassey...

Mister Goldfinger.
Pretty girl beware of this heart of gold
This heart is cold.

He loves only gold,
Only gold.
He loves gold.
He loves only gold,
Only gold.
He loves gold.

A very good point, it's known as 'pound cost averaging' and I couldn't have explained it better.

You are supposed to be giving advice to lay persons and your initial post was a classic example of how the former can be misinformed. Again, if you re-read your post, it clearly implies that two people could invest £12,000 in a tax year, which is of course wrong and indeed illegal (as many people who have made this mistake have discovered. I suggest that if you are a financial adviser, a re-training course is in order so that you can give, unambiguous advice to your customers.

As for investment in stock market ISAs, I know these are currently being pushed on gullible people by financial advisors such as yourself, who will no doubt receive hefty commissions for so doing. Many who have taken this advice in stock market boom periods are now sitting on huge losses (not of course the advisors or investment firms, who still get their commissions, regardless). If you do not understand that it is wise to tread very carefully indeed into stock market investment in boom periods, then you know nothing about how financial markets work.

As the 'clean up' has made this a little one sided I beg to remind members that I posted none generic information on cash ISA's. LordC is once again putting two and two together and coming up with twenty seven. I would also respectfully request that the MOD should instruct him to curb his insulting accusations.

I have just arranged 2 double cash ISA's for my wife and myself that guarantee a rate of 1.45% over Bank of England base rate, not exciting but very safe. Also cash ISA's do not pay commission to advisers, they are simply a gross deposit account with maximum investment rules.

Please dont tar us all with the same brush, I have only recently started out in this career and I can assure you that my intentions are to help people and give the "best advice" without exception. It is disheartening to know that the profession I have chosen is so mistrusted, as always the minority ruin it for the majority and the good we do is not often if ever publicised.

You tell him keila.

...

There is another hedge in times of trouble. The interesting thing here is that it seems to be another bubble in progress. I won't say what it is but here's a clue from Shirley Bassey...

Mister Goldfinger.
Pretty girl beware of this heart of gold
This heart is cold.

He loves only gold,
Only gold.
He loves gold.
He loves only gold,
Only gold.
He loves gold.

It's all guesswork isn't it? Some guesses are better than others though (http://www.ft.com/cms/s/0/f51c6cec-c280-11dc-801e-0000779fd2ac.html). :)

What would be the best way to invest £20,000 ? , I dont need access to this money for the next few years but i dont fancy anything risky.
Any suggestions [sensible ones only please].

Go to Dave Allens casino and put it all on number 13. If it comes up you will be laughing. Even if it doesn't you will at least have had a night out.

I would make one payment of £20.000 into a private pension scheme. I did this in 1989 it is now worth quite a bit of money, and l can take 25% anytime l want on a tax free basis

I was thinking of corporate bonds, but you have raised an interesting point about the increased 'riskiness' in the market.

Equities, bonds, gilts and property all seem to be fully if not over valued, which is a very unusual . This has been accompanied by unheard of levels of private and public debt. If the two factors are related, the increased rate of bankruptcies and repossessions would indicate that investment prospects are bleak, as LordC has stated.

As fund managers struggle to find value, they tend to drift towards the riskier end of the investment spectrum, as you have identified, especially as consumer confidence has returned. Again, a classic scenario for a sharp correction.

It is not all doom and gloom though. There is a way of investing such that the worst effects of a turbulent market are avoided, and that is to contribute a monthly amount. If the value of the fund falls, the number of units that you can buy that month goes up and when the market returns to its previous level, you are better off than if the market had stayed flat.

There is another hedge in times of trouble. The interesting thing here is that it seems to be another bubble in progress. I won't say what it is but here's a clue from Shirley Bassey...

Mister Goldfinger.
Pretty girl beware of this heart of gold
This heart is cold.

He loves only gold,
Only gold.
He loves gold.
He loves only gold,
Only gold.
He loves gold.

I'm not going to keep banging on about this but it does seem worthwhile to note certain landmarks (http://news.bbc.co.uk/1/hi/business/7294040.stm)

Put £5000 in four separate building society's accounts and forget it until you suddenly decided you want to use it. The extra bit of interest by keeping it together is not worth taking the risk.

Always remember ' Higher to yield - Higher the risk ' and you won't worry and you will always sleep at night.

I'm not going to keep banging on about this but it does seem worthwhile to note certain landmarks (http://news.bbc.co.uk/1/hi/business/7294040.stm)

And again... (http://www.bbc.co.uk/news/business-13153263)

but I think an ISA would be the way to go.

Bear in mind that with RPI inflation at over 5% you will need to get an interest rate of at least 5.5% just to stand still.

The Bank of England say that inflation will be lower in 18 months but they always say that, in reality they've missed all their inflation targets for the last 10 years.

The Bank of England’s core inflation forecast virtually always converge towards UK Inflation hitting its 2% CPI target in 2 years time which statistically fails to happen 96% of the time. This also means that the forecast trend also fails to be achieved as is usually the case within a matter of months from the publication of each quarterly inflation report as we have seen for the whole of 2010. Off course as illustrated above the Bank of England uses a wide fan chart mechanism to ensure that all eventualities are covered therefore technically the BOE forecasts can never be wrong as the forecast fan continues to expand going forward as the most recent inflation report illustrates that in 2 years time UK inflation could be between 4% and -1%. However whilst this may fool the the government, it amounts to a worthless exercise when it comes to actually making personal and business decisions.

LINK (http://thedailygold.com/chartstechnicals/the-real-reason-for-bank-of-englands-worthless-cpi-inflation-forecasts/?p=4177/)


Savers 'lose' £400 a year due to inflation

Savers are effectively being left £400 out of pocket every year on their £10,000 investments due to the rising cost of living.

The latest rise in inflation means higher rate taxpayers need more than 7 per cent to avoid losing money on their savings once inflation and tax is taken into account, while basic rate taxpayers need 5.5 per cent.

LINK (http://uk.finance.yahoo.com/news/Savers-lose-400-year-due-tele-2862516380.html?x=0&.v=1)

Basically savers (the prudent) are having to take it up the 'arris to bail out the feckless, the overextended and those who paid too much for their houses in the recent bubble.

Interest rates were cut to save house prices – and banks (http://dofonline.co.uk/blogs/the-edge/interest-rates/uk-interest-rates-45645645/)

Heaven forfend that people should ever have to face the consequences of their bad financial decisions.


Inflation surge means savers are losing money (http://www.guardian.co.uk/money/2010/apr/20/inflation-surge-savers-losing-money)

Nine in 10 middle-class savers earn no real return on their cash (http://www.telegraph.co.uk/finance/personalfinance/6589523/Nine-in-10-middle-class-savers-earn-no-real-return-on-their-cash.html)

Savers lose out on £60bn in interest (http://www.thisismoney.co.uk/savings-and-banking/article.html?in_article_id=521215&in_page_id=7)

Middle-class savers told no point in saving (http://www.telegraph.co.uk/finance/personalfinance/savings/6818145/Middle-class-savers-told-no-point-in-saving.html)

In the current market you might get an ISA paying around 3%, meaning that you will lose around 2% or more of the purchasing power of your money (which is what inflation really amounts to) per year, around £400/£500 a year in your case.

Might as well flush that £400+ down the loo, it's quicker after all and there's no forms to fill in.

I have just arranged 2 double cash ISA's for my wife and myself that guarantee a rate of 1.45% over Bank of England base rate, not exciting but very safe.

Yep, guaranteed..... to lose money.

That's less than 2% at a time when inflation is over 5% (and that's trusting the official figures).

Yep, guaranteed..... to lose money.

That's less than 2% at a time when inflation is over 5% (and that's trusting the official figures).

Except that you are responding to a post from 2006 when inflation was extremely low so the cash ISA wouldn't have lost him money :hihi:

And again... (http://www.bbc.co.uk/news/business-13153263)

Didn't you say that gold was experiencing a bubble back in 2006 (the implication being not to invest in it)?

But the price today is more than double what it was in 2006... It's been climbing steadily now for 2 years (although how much longer that can go on is the key question).

I suggest you re read your initial post. You make no mention of two tax years. Your post implies that two people could invest £12,000 in a tax year, which is incorrect. They can invest only half this amount in mini cash ISAs in any one tax year.

An individual can pay up to £5,340 each tax year into a cash ISA. Personally I wouldn't bother as the return is less than inflation anyhow.

What would be the best way to invest £20,000 ? , I dont need access to this money for the next few years but i dont fancy anything risky.
Any suggestions [sensible ones only please].

As intrest is awful at the momemnt relative to inflation, i'd recommend switching to an offset mortgage, and overpaying it by £20K which you allowed to do on these products without peanlity, reducing your intrest bill massively.

Thats if you have a mortgage.

I wouldn't take investment advice from anyone who replies to a 5 year old post as if it were made recently!

but i dont fancy anything risky.

I was going to suggest trebling your money by hiring a small plane in Florida, flying to Columbia, buying some local produce and flying back and selling it in Miami.

Only risky if you get greedy and try to do it more than once! :D

John X

Didn't you say that gold was experiencing a bubble back in 2006 (the implication being not to invest in it)?

But the price today is more than double what it was in 2006... It's been climbing steadily now for 2 years (although how much longer that can go on is the key question).

Yes I did say it. But that wasn't necessarily the implication.

How long its price can go on rising is indeed the question. One that should be answered in terms of events rather than time.

Can anybody recommend where I might get really sound Independent Financial Advice? I have a lump sum that I would like to invest so that I can receive an income.

I use Charles James in Dronfield, but bear in mind, anything invested that has any risk may not perform, irrespective of how good the advice is, Therefore you will not get any income, plus you still pay for the advice. The other methods would be a bond, where the interest is paid monthly. You can get 4%+ if you lock it away for 3+years. Property rental could be a viable way if you have enough, but it doesn't come hassle free!

The risk of 3 years is of course that interest rates go up in the next 12 months and you're tied into what becomes an uncompetitive rate. But it does let you budget for the income though and it's better than keeping it in a savings account.

premium bonds?? With that amount in your pretty much guaranteed a win ever month?