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Savings and Investments thread

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  • Swisdom said:

    My partner and I are about to complete a house sale and will need to park about £300k for 12-18 months whilst we sort out a move to the west country (the dates are up in the air as we need to sell the main family house as well). Does anyone have any thoughts as to where we should put the cash other than splitting it between government backed savings accounts?

    Well it just so happens I have come into some magical beans and they are currently on offer for just £299,500.....instant message me if you are interested ;-)
    I've was just mulling over an opportunity to buy a bridge but your magic beans sound really tempting. Could I leave you £299k as a holding deposit?
  • £300k would pay the annual wages of a decent League One target man - what sort of supporter are you?
  • £300k would pay the annual wages of a decent League One target man - what sort of supporter are you?

    I'll run it past the other half.
  • edited March 2018

    @cafcfan Could you tidy up that post, please? And show us the photo of the Landwind? :-)

    Then tell us how your investments will be shielded from the global recession that this clown is forcing upon us all. You are absolutely right about their abuse of IPR. So then the thing to do is build a global consensus on how to protect IPR, surely?

    @LargeAddick Indeed at 1.4% Premium bonds seem to be the best place for a cash deposit right now.

    Wow, don't know what happened there! Done, thanks.

    Anyway, I have no idea about shielding investments. Except to say stuff will get better, sometime. And every cloud as they say: after recent falls, the FTSE 100 is yielding an average 4.14%. With no sign that most constituents will be lowering dividends. Some biggies, in fact all the top six by market capitalisation, are paying more than 5% (HSBC, Shell A, BP, BAT, Shell B and GSK).

    @newyorkaddick has put the situation eloquently. Although I would be interested to know why he has no (commercial) property in his portfolio.

    As for bonds, I've held a few individual bonds in recent years but they've mostly matured and I haven't replaced them. The last remaining is National Grid 8.75% 2025. I bought it at around par some years ago when interest rates were much higher in anticipation of interest rates falling. It's now at £1.4275 Of course, as interest rates increase and maturity approaches the value will drop and it'll be back to par. I'll probably get rid in a couple of years.

    But your question prompted me to look more closely at a couple of corporate bond funds I hold. It's not a pretty sight. Total current value £63k versus £42k purchase price 11 years ago. Inflation makes the original £42k = £58k today so they haven't set the world alight that's for sure! But I suppose they have done better than a regular savings account which would have been in negative territory once inflation is factored in. I guess that's why they are seen as a defensive investment?

    In a way, I suppose, my corp bond funds provide a microcosm of all that goes on with pension funds which have (been forced to) struggled. Their shunning of equities has meant that they've missed out on pretty much all the big gains in the last ten years.
  • edited March 2018
    cafcfan said:

    @cafcfan Could you tidy up that post, please? And show us the photo of the Landwind? :-)

    Then tell us how your investments will be shielded from the global recession that this clown is forcing upon us all. You are absolutely right about their abuse of IPR. So then the thing to do is build a global consensus on how to protect IPR, surely?

    @LargeAddick Indeed at 1.4% Premium bonds seem to be the best place for a cash deposit right now.

    Wow, don't know what happened there! Done, thanks.

    Anyway, I have no idea about shielding investments. Except to say stuff will get better, sometime. And every cloud as they say: after recent falls, the FTSE 100 is yielding an average 4.14%. With no sign that most constituents will be lowering dividends. Some biggies, in fact all the top six by market capitalisation, are paying more than 5% (HSBC, Shell A, BP, BAT, Shell B and GSK).

    @newyorkaddick has put the situation eloquently. Although I would be interested to know why he has no (commercial) property in his portfolio.

    Obviously you have to be careful with a dividend yield based strategy as in many cases the yield is optically quite high precisely because it's about to cut/removed. Moreover high dividend yield stocks (even ones with safe dividends) will perform poorly in a rising interest rate environment.

    With regard to property (commercial or otherwise), it doesn't interest me as an asset class - too illiquid and returns are unexciting without leverage (obviously a typical BTL investor will have mountains of leverage hence the apparent attraction of the asset class when expressed that way).
  • edited March 2018

    My partner and I are about to complete a house sale and will need to park about £300k for 12-18 months whilst we sort out a move to the west country (the dates are up in the air as we need to sell the main family house as well). Does anyone have any thoughts as to where we should put the cash other than splitting it between government backed savings accounts?

    Similar issue for my brother sister and I re the estate of our late Mum. So I am maxing out the Premium Bonds £50k because at 1.4% you beat the rate of virtually any other instant access cash account. And it seems that with the max. investment you are most likely to at least get your 1.4%, and maybe something more.

    Bank bond accounts for that period of time don't offer much more than 1.4%. if you check Money Saving Expert or Which they list the best deals.

    4 months running now I've had £75 so annualised if that continues is 1.8% tax free or 3% before tax as a comparison.

    Although it's not all rosey, in that time my wife's amassed a huge sum of £25!

    Worth the 3 year fixed at 2.2% with NS&I also, even if you cash in at year 1 it isn't bad (effectively lose 90 days interest, i.e. pays 1.65%).
  • @newyorkaddick very much appreciated, thank you.
  • cafcfan said:

    Markets tanking today on fears of a trade war. That was coming, they have been going sideways since the last dip, so I was wondering if we have in fact already entered a bear market, or at least very modest capital returns in equity markets.

    Commentators have already written about adopting a more "defensive" strategy. So my question is, what does such a strategy look like, in 2018, what do you invest in? Traditionally the answer has been bonds, but I have never understood well the bond market.

    I have some sympathy with Trump re China. Well, a lot of sympathy actually. China take the piss and just don't care about intellectual property rights. They need a slap.

    Here's a picture of a car:

    image

    Land Rover product, right? Well no, it's a Landwind X7.
    And it happens woth EVERYTHING! Fake Nike stores, fake phones, fakr everything, theres a ¥5 dvd shop next door to my local police station, xiaomi, a leading mobile phone brand here (im using one right now) gets sued by apple in almost every market it tries to enter outside of China.

    It's beyond ridiculous.
  • My partner and I are about to complete a house sale and will need to park about £300k for 12-18 months whilst we sort out a move to the west country (the dates are up in the air as we need to sell the main family house as well). Does anyone have any thoughts as to where we should put the cash other than splitting it between government backed savings accounts?

    I'd do that & probably go for 1 yr fixed as will pay a better rate. Look on moneysavingsexpert.

  • cafcfan said:

    @cafcfan Could you tidy up that post, please? And show us the photo of the Landwind? :-)

    Then tell us how your investments will be shielded from the global recession that this clown is forcing upon us all. You are absolutely right about their abuse of IPR. So then the thing to do is build a global consensus on how to protect IPR, surely?

    @LargeAddick Indeed at 1.4% Premium bonds seem to be the best place for a cash deposit right now.

    Wow, don't know what happened there! Done, thanks.

    Anyway, I have no idea about shielding investments. Except to say stuff will get better, sometime. And every cloud as they say: after recent falls, the FTSE 100 is yielding an average 4.14%. With no sign that most constituents will be lowering dividends. Some biggies, in fact all the top six by market capitalisation, are paying more than 5% (HSBC, Shell A, BP, BAT, Shell B and GSK).

    @newyorkaddick has put the situation eloquently. Although I would be interested to know why he has no (commercial) property in his portfolio.

    Obviously you have to be careful with a dividend yield based strategy as in many cases the yield is optically quite high precisely because it's about to cut/removed. Moreover high dividend yield stocks (even ones with safe divide

    With regard to property (commercial or otherwise), it doesn't interest me as an asset class nds) will perform poorly in a rising interest rate environment.

    - too illiquid and returns are unexciting without leverage (obviously a typical BTL investor will have mountains of leverage hence the apparent attraction of the asset class when expressed that way).
    Speaking as an IFA I would say that it should form part of a well balanced portfolio. I usually advise a mix of equities (UK, US, Europe, Asia, Emerging markets), fixed interest (corporate bonds, high yields, government bonds) & commercial property. Apart from 2 periods, during the last 20 years commercial property has done well. Nothing stellar, but a safe 8% -10% pa. Yes its illiquid & the last couple of "busts" have been mainly down to the fact that investment funds have been unable to pay out to clients & therefore had to "close" them for a while. I usually use mutual funds (OEIC's) & don't often use trackers.

    Recent meetings I've attended have said that they are positive on Asia & emerging markets, Europe & US (for another 12-18 months) - this was before this week's musings by Mr Trump - UK negative (Brexit) and again negative on corporate & government bonds but positive high yield bonds. I'm also using a couple of "hedging" funds - CF UK Absolute & JPM Macro Opportunities have both stood up well in the recent downturn.

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  • Markets tanking today on fears of a trade war. That was coming, they have been going sideways since the last dip, so I was wondering if we have in fact already entered a bear market, or at least very modest capital returns in equity markets.

    Commentators have already written about adopting a more "defensive" strategy. So my question is, what does such a strategy look like, in 2018, what do you invest in? Traditionally the answer has been bonds, but I have never understood well the bond market.

    The capital value of bonds and the capital value of equities traditionally tend to move in opposite directions - “non-correlating” so the defensive nature is really countering some of the downside losses when equities fall. You naturally are foregoing upside when equities rise.

    BUT QE and low interest rates have distorted the pricing mechanisms, and as interest rates fell, both bonds and equities rose, and bonds actually outperformed equities. Bonds can only now bomb downwards when interest rates and inflation rise, regardless of equity values.

    Private debt gives a fixed income but forget capital appreciation so could be seen as defensive compared to equities with volatile capital value. “Defensive” “Diversification” “Non-correlating” can all amount to the same thing.


  • Golfie, I fear that commercial property funds with daily dealing has the makings of the next financial scandal (as you note there was a small whiff if it after the Brexit vote).
  • Golfie, I fear that commercial property funds with daily dealing has the makings of the next financial scandal (as you note there was a small whiff if it after the Brexit vote).

    Don't quite follow. The reason that property funds have problems when there are "crashes" or "corrections" is that the fund managers just can't liquidate their holdings the same way an equity or bond fund can. Some property funds are now holding 8% -12% in cash just in case, but then their performance figures don't look as good as some of their peers if they do. As long as investors understand this then there shouldn't be a problem. I don't see where you think there could be a "scandal"
  • It's a complete asset/liability mismatch - if there was a run on the funds then they would be forced to suspend redemptions and liquidate, a process which would take years.
  • Thanks for the feedback. The NS&I and premium bond investments hadn't occured to me and I'm looking into both now.
  • It's a complete asset/liability mismatch - if there was a run on the funds then they would be forced to suspend redemptions and liquidate, a process which would take years.

    Last time it happened funds were suspended for around 3-6 months. Nobody went bust & clients just had to wait for their money. All my clients realise this & the first thing I do when there is ever a "panic" is remind them why they invested in the first place. If any want to sell their holdings then they don't usually sell up it their entirety in any case.

    Makes me laugh when there is a run on a bank. I still remember people queuing round the block when Northern Rock had problems. EVERY asset class carries a risk.
  • My partner and I are about to complete a house sale and will need to park about £300k for 12-18 months whilst we sort out a move to the west country (the dates are up in the air as we need to sell the main family house as well). Does anyone have any thoughts as to where we should put the cash other than splitting it between government backed savings accounts?

    Buy banksy works.. I can hook you up with a good gallery
  • edited March 2018
    shine166 said:

    My partner and I are about to complete a house sale and will need to park about £300k for 12-18 months whilst we sort out a move to the west country (the dates are up in the air as we need to sell the main family house as well). Does anyone have any thoughts as to where we should put the cash other than splitting it between government backed savings accounts?

    Buy banksy works.. I can hook you up with a good gallery
    My other half is an art school grad and her old man used to run a department at The Tate. Up to my eyeballs in bloody art :-)
  • Get yourself a couple of pairs of British made classic shotguns @SantaClaus . One way to beat the bank

  • Sawn or unsawn?
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  • Lump it all on Oxford getting promoted
  • I am absolutely mesmerised by the lesson I have received in the past 2 weeks of the long term value in investing in boring "blue-chip" stocks. In this case Unilever.

    Keeping it shortish, my wife worked for Unilever for several years until 2007, and in her annual bonus she remembered opting to buy some shares rather than cash. But when she left, for some reason they lost contact with her, and she was convinced she had lost the right to them. I was sure you can't lose the right to shares you have bought (as opposed to options) and eventually we found them, carefully curated by ABN Amro Bank, whose customer service standards put all British banks to shame, btw.

    Happily, ABN-A told us that her €1500 in shares at end 2005 had grown to over €8,500, plus another €1500 in dividends, (which seems to be sitting in a personal account, which we suppose she can continue to use. It's not a simple matter if you wanted to open a new account like that in NL, but I don't think they will close it unless she asks to..anyway...)

    I started to ponder the performance of the shares, and when I charted it I was gobsmacked. Currently the shares have increased by 236%, whereas in the same period, the FTSE 100 (of which Unilever has always been a constituent) is up only 18%. Basically 18% is all you would be up if you invested in a UK tracker fund. And to the 236% capital gain you can add the dividends, which she has received net of Dutch tax.

    What an extraordinary lesson in the value of investing long term in a boring big company that makes stuff people buy, is well managed and scrutinised, and returns profits to shareholders. Of course, I suspect that if we had known of their existence earlier, we might have been tempted to sell these shares...

    Now the question is what to do with the shares. My wife doesn't have any 'portfolio' so she is totally in hock to Unilever's performance. But looking at that chart, I have to ask myself why she should not retain at least a good chunk of them
  • @PragueAddick just imagine if your wife had used a little more ink and ticked the box to reinvest the dividends!

    I'm assuming your wife got her shares at a discount as 1500 to 8500 is over 550%. Have you also won on exchange rate? (seeing you are quoting in Euro's).

    Personally, if thats her only 'investment' in shares i'd sell (subject to any tax implications). One egg in One basket is far from ideal. Alternatively can she start to buy/invest to dilute the overweight in Unilever?
  • I am absolutely mesmerised by the lesson I have received in the past 2 weeks of the long term value in investing in boring "blue-chip" stocks. In this case Unilever.

    Keeping it shortish, my wife worked for Unilever for several years until 2007, and in her annual bonus she remembered opting to buy some shares rather than cash. But when she left, for some reason they lost contact with her, and she was convinced she had lost the right to them. I was sure you can't lose the right to shares you have bought (as opposed to options) and eventually we found them, carefully curated by ABN Amro Bank, whose customer service standards put all British banks to shame, btw.

    Happily, ABN-A told us that her €1500 in shares at end 2005 had grown to over €8,500, plus another €1500 in dividends, (which seems to be sitting in a personal account, which we suppose she can continue to use. It's not a simple matter if you wanted to open a new account like that in NL, but I don't think they will close it unless she asks to..anyway...)

    I started to ponder the performance of the shares, and when I charted it I was gobsmacked. Currently the shares have increased by 236%, whereas in the same period, the FTSE 100 (of which Unilever has always been a constituent) is up only 18%. Basically 18% is all you would be up if you invested in a UK tracker fund. And to the 236% capital gain you can add the dividends, which she has received net of Dutch tax.

    What an extraordinary lesson in the value of investing long term in a boring big company that makes stuff people buy, is well managed and scrutinised, and returns profits to shareholders. Of course, I suspect that if we had known of their existence earlier, we might have been tempted to sell these shares...

    Now the question is what to do with the shares. My wife doesn't have any 'portfolio' so she is totally in hock to Unilever's performance. But looking at that chart, I have to ask myself why she should not retain at least a good chunk of them

    Reckitt Benckiser is another Anglo/Dutch giant with a similar performance over the same period. (Although well off the high right now.)

    BTW, it was the ABN Amro takeover - possibly the worst in history - which was a major factor in the near-demise of RBS.
  • Rob7Lee said:

    @PragueAddick just imagine if your wife had used a little more ink and ticked the box to reinvest the dividends!

    I'm assuming your wife got her shares at a discount as 1500 to 8500 is over 550%. Have you also won on exchange rate? (seeing you are quoting in Euro's).

    Personally, if thats her only 'investment' in shares i'd sell (subject to any tax implications). One egg in One basket is far from ideal. Alternatively can she start to buy/invest to dilute the overweight in Unilever?

    I had not calculated that increase, and we don't yet have the actual statement from ABN-A. It may be that she made a further purchase a year later, which is not on that statement. It's not a currency thing. The point about the dividend is a good one :-)

    The overall investment problem is that the options locally are piss poor, and ABN-A funds do not look very impressive either, from what I could see on their website. She cannot have her own account with a UK provider like H-L because she isn't UK resident. There are UK financial advisers based here who peddle 'offshore funds", but they are cowboys. So much for the Single Market !
    :-)

    As for their people, every single one spoke perfect English, clearly had a brain and seemed ready to actually solve a problem, and to some extent were happy to talk to me even though I am not the account holder. It was in contrast to Standard Life where I have been building up a savings account for my niece but it is in my sister's name. The Dutch of course are very careful with their money and I guess they simply won't tolerate dumbasses in charge of their savings and investments.

  • Also has anyone heard a rumour of Unilever de-listing from the London market? I assume such rumours are related to their HQ move to Rotterdam, and I think my wife has Dutch listed shares, but it might be good for us to keep an eye out?
  • Also has anyone heard a rumour of Unilever de-listing from the London market? I assume such rumours are related to their HQ move to Rotterdam, and I think my wife has Dutch listed shares, but it might be good for us to keep an eye out?

    No it's not de-listing. BUT as you say, the HQ is switching to Rotterdam alone. BUT and it's a big but the FTSE 100 rules say that constituents must have a UK HQ. So they might get kicked off the index. If that happens, of course, there will be a mass sell-off of the shares as all the index tracker funds will have to bin them!
  • edited April 2018
    The overall investment problem is that the options locally are piss poor, and ABN-A funds do not look very impressive either, from what I could see on their website. She cannot have her own account with a UK provider like H-L because she isn't UK resident. There are UK financial advisers based here who peddle 'offshore funds", but they are cowboys. So much for the Single Market !
    :-)



    It might be worth looking at Internaxx (Luxembourg based), Saxobank (Denmark) or Interactive Brokers (USA). All 3 will allow 'expat' investors and might be of benefit down the line tax-wise. Stay away from anything wrapped by Zurich, Generali, Friends Provident etc as they are the cowboy's best friend.
  • I am absolutely mesmerised by the lesson I have received in the past 2 weeks of the long term value in investing in boring "blue-chip" stocks. In this case Unilever.

    Keeping it shortish, my wife worked for Unilever for several years until 2007, and in her annual bonus she remembered opting to buy some shares rather than cash. But when she left, for some reason they lost contact with her, and she was convinced she had lost the right to them. I was sure you can't lose the right to shares you have bought (as opposed to options) and eventually we found them, carefully curated by ABN Amro Bank, whose customer service standards put all British banks to shame, btw.

    Happily, ABN-A told us that her €1500 in shares at end 2005 had grown to over €8,500, plus another €1500 in dividends, (which seems to be sitting in a personal account, which we suppose she can continue to use. It's not a simple matter if you wanted to open a new account like that in NL, but I don't think they will close it unless she asks to..anyway...)

    I started to ponder the performance of the shares, and when I charted it I was gobsmacked. Currently the shares have increased by 236%, whereas in the same period, the FTSE 100 (of which Unilever has always been a constituent) is up only 18%. Basically 18% is all you would be up if you invested in a UK tracker fund. And to the 236% capital gain you can add the dividends, which she has received net of Dutch tax.

    What an extraordinary lesson in the value of investing long term in a boring big company that makes stuff people buy, is well managed and scrutinised, and returns profits to shareholders. Of course, I suspect that if we had known of their existence earlier, we might have been tempted to sell these shares...

    Now the question is what to do with the shares. My wife doesn't have any 'portfolio' so she is totally in hock to Unilever's performance. But looking at that chart, I have to ask myself why she should not retain at least a good chunk of them

    Id be tempted to reinvest the dividends and let it stay there for next 20 years
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