![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
With investments you MIGHT beat inflation, or you MIGHT lose a considerable amount of money. I suspect that as he's asking OcUK what to do with his savings risky investments are probably not his forte and a savings account is likely the best bet.
What to Do with £5k or what to invest it in
- Thread starter Stinky
- Start date
With investments you MIGHT beat inflation, or you MIGHT lose a considerable amount of money. I suspect that as he's asking OcUK what to do with his savings risky investments are probably not his forte and a savings account is likely the best bet.
You still don't get it. The goal of investing isnt to beat inflation. It is to maximise returns subject to a risk profile.
It's far more complicated than that as you well know. Inflation at 4% doesnt mean everything is 4% more than it was last year. Inflationary pressure is being driven largely by spikes in the prices of a few key items. If his purchasing habits include less of these items and more of others he'll be affected by less than 4%, if you see what I mean.
There are numerous items that cost less now than they did a year ago, for example. They are just not included in the basket of products and services which go into the calculation of RPI and CPI.
[TW]Fox;18520218 said:
Clearly that is obvious he stated it himself and the facts have been laid out for him.
The goal is whatever the investor wants it to be, semantic definition aside.
[TW]Fox;18520230 said:
Of course everyone's individual rate of inflation is going to be different based on their basket of goods, but I can only go by averages.
[TW]Fox;18520230 said:
Even all this is irrelevant.
Fundamentally, cash can be paying a real return of -5% per annum, but if it is the only risk free asset, then it is the baseline. It is the correct asset for all extremely risk averse investors.
No there isn't any other goal. It is ideas like this which allow investment banks to reap 40% margins in trading.
My goal is to beat inflation, I invest in funds with a risk profile to obtain a return that does so, doing quite well actually too.
Soldato
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- 4 Mar 2010
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Gold and silver?
My goal is to beat inflation, I invest in funds with a risk profile to obtain a return that does so, doing quite well actually too.
Maybe you'd like to recommend some if your intention is to advise rather than make everyone think you are some sort of leet investor.
My goal is to beat inflation, I invest in funds with a risk profile to obtain a return that does so, doing quite well actually too.
That is a bizarre way to decide a portfolio. In fact it is so incorrect its a market failure.
This is one of the possible reasons cited for the financial meltdown. Low US interest rates gave an incentive for bankers to pursue risky profiles knowing they had a stop on their losses (from government).
However, you don't have a stop on your losses. Therefore, it is an irrational position to take.
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If you are genuinely someone who handles assets for other people, then that is a shame.
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[TW]Fox;18520314 said:
Index trackers are a low cost investment fund which I would recommend, if you must know.
Why on earth would you think I handle other peoples assets?
I have invested a relatively small amount of my assets I can afford to lose.
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Gosh, how dare we ask about these nicely performing funds in a thread about investing £5k.
Sorry to disturb you, oh mighty investor.
I bow at your ability to talk the talk, err I mean invest prudently.
It's not really enough to make any significant difference investing really, for any decent reward the risk just wouldn't be worth it.
Stick it in an ISA or something and just keep adding to it, or alternatively review your outgoings and see if there is anything you could spend £5k or a portion thereof on which could reduce those which would quite conceivably see a better return than an 'investment'
Stick it in an ISA or something and just keep adding to it, or alternatively review your outgoings and see if there is anything you could spend £5k or a portion thereof on which could reduce those which would quite conceivably see a better return than an 'investment'
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I'm about to BS as much as you have now, but you really think equities will rally further? The rise over the last year was from what I've read the result of the markets realising that a serious global slowdown wasn't happening and that a lot of economies have rebounded very well.
Since its an index tracker, it will be more sensitive to the macro risk and macro growth prospects of the global economy. If you did have index trackers, then you bet on the global economy and have done well. It was a bet nonetheless, although perhaps very well judged.
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If its annoying then start handing out credible advice rather than making pointless posts aimed at giving us the impression you are superior in this field.
The only person in this thread whose posts I am reading on this subject and thinking 'He ACTUALLY DOES know what he is talking about' is ghost101.
[TW]Fox;18520409 said:
In reality I know little
. I have simply stated some principles which should stand as a benchmark. Anyone who has done a decent finance module with a good grasp of economics should know what I said.They aren't always correct, but you have to be smart enough with good rationale as to why these principles don't hold, and that is why financial engineers are paid millions.
[TW]Fox;18520409 said:
I direct you to my first post in the thread. The only one who seems to be getting that impression is you, I'm certainly not intentionally doing it.
I'm not necessarily recommending them to the op I don't like to give out potentially risky advice, but I think if you're new to investing then they can be a nice low charge and low maintenance introduction, and as you say they have served me well over the past year or two.
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