What to Do with £5k or what to invest it in
- Thread starter Stinky
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This. I can't epress how I feel about the amount of waste that happens in these forums and the junk people order when they don't need it.
£5k Troy Trojan Fund O Acc Shares in an ISA.
I should say that I do have a holding in this, and it makes up just over 2% of my portfolio. It is also one of my lowest risk holdings. Please do not take this as advice, and if in doubt seek professional advice etc.
I should say that I do have a holding in this, and it makes up just over 2% of my portfolio. It is also one of my lowest risk holdings. Please do not take this as advice, and if in doubt seek professional advice etc.
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Why would a 5k investor want to track an index? Ridiculous suggestion, and very high risk!!!
He specifically said low risk. Emerging markets are highly volitlile, and often risky in the short term as shown recently. 7bn has been withdrawn from emerging markets of late...take note!
Which one?
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If you don't mind tying your money up for a few years, there are higher interest ISA's on offer, best I've seen in 4%. Obviously, the problem with these being that you if you did need to make a withdrawal within the investment period, you'd have to pay a penalty fee.
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stocks and shares isas
err, CAPM does not take into account inflation..
Also, inflation may erode the value of everything but the problem is that a savings account pays a fixed interest rate whereas other assets (e.g. property, food etc.) can increase in value over and above the inflation rate, leaving your savings account investment far worse off than the value of the rest of things. If you are investing in something that offers a return under the inflation rate you are losing money. It may not matter when you want to buy other things that have had their prices rise at rates under the inflation, but it will if their prices have risen at, or above, inflation rates (which is very likely!).
[TW]Fox;18520194 said:
That's semantics isn't it though? He will lose value of money in both cases, it's just that in the riskier investment his loss will be far greater.
Getting the 5k back intact may have an emotional appeal, and I can understand it, but the truth is that he will have lost money any way you look at it. The physicality of it is inconsequential.
Perhaps not a good idea just right now.
Not sure if £5k is enough capital to get in on a fund with a performance record that justifies the risk.
As I said I wouldn't necessarily recommend that to the op, it was a suggestion to fox. Read the thread!
I don't know much about the subject but £5k seems to strike the odd ground of not being enough to put into low interest accounts, but not little enough to justify the risk of some ventures.
Maybe just get good on a subject and start buying and selling in small amounts of high value items with low risk? Eg cars or whatever.
Maybe just get good on a subject and start buying and selling in small amounts of high value items with low risk? Eg cars or whatever.
![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
Rubbish, you implied he should invest it in something riskier before I joined the thread. My request for you to recommend some was in the context of the OP's question.
Why is passive index tracking high risk? It guarantees that you will not lose more than the market - you are assuming only market risk, thus probably best than any other random investment (unless you have good research discipline and you can identify good opportunities, which the OP does not seem to claim to have).
If you are going to invest in the stock market then a tracker on the S&P500 is probably your lowest risk option (if S&P500 is the benchmark for what kind of portfolio you find appealing/promising, NASDAQ for high tech shares etc.).
Having said that, I'd like to add a caveat in case I (quite possibly) misunderstood you. Investing in an index tracker is possibly the least risky investment IF AND ONLY IF you are want to invest in the stock market. It is NOT the least risky investment if you are willing to consider alternatives (ISAs, Savings, Bonds etc.) in which case I would agree with you.
If you can get the whole £5K into a cash ISA before the 6th of April (current limit on cash ISAs is £5100) you'll be able to add more to it after that date (another £5340 for that tax year). Worth considering because if you miss that deadline you can still put the £5K into an ISA but that's pretty much it until 2012.
NO!
The Indian market has seen the largest outflow of funds during the past couple of months. Investors are taking their money out of India as if the apocalypse is coming there.
Although if you are reeeeeaaaaally risky you could take a complete and utter gamble in putting your money there praying 24/7 the situation will reverse in the next 1-2 years.
If it's long-term investment (12 months+ let's say) I don't see why an index tracker would be as risky as some are claiming. All FTSE indices have trended up since 2008 with annual growth of 22% in 2009 and 9% in 2010. Predictions of the FTSE100 breaking 6000 last year were accurate and stock markets, by and large, have recovered whilst still remaining volatile in the short-term.
There is the risk of what's happening in the Middle East causing a few wobbles for the next couple of months (when Mubarak announced his resignation, markets responded by rallying) but ultimately, as long as oil supplies stay safe and stable there's not a great deal of damage to be done there.
I'd say an index tracker is a good idea. Analysts are predicting 2011 will be a good year for the FTSE indices and all the evidence suggests no reasons that they are wrong.