Thanks saves me wasting time opening an account
My mind automatically skipped over the per year part!
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Best savings account?
- Thread starter Merlin5
- Start date
My mind automatically skipped over the per year part!
That's what I mean ...who pays a yearly direct debit? NO ONE!
So why advertise it like that?...just marketing department trickery, to snag new and unaware customers, IMO.
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Nice!
I hope that was intentional!
A global ETF (that trades in £ to keep it simple) within a stocks and shares ISA is recommended for investment beginners for a reason.
I've no regrets.. Despite a few worrying dips if I watch it on a daily basis, I'm noe making about £200 per month profit off of a 20k investment.
I'm now thinking next year I'm going to split my new isa allowance with £15K into my s&s isa and 5k into my cash ISA.
My stocks and shares ISA contains 2 ETFs, one 'all world' at about 60%
And a European ETF at about 40%.
My European ETF is considerably out performing my global one at the moment so I might favour putting more into Europe than 'all world' come next April, but I'll see how it goes.
The lines get blurred a bit between saving and investing, and investing in a global ETF is basically as safe as you can play it really, unless you invest in bonds as well as equities, such as a Vanguard life strategy 60/40 or whatever.
But that said, it sounds like you have most of your capital in very safe places anyway.. So to start out, 100% equities global ETF (within a S&S isa) I would say is the most sensible place to start.
Edit.. Don't fall into the trap of buying shares in individual companies, stick with a diverse ETF and you won't go far wrong.
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Underboss
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I've always been too scared about those
I guess that's where the lines get blurred between 'saving' and 'investing'.
So I'm not sure if the savings thread or the investment thread is the right place to talk about, for example a pure equity global etf.
You're still gambling for sure.. But your gambling that over a spread of say 3000 companies, the ones that make money will outweigh the ones that lose.
And with ETF funds they are re-appraised on a semi regular basis, so companies that under perform will have their weight adjusted within the fund..
So for example if Microsoft starts under performing too much, they will adjust its weight in the ETF.. So instead of say 3%
Going to Microsoft, it might be revised down to 1% and they will bump another company or several up on the list.
It's like a managed investment fund with minimal fees.
Long term holding of cash is far risker..
I saw a statistic the other day about the chances of being worse off from some of the main index funds over the course of 20-30 years was practically zero (I think it was a sub 1%).
I think the main issue people typically steer clear of them is because they're not really suitable for short term savings, and people get itchy feet when the stock market suddenly has a few bad weeks and they bail out crystalising those losses.
You're almost better off putting the money aside and writing it off mentally - only to be touched in absolute desperation.
It might be riskier in terms of (typically) falling behind inflation, but otherwise, I don't see how holding money is riskier than investing in a stock market that can up and down massively.
Yeah it's a different mindset, ETF will go up and down on a daily basis, that's just how it is, but your not gambling on making '4.x%' over one year as you do with a cash ISA or regular savings account from a bank.
You're gambling that the average performance of 3000 companies (or whatever) will outweigh the losses made by some of them...so if you are down 2% one day overall, and you're up 3% the next day, then you are up 1% over those 2 days, etc.
Can go up or down massively in the short term sure, but I said long term and the only way is up. While holding in cash over long periods will see you trailing or just keeping up with inflation. Plenty of data out there, so many people in the UK hold cash over decades rather than invest and it keeps them far less wealthy than they should be.
It's not risky in the sense you can lose money, you wont 'lose money' in a traditional savings account, but when you weigh the interest against inflation, performance of the £, rising cost of groceries and other essentials, etc, you're treading water at best, really.
Certainly in the short term, but he did say longer term. Pick any of the main index funds and look at the performance over the last 10 or 20 years and compare that to how much the value of stored cash will have eroded over that same period.
Depends how you think the next few years will go I guess (everything is going down the toilet) but I guess if something bad happens no point having cash anyway haha
I only have the Vanguard FTSE all world option myself, just to keep it more diverse.
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Thats pretty much what I've done, I've got more savings in cash than I do in ETF equities, it's a safety buffer I guess, and I think of my 20k in ETF S&S ISA as play money really, but I think Im going to put more into tax sheltered ETF and less into cash savings going forward, becuse it's doing very well indeed.
But that's where risk tollerence comes in I guess... we could be on the verge of WWIII etc, but theres always 'something'.
That said If you have huge amounts of cash, you don't really need to worry about chasing high returns, you can play it really safe and still make shed loads of money on a very modest interest rate with a super safe account. It really depends on individual circumstances and future plans.
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I'm not saying don't have cash but don't have it all in cash
Underboss
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My chip instant access is going down to 3 percent interest, I'll switch it back to chetwood unless there's a much better alternative?