What would you do differently in my circumstances

Islander13

Long time lurker, first time poster in this forum, enjoy the content.

Would enjoy a critique of my investment strategy as I'm no expert in the markets.

Profile 30yrs old, no dependents, no mortgage

Investments as follows

90k cash - Euro - Demand deposit at 3%

Equities - in value rather than share number

40k - Tesco
24k - BP
17k - British Land
8k - Aviva
8k - ICAP
5k - BOI

My query is, given my age, profile etc, am I foolish to leave my cash in boring ish investments such as the above and should I start to go up the risk curve given that I have no real pressing need for the above cash and it would not affect my lifestyle given that I live off a salary?

Also given the differential between income and CGT rates, are dividend paying stocks a bit of a mugs game from a tax point of view?

Jim2007

One of the most important rules is never to take on more risk than you need to, to active your investing objectives. So what are your objectives???

Enda_Hall

Investment with any bank at the moment has to be seen as a serious risk, deposit guarantees are only as good as the DGS that stands behind them. I was in a similar situation in Sept. last year. I had a substantial amount of capital which I was looking to invest and put some serious time into assessing my options. I did not go with the banks for a few different reasons. I felt that the deposit guarantee scheme is completely devoid of any real worth in that if it was ever called upon there is no capital there to secure it. At the very best it would be time-locked (much like property funds in 2008 and ongoing) and the loss in value on the euro would be substantial. Also the service led alot to be desired and the rates were generally outperformed by inflation effectively depreciating my capital. I was relatively new to investment and sought advice from my father who suggested a long standing life company with a far superior financial rating. I met with a guy from there and invested in a series of mixed asset funds. Early days yet but the the charges were low and the value is up 15% already. Investment date was 22nd Sept. 2011. I get monthly updates sent to my email and have mobile access whenever I need it. I am learning as I go but it certainly has far exceeded my expectations thus far. I would say that I seem to have been lucky with the person I'm dealing with though as I have found him very easy to deal with and very professional. I too was looking to increase my portfolio with regards to asset allocation and have now opened my investment into emerging markets/Japanese/Chinese & Us equities while allowing approx 40% of my fund to remain in safer managed funds. Not sure if this is of any help to you but I have found that perhaps it is a safer way of gaining experience in turbulent markets.

delux

40k - Tesco
24k - BP
17k - British Land
8k - Aviva
8k - ICAP
5k - BOI

Just out of interest how much are you getting in dividends from these stocks at the moment? I'm interested to see after tax how much of a yield this will be..and we can compare this to the 3% on deposit. (maybe you'd also technically have to factor in the currency change for the UK stocks?)

Are you getting the 3% on deposit for the whole 90K? Some banks will give 3% for the first 10K and then drop the rate over 10k.

Islander13

Thanks for the above folks.

I havent really considered in my depth what my goal is beyond wanting to grow capital value at minimum risk possible. Sounds and probably is wooly but given that I don't have a specific item I want to buy or retirement requirement etc. its the best I can do

Take on board the banking concerns, hence why I'm keeping it on demand rather than fixing which will allow flexibility if required. It is at 3% for the entire which is reasonable and should keep pace with inflation.

On funds, I think its something thats attractive subject to being comfortable with fund costs. What kind of commission level is typical. I'm sure it varies somewhat but just wouldn't like to be paying excessive fees for someone who just broadly tracks index performance

The Irish Riddler

Enda_Hall wrote: »

Investment with any bank at the moment has to be seen as a serious risk, deposit guarantees are only as good as the DGS that stands behind them. I was in a similar situation in Sept. last year. I had a substantial amount of capital which I was looking to invest and put some serious time into assessing my options. I did not go with the banks for a few different reasons. I felt that the deposit guarantee scheme is completely devoid of any real worth in that if it was ever called upon there is no capital there to secure it. At the very best it would be time-locked (much like property funds in 2008 and ongoing) and the loss in value on the euro would be substantial. Also the service led alot to be desired and the rates were generally outperformed by inflation effectively depreciating my capital. I was relatively new to investment and sought advice from my father who suggested a long standing life company with a far superior financial rating. I met with a guy from there and invested in a series of mixed asset funds. Early days yet but the the charges were low and the value is up 15% already. Investment date was 22nd Sept. 2011. I get monthly updates sent to my email and have mobile access whenever I need it. I am learning as I go but it certainly has far exceeded my expectations thus far. I would say that I seem to have been lucky with the person I'm dealing with though as I have found him very easy to deal with and very professional. I too was looking to increase my portfolio with regards to asset allocation and have now opened my investment into emerging markets/Japanese/Chinese & Us equities while allowing approx 40% of my fund to remain in safer managed funds. Not sure if this is of any help to you but I have found that perhaps it is a safer way of gaining experience in turbulent markets.

would you be willing to go into more detail regarding which stocks/funds you hold?

woodseb

you should diversify alot more that than into different markets and asset classes

6 UK based stocks will not be diversified enough as an entire holding, have a look at some index ETFs, maybe a bit of commodities, fixed income etc

if you want to 'play' with the money and have confidence in your stock picking ability, put it into a few individual stocks, if you want to invest for your future you should go down the index route