Where do you invest?

[Fred Bloggs]

I've tried investing in single company stocks and had a lot more losers than winners over the last 25 years. I conclude that the best way to invest in stocks is monthly into unit trusts run my managers who have a long term track record. All the data is out there. Even they go through bad periods, but over the longer term the odds are in your favour. Monthly investing sometimes termed "pound cost averaging" means you buy more units when the market is dropping and less when it's rising so the long term average cost is always in your favour. It isn't a glamorous or sexy strategy but it does work. If this strategy fails, I think it's the end of capitalism as we know it and we're all stuffed anyway. HTH.

[DonkeyRhubarb]

Short term is a mugs game.

Short-term trading is a "zero-sum" game where the winners cancel out the losers. (Actually, it's even worse than that when you factor in trading costs.) A few people succeed but the majority lose or barely break even.

Most people take too many risks and don't last long in this business. However, fortunately for the professional traders, there is never a shortage of new mugs to take their place.

[Emigre]

Absolutely. The time to buy is when no-one else wants to.

The original poster said:

Nothings seems like a good idea now - stocks will likely plummet for a while still, so will the houses (besides I could only afford a single bathroom on Iceland).

Stock market corrections/crashes tend to be a lot shorter than the property market. We may not have hit the bottom yet but which ever way you look at it, now is a better time to buy than a year ago (shares are much cheaper).

IMO, property still has a fair way to go. The best time will be when joe public has fallen out of love with it like in the mid 90s and it no longer seems like a good investment.

The majority of investors miss the first 40 to 50% of any upturn. Its based on confidence, they're not confident until they've actually seen it happening... which in effect means that a big chunk has happened!

I'm hearing that people are beginning to register with estate agents again. You're totally right about the respective timings of recovery in stocks and properties. Personally, I feel this recession will be short and sharp and that the stock market is perhaps already consolidating.

OP is looking for an investment. Short term is a mugs game. Put as much as possible into ISAs (tax free returns) and invest in ETFs where your risk is diversified across a sector or region.

[DonkeyRhubarb]

My ISA funds have also taking a severe beating this year, but it doesn't bother me either because it's not even 10% of my portfolio (7k a year LOL). I will certainly be putting more into higher risk funds this year and next, to take advantage of the lower prices.

A downturn is the best time to invest for the longer term. A lot of the population can't afford to invest in a recession but if you can, then pile in big time.

Absolutely. The time to buy is when no-one else wants to.

The original poster said:

Nothings seems like a good idea now - stocks will likely plummet for a while still, so will the houses (besides I could only afford a single bathroom on Iceland).

Stock market corrections/crashes tend to be a lot shorter than the property market. We may not have hit the bottom yet but which ever way you look at it, now is a better time to buy than a year ago (shares are much cheaper).

IMO, property still has a fair way to go. The best time will be when joe public has fallen out of love with it like in the mid 90s and it no longer seems like a good investment.

[ChimpMaster]

To give you an idea of what high risk means, this fund has fallen almost 60% since the beginning of the year.

My ISA funds have also taking a severe beating this year, but it doesn't bother me either because it's not even 10% of my portfolio (7k a year LOL). I will certainly be putting more into higher risk funds this year and next, to take advantage of the lower prices.

A downturn is the best time to invest for the longer term. A lot of the population can't afford to invest in a recession but if you can, then pile in big time.

[DonkeyRhubarb]

Risk and Return

People often assume high risk = high return but unfortunately it's not quite as simple as that. High risk offers the potential of higher return but also a greater risk that a higher return will not be achieved. There are no guarantees.

I have taken a very high (calculated) risk with a small personal pension and invested it all in a BRIC fund for the next 20 years. I'm not dependent on this pension so it doesn't matter if it's worth a fortune or peanuts in 20 years.

To give you an idea of what high risk means, this fund has fallen almost 60% since the beginning of the year.

[Ardesco]

I used to work with somebody who played with the markets and did fairly well out of it and his top tips were as follows:

• Minimum investment amount is £5,000, anything less isn't worth it.
• Invest in blocks of £5,000 in different shares and different markets to ensure you don't keep all you eggs in one basket.
• Make sure you set up stop losses so that if a stock starts to dive its auto sold. You may lose a bit on some stocks but if the dot com bust happens again you won't lose it all.

Seems fairly sensible to me, but then I know not a lot about the stock market

[ChimpMaster]

I think you guys missed the main point:-

I'm ready to take about half of it and invest aggressively (with the risk of losing some of it)

You can't get stellar returns with corporate bonds or a tracker.

If chaotic was experienced enough I would recommend covered warrants or options, to take advantage of leveraging over the course of the next 12 months or so. You can buys warrants in gold too, which is a good bet for the next 12 months.

However, a simpler thing would be to just buy beaten down shares in a company that still offers potential when the economy recovers (you need to give it 5 years).

[DimPrawn]

Buy to Let.

Boomed!

[pmeswani]

I have a small amount of money and it's just idling there on an ISA.

I'm ready to take about half of it and invest aggressively (with the risk of losing some of it). How do you guys go about investing your savings?

Nothings seems like a good idea now - stocks will likely plummet for a while still, so will the houses (besides I could only afford a single bathroom on Iceland).

Joining up with others and investing in start-ups maybe?

Put it in some Corporate Bonds and Gilts. Safe bet. That is what I have done with some of my pension investments (SIPP). No regrets.

[Turion]

Invest in a cheap FTSE tracker. Index yields 5% in divis and is real cheap. Should have big capital gains over next 3 years.

[ChimpMaster]

If you really want to take a chance, get into the stock market. By a high risk stock like a house builder or a bank and let it sit there for 5 years.

[xchaotic]

Just like I wrote before, I am aware of the risks that's why I'd be only investing half of it.

[TykeMerc]

It depends how you feel about risk and how much you can afford to lose. There's no holy grail investment idea that fits all.

For me I keep my savings in cash in a mortgage offset account, it saves me tax, pays a decent rate of return in reduction of my mortgage outgoings and is immediately accessible as cash if i need it.

[xchaotic]

I have a small amount of money and it's just idling there on an ISA.

I'm ready to take about half of it and invest aggressively (with the risk of losing some of it). How do you guys go about investing your savings?

Nothings seems like a good idea now - stocks will likely plummet for a while still, so will the houses (besides I could only afford a single bathroom on Iceland).

Joining up with others and investing in start-ups maybe?