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2017 Financial Outlook/Investments/Strategy
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Princessxxxx
02-01-2017
Hiya all

Today I have registered wit a financial forum, but unable to post until my registration has been approved.

I'm hoping some that post/read here work, own their own property/s and have or considering again their investment ideas for 2017.

Interest rates are close to zero and one is hard pushed to get more than 1.2%

The Gov changed the way interest is claculated on saving in April 2016 I beleive so paid net as opposed to gross, 1k interest free for 20% tax payers and mum and dad are 40% tax payers they get 500 quid tax free I think, unless using the Isa route.

I have only invested in shares a few times, vis dad's brokers - made a small loss on BT and the postoffice and made up for the loses plus a small net profit when I invested on Morrisons as dad was right he said "share price is too low," then I sold at a profit but would have made a bigger profit if i had held on - timing is the ket.

Mum and dad holding off buying another rental property as they feel property prices and stock will cenrtainly crash in 2017, especially close to the trigerring of article 50 in March


Peer to peer lending gives high returns but risky from what I have read.

I have some premium Bonds and mum and dad hold the max amounts.

Me, and my parents all have Santandar current accounts for max interest as well as Barclays for their first closs premeir banksing.

What are you plans especially re stocks and property, are you buyign, selling or holding?

Thanks
TrollHunter
02-01-2017
I'm probably going to invest in commodities.
Commodities are agricultural products... like coffee that you had for breakfast... wheat, which is used to make bread... pork bellies, which is used to make bacon, which you might find in a 'bacon and lettuce and tomato' sandwich.

MNY x
Moany Liza
02-01-2017
Originally Posted by TrollHunter:
“I'm probably going to invest in commodities.
Commodities are agricultural products... like coffee that you had for breakfast... wheat, which is used to make bread... pork bellies, which is used to make bacon, which you might find in a 'bacon and lettuce and tomato' sandwich.”

Thank God you're here.

Can you make it stop?
highland paddy
02-01-2017
What's considered a good annual return on investment? Or an achievable one?
Eagle9a
02-01-2017
Interesting subject and one that needs a lot of thought and attention to detail...so if I may;-
Bank interest is actually now paid gross rather then net but you are correct in the limits you mention.

As for myself I am looking for income generation rather than capital growth so my strategy involves a combination of Government Gilts, High Dividend UK stock (accepting that the actual share prices may fall), fixed rate (long term) savings accounts and high yield income unit trusts.

I also hold premium bonds which with todays relatively low inflation are not so bad.

There are fixed rate bonds which can pay in excess of 2%, however they are usually 5 year terms and I am not convinced that interest rates will not rise during that time frame. Peer to peer can yield in excess of 8% but is intrinsically risky and not for me I'm afraid.

Over the past 12 months my portfolio yielded a net return of just over 6%...which I am more than happy with....hope this year is as good.
muggins14
02-01-2017
Originally Posted by TrollHunter:
“I'm probably going to invest in commodities.
Commodities are agricultural products... like coffee that you had for breakfast... wheat, which is used to make bread... pork bellies, which is used to make bacon, which you might find in a 'bacon and lettuce and tomato' sandwich.”

Trading Places came to mind straight away when I read your post Obviously
Princessxxxx
02-01-2017
Something I have not cosndiered before but dad has suggested and been reading up on this, ie Investment funds that spreads the risk. You can get general funds that tracks markets, top 100/250 etc, or sectors EG, oil/gas, retail/media/etc - then through my little knowldge of this, diffrent investmen fund managers have different costs and track records, but need to check what protections they have in place re your money
Princessxxxx
02-01-2017
Thank you.

I'm particularly interested in "gilts" but have never been sure if these go up if intrest rates are expected to ris, or do they go down if rates expected to go down?

Re PB's, especially for higher rate tax payers, you are spot on - even good, safe gamble for 20% tax payers like me.

x
Princessxxxx
02-01-2017
Originally Posted by highland paddy:
“What's considered a good annual return on investment? Or an achievable one?”

I guess anything gives you a net profit over the inflation index.

Would have been tempted to buy another rental flat, but the extra 3% tax on top of the usal tax and liklehood of pricess coming down holds me back from that at the moment
tealady
02-01-2017
Originally Posted by Princessxxxx:
“Thank you.

I'm particularly interested in "gilts" but have never been sure if these go up if intrest rates are expected to ris, or do they go down if rates expected to go down?

Re PB's, especially for higher rate tax payers, you are spot on - even good, safe gamble for 20% tax payers like me.

x”

Perhaps you should find out the minimum outlay and of course be willing to accept a loss.
Eagle9a
02-01-2017
Originally Posted by Princessxxxx:
“Thank you.

I'm particularly interested in "gilts" but have never been sure if these go up if intrest rates are expected to ris, or do they go down if rates expected to go down?

Re PB's, especially for higher rate tax payers, you are spot on - even good, safe gamble for 20% tax payers like me.

x”

The cost of buying a gilt depends on the coupon rate...you need to decide whether the price you pay is worth the eventual redemption yield you receive. If you buy a gilt and hold it until redemption date you will almost certainly lose capital but will achieve a fixed rate income.
Princessxxxx
02-01-2017
Originally Posted by Eagle9a:
“The cost of buying a gilt depends on the coupon rate...you need to decide whether the price you pay is worth the eventual redemption yield you receive. If you buy a gilt and hold it until redemption date you will almost certainly lose capital but will achieve a fixed rate income.”


Many thanks. Having read up on this a few time and tying this in with what you said, makes more sense to me now. TBH, still very complexed to me but at least I am more aware.


Another risky option I have considered is what dad does at times, buying "longs/shorts" he tells me to steer clear - he has "limits" set but they do not always work. Dad said only invest into stocks/shares what you can afford to lose. His example was Tesco's seen as a "stalworth" stock and it crashed overnight - he was luck as he "average down and madee a small profit but as he had many thousands of these share, there were som sleepless nights

Thanks again

Eagle9a
02-01-2017
Originally Posted by Princessxxxx:
“Many thanks. Having read up on this a few time and tying this in with what you said, makes more sense to me now. TBH, still very complexed to me but at least I am more aware.


Another risky option I have considered is what dad does at times, buying "longs/shorts" he tells me to steer clear - he has "limits" set but they do not always work. Dad said only invest into stocks/shares what you can afford to lose. His example was Tesco's seen as a "stalworth" stock and it crashed overnight - he was luck as he "average down and madee a small profit but as he had many thousands of these share, there were som sleepless nights

Thanks again

”

I think you need you need to be clear in your mind whether you are a trader or an investor...there is a huge difference. Your dad seems to be more of a trader from what you have said.

As an investor you have to be happy with your overall long term strategy and only make tactical changes when circumstances dictate......a trader will always be tinkering with the portfolio to make short term gains.
Namira
02-01-2017
Does anyone remember the guy on here who's gimmick was misspelling words on purpose?
tealady
02-01-2017
Originally Posted by Eagle9a:
“ Your dad seems to be more of a trader from what you have said.”

if he exists that is.
highland paddy
02-01-2017
Originally Posted by Princessxxxx:
“I guess anything gives you a net profit over the inflation index.

Would have been tempted to buy another rental flat, but the extra 3% tax on top of the usal tax and liklehood of pricess coming down holds me back from that at the moment”

So if you invest ten grand and make a grand profit over a year, that would be a good return?
Eagle9a
02-01-2017
Originally Posted by tealady:
“if he exists that is.”

Indeed. However I like to give the benefit and try to respond to the general discussion, especially when i find the subject interesting....I would like to hear other peoples views on investment in todays climate.
Eagle9a
02-01-2017
Originally Posted by highland paddy:
“So if you invest ten grand and make a grand profit over a year, that would be a good return?”

I would consider that an excellent investment....can you point me in the right direction please (avoiding the many racecourses that exist in the UK)
tealady
02-01-2017
Originally Posted by Eagle9a:
“Indeed. However I like to give the benefit and try to respond to the general discussion, especially when i find the subject interesting....I would like to hear other peoples views on investment in todays climate.”

The safest way to invest in gilts is to buy at inception and hold to maturity. As you note, other ways can lead to capital loss.
For a basic investor, you are probably better with a fund that can invest in a variety of instruments.
Really depends on how long you want to lock away your funds.

I suppose the ideal would be in initial investor in a project that takes off, but finding one is hard and you would have to be prepared for losses.
Moany Liza
02-01-2017
Originally Posted by tealady:
“The safest way to invest in gilts is to buy at inception and hold to maturity. As you note, other ways can lead to capital loss.
For a basic investor, you are probably better with a fund that can invest in a variety of instruments.
Really depends on how long you want to lock away your funds.

I suppose the ideal would be in initial investor in a project that takes off, but finding one is hard and you would have to be prepared for losses.”

For a mere tealady, living on benefits and probably scarcely even able to hold down a part-time job, you know an awful lot about financial management. Princesstwirlypants could learn lots from you if she hung around your trolley.

Have a HobNob

Thanks.

Eagle9a
02-01-2017
Originally Posted by tealady:
“The safest way to invest in gilts is to buy at inception and hold to maturity. As you note, other ways can lead to capital loss.
For a basic investor, you are probably better with a fund that can invest in a variety of instruments.
Really depends on how long you want to lock away your funds.

I suppose the ideal would be in initial investor in a project that takes off, but finding one is hard and you would have to be prepared for losses.”

I think it is essential for any investor (not trader) to have a clear long term strategy ie why am I investing in this particular instrument, so on that premise my views on certain investments would be as follows:-
Bonds/Gilts - need a fixed income for a fixed period, not too worried about capital depreciation

Premium Bonds - Useful for keeping cash in days of low inflation

Equity Investment - Looking for term growth, not worried by market fluctuation

Unit Trusts - A good place to start, can mix income and capital growth

Property - hmmm, not sure I would want to comment on this one at this time, probably dangerous for investors who might need liquidity

Savings accounts - useful but not likely to produce income or capital growth

My opinions only
scottie2121
02-01-2017
I invest in wine.

I have a good 2013 Malbec which is due to mature shortly and I'm looking forward to reaping the benefits of my investment . . . probably this evening.

I have a varied portfolio from a promising 2015 Cabernet Sauvignon to - and I hope to retire on the proceeds of this one - a 1973 Pomagne.
Moany Liza
02-01-2017
Originally Posted by scottie2121:
“I invest in wine.

I have a good 2013 Malbec which is due to mature shortly and I'm looking forward to reaping the benefits of my investment . . . probably this evening.

I have a varied portfolio from a promising 2015 Cabernet Sauvignon to - and I hope to retire on the proceeds of this one - a 1973 Pomagne.”

You should diversify and also move into cheese.
scottie2121
02-01-2017
Originally Posted by Moany Liza:
“You should diversify and also move into cheese. ”

Thanks for the tip. I think I may.

Dairylea Triangles seem to offer a steady return. Plus they're foil wrapped.
LostFool
02-01-2017
Originally Posted by highland paddy:
“What's considered a good annual return on investment? Or an achievable one?”

Investments should always be considered long term to get a good return - at least 10 years. In any given years your investments may go up or down by 50% (or more) but long term you should be looking at an annualised return of 5-10% across a balance portfolio.

2016 was pretty good year for the stock market, especially at the top end of the FTSE. The fall in Sterling after the referendum result meant that overseas earnings are worth more. Over the year it rose 15% in cash terms.

However, the outlook for 2017 is very uncertain so I wouldn't be surprised to see falls this year.
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