Savings And Investments

[lupestripe]

With inflation outstripping interest rates on nearly all savings accounts and ISAs perhaps now is the time to look at other ways of maximizing returns.

I have never turned to the markets but I may have to study this more in-depth. Investing in BP or banking may be a good idea after recent events but the current climate makes things uncertain in both sectors (Middle East unrest in one, Portugal's crisis and new tax levies on the other). I have never been a fan of risk so where is best - commodities?

Pensions is another thing I am considering but I simply do not trust them. Governments and financial authorities seem to make the rules up as they go along and I feel this is a big black hole in which to pour money on the off chance I survive to whatever the retirement age will be in 40 years time. The BoE can't predict the financial situation next year accurately so who is to say what the state of the world will be in 2050? These are gut feelings rather than ones of any education so I do need to look into this further.

Aside from that, what else is there? Megadog linked me to a bond which looks interesting and I may consider locking money away for an extended period of time to gain higher interest. I don't have loads of spare cash but it would be nice for it to do some work for me rather than devaluing over time.

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Comments

[albrecht-fur.livejournal.com]

I've been thinking the exact same things. Savings accounts just doesn't give any sort of meaningful return.
I'd be interested to hear what you find out.

[lupestripe.livejournal.com]

I am thinking of discussing things over with an independent financial advisor. It annoys me that home owners are being rewarded - again - whilst the rest of us suffer.

[rustyfox.livejournal.com]

I'll probably shove some money into those bonds on a 3 or 5 year term (depending on what they offer). I figure in the short term it's a wise place to put money given the low-interest/high-inflation rates, but I guess in the longer term other traditional savings accounts would yield higher returns. These times are, after all, (hopefully!) just a blip in the grand scheme of things, and not the way it'll be forever.

[lupestripe.livejournal.com]

It depends what the markets do in the next few years but I don't see things picking up until around 2014 at the very earliest so a 3 year bond may be the best thing to do. I do hope this is a temporary blip - I am very frustrated with it all.

[richter-x.livejournal.com]

I'll probably be investing in 1 oz. Silver Coin. That way if the dollar does to shite I'll still have something with actual value.

[slinkat.livejournal.com]

Exactly what I've been doing. Nice store of value, tangible and collectable, if you go for bullion coins rather than 1oz art bars. Very easy to buy, and you can build a nice litle collection of Britannias, Silver Eagles, Maples and Philharmonics for not much outlay. Only drawback (in the UK at least) is you pay VAT. Gold is free of such drawbacks, but a 1oz Kruggerand is a somewhat heftier proposition, and the fractional gold coins are too small when you get down to affordable levels.

Would be wary of savings bonds. The rates might be better, but you have to tie your cash up, so you lose flexibility. What about a shares ISA? Average in each month and it's inexpensive as long as you keep an eye on the charges, although that's not an issue with trackers. All manner of commodity funds and ETFs out there, from sensible (FTSE all share etc) to hugely volatile (junior miners, junior oil E&P etc). Also have the likes of BullionVault and Gold Money which are worth a look, although the storage fees are a bit high for low values. You can buy gold in a SIPP now, which is an interesting idea.

[lupestripe.livejournal.com]

Shares ISAs are only really good if you know what you are doing. In that case, I would have to consult a financial advisor. With bonds, I think not much will change in the next three years so perhaps this is a small risk worth taking.

I'll check the other links soon - where would you store bullion and the like. Surely not in your own home?

[lupestripe.livejournal.com]

Where do you store such things?

[richter-x.livejournal.com]

I don't own any yet, but when I do it certainly won't be at the bank.

[lupestripe.livejournal.com]

Where would it be?

[bariki.livejournal.com]

For something that's readily convertible into cash, Premium Bonds offer a tax efficient way to save. They don't bear interest, but each £1 you invest gets you one 'ticket' in a monthly prize draw - and the prizes are tax free. So far, in the 13 months I've had mine, I've made a 12.5% return, but I'm a lucky bastard and your mileage may vary. :P

The bonds are issued by HM Government, so it's one of the safest investments there is. Of course, there is the chance that you will win nothing and will simply have your investment eroded by inflation.

[lupestripe.livejournal.com]

The fear is having a 0% return of course, which assumedly can happen. I have never been the luckiest in the world. 12.5% is pretty good though :)

[stuart-otterson.livejournal.com]

Pop into your local Co-op Bank and make an appointment to talk about investing. From what I understand they specialise in ethical investments, I presume not to be just some corporate half hearted boast, but something they believe in because they are owned by their members.

On the other hand I won't refuse if you invest cider in me in return for many laughs and crazy discussions.

[lupestripe.livejournal.com]

Cider investments are definitely the way to go! I am going to buy an orchard.

[klepsydra.livejournal.com]

One of the more interesting things in the recent budget (and not widely reported) was the reintroduction later this year of index-linked treasury bonds. These should be well worth considering once they're available.

[lupestripe.livejournal.com]

Do you have a link to this - it would be good to read more ^^

[londonwolf.livejournal.com]

I've heard that the National Savings Certificates (http://www.nsandi.com/savings-index-linked-savings-certificates) provide a good return with little risk, and are tax free :)

[lupestripe.livejournal.com]

Thanks for the suggestion. At the moment, it looks like they are not on offer but this is definitely something worth considering :)