Investments
Investments: When considering investments it will be one of the major decisions you ever make and because of this we at Moneyandme aim to give you some practical information during the course of this page including pitfalls, products to consider, some indication as to how the top performing funds have done and most importantly you get the right product that matches your attitude to risk. After reading this page we hope it will have given you more confidence in selecting the right investments for your needs. Also remember that you can invest a lump sum into a pensions fund or purchase an annuity with your investment.
Investments Attitude To Risk
Investments Attitude To Risk: The most important part of any investments you make are to ensure they match your attitude to risk. Your attitude to risk should be considered for 5-10 years as this is the length of time your investments should be held for. There is generally 3 attitude to risks to consider which are cautious, balanced and adventurous. We will discuss them in more detail during this page and give you an insight into some of the products that fall into each category.
Stocks and Shares Isa
Stocks and Shares Isa: These are the most tax efficient way for anybody wishing to consider investments so we recommend you use your Isa allowance first before considering any other types of investments. The current investment amount is £10200 per year for every individual although this may be subject to change in the future. When investing in a stocks and shares Isa you can select unit trusts, OEIC's and corporate bonds which are all available inside and outside of the Isa wrapper. Fund ranges within the stocks and shares Isa can meet all 3 attitudes to risk.
Best Investments Cautious
Best Investments Cautious: We will give you some idea how cautious balanced and adventurous funds have performed over a 5 year period and you can either compare them against your current investments or you could possibly consider them for your new investments. Here we will highlight cautious fund performance and during the page we will give you balanced and adventurous the best investments for Unit Trusts and OEIC's under a cautious managed fund returned 71.7% for the number one and 42.3% for the fifth top fund. As you can see good fund managers can still produce good returns over the medium to long term. Remember that both Unit Trusts and OEIC's can be held within a stocks and shares Isa. These figures are not guaranteed and cautious managed funds can rise as well as fall now and in the future.
Stocks and Shares Isa
Stocks and Shares Isa: All previous investments held under a PEP are now classed as Isa and have the same rules apply to them. If you are unhappy with the performance of your Isa you can transfer it to another provider without loosing the tax benefits attached to it. If you consider this then please bare in mind that their will be a cost associated with the transfer but sometimes you are better paying a transfer fee to allow you to select better performing funds than just leaving it with a fund that has not performed to your expectations. Our panel of investment advisors will help you make this choice if you think this is the best course of action available.
Best Investments Balanced
Best Investments Balanced: We have looked at the best performing balanced managed funds over the last 5 years under Unit Trusts and OEIC's so you can see what the best performing funds under this category are doing. Remember that people who have a balanced attitude to risk have the potential to make more from their investments but also have the potential to loose more of their investment than people with a cautious attitude to risk. The best performing fund has returned 109.7% over five years and the fifth best performing fund has produced 66% over the same period. Remember these figures are not guaranteed as funds fluctuate on a daily basis.
Unit Trusts
Unit Trusts: These are a type of pooled investment where the fund manager buys and sells shares in different companies and you buy shares in the fund. You have no control over what the investment manager buys and sells but will be able to get a breakdown of the spread of shares held within the fund before you invest. This is an open ended investment as the number of units rise and fall as investors buy and sell units. Remember Unit Trusts can fall within the 3 attitude to risks described above so please ensure you select the appropriate funds to match your attitude to risk. Also remember that these type of funds can rise as well as fall and their is no guarantee that your fund will perform as expected.
Best Investments Adventurous
Best Investments Adventurous: We will now take a look at the performance of adventurous funds and give you an insight into how the best performing funds in this sector have performed for Unit Trusts and OEIC's. The best performing fund has returned 261.4% over the last five years and the fifth best performing fund has returned 208.1% over the same period. If this is the type of investment that you typically invest in and your funds are not performing as well as this then it is maybe time to review your portfolio of investments. Please remember that people who invest in this type of investment must be prepared to loose all of their investment as this can happen with the type of shares that is dealt in with the fund manager.
OEIC's
OEIC's: These are the same as Unit Trusts in that they are open ended investments. The main difference between OEIC's, and Unit Trusts is their is no bid offer price in the OEIC's like the Unit Trusts so the price you see for buying and selling in an OEIC is the same. If you have a Unit Trust the buying and selling price will be different typically as much as 5%.
OEIC's are generally a cheaper investment than that of a Unit Trust because they have a number of sub funds where a Unit Trust needs to hold these as separate investments so if you are looking for an investment with low charges then the OEIC's are probably more suited to you although you may find restriction of funds available through the OEIC's.
Investment Advisor
Investment Advisor: When selecting an investment advisor make sure of the following to get the maximum exposure for your investment needs. We would always recommend that you use an Independent investment advisor for your investment needs and not a tied advisor as they have limited funds to offer you. Typical tied advisors are those within your bank, St James Palace advisors your mutual fund advisors and many more. We are not questioning the advice they give but purely pointing out that they have limited funds to choose from. Independent Investment Advisors have no loyalty to any company or particular fund and have the whole of the UK market to select funds most appropriate to your needs. Generally their is very little difference in cost in setting up your investments through either a tied advisor of Independent investment advisor and this is why we would recommend you use an independent investment advisor. To find an independent Investment Advisor please use the investment advice button and we will be happy to help. All of the above funds we have demonstrated above are not available through tied advisors.
Investment Bonds
Investment Bonds: Most investment bonds are a whole of life policy with many companies returning 101% of the initial investment on death less any withdrawals taken from the investment bond during the period of investment. Your initial investment can be split into many funds with many companies offering Guarantees on your initial investment. Income can be withdrawn each month or annually up to 7.5% but this could be subject to tax on payment depending on your circumstances, if you take an income of 5% or less then this is classed as tax deferred as you will only receive a return of capital over a 20 year period. Our Investment advisors will be happy to explain this in more detail if you are thinking about investing in an investment bond.
Investments Summary
Investments Summary: Moneyandme hope you have found this page usefully in understanding some of the investments available to you in the UK and would appreciate any feedback you have on this or any other page you have visited on the site so we can improve the experience for other visitors. Simply fill out the feedback form at the top left of this page and we will take all points of view into consideration for the future development of the site. We would also like to take this opportunity of thanking you for taking the time to read this information and hope it has been of benefit to you, if you would like further information on any of the products described or any other investment product then please use the contact button below and we will get in touch with you at our first opportunity.
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