Putting 6k in an ISA is just going to make the bank money and pay bonus' for its staff.
Then 10 years later the bank goes bankrupt, and you lose it all, and the bank gets bailed out by the taxes you pay on your earnings so that its top boys can have even bigger bonuses.
Proof of Concept: Northern Rock
Last edited by thesmileyone69; 18-05-2012 at 00:55.
Hmm, i've seen you post on about gold, but he will simply be buying 'paper' gold, which is fueled simply be speculation. Buying paper gold means that you will not own the gold that you buy OP, you own a promise to receive physical gold. If you want to buy PHYSICAL gold, as diggy states, it costs about $51,000 dollars a kilo, rougly $1500 an ounce, so its your choice but don't be fooled into investing in something that has 'gold' written on it.
(Original post by diggy)
I only say Gold because comparative to these other things the OP always has something stable
Say he really needed money he could quickly get the cash from gold
Whereas bonds and stuff is very risky
PLUS he can wear the gold
Last edited by DontBeJelBeReem; 18-05-2012 at 16:36.
It depends on how little/much risk you're willing to go for, and how long you will be holding the money off for.
I have to disagree with how risky some people say the stock market is today. Obviously the stock market is volatile (as always), but currently there is a huge opportunity to invest in the stock market since many shares are undervalued.
FTSE100 firms, aka blue-chip companies (the 100 largest firms on the London Stock Exchange by market capital, i.e. what it's worth) usually have the lowest risk. Firms such as Morrisons, Aviva and Royal Dutch Shell FTSE100 firms.
Regardless of how much the share price is now, it is much more important to look at the fundamentals of the company (their balance sheet, debt, growth potential, operating areas/countries etc.) If the fundamentals are good, then it is likely that the company can weather the economic storm and their share price will be appropriate valued in time. Since many of these big companies are undervalued at the moment, they present themselves as great opportunities if you're willing to hold for at least several years.
The other thing you can look out for is whether companies pay out dividends or not. Dividends are essentially quarterly or half yearly payments to shareholders, and they vary from company to company. It is often higher than the 3% of most good ISA accounts nowadays. Again, Morrisons, Aviva, Shell, BP, Tesco etc. all pay out dividends.
Therefore, if you do your research into a FTSE100 company with strong fundamentals which is currently undervalued in price, AND if it pays out dividends, then it's a win-win situation - you have a stream of income from dividends equivalent to (or maybe greater than) interest from an ISA account, and in future when/if the share price rise you can sell it for a profit.
Investing in blue-chip companies that pay out dividends is generally considered as low risk.
But the disadvantages/things that can go badly may include:
- You don't know when to buy the shares, since they may go even lower (Greece might leave the eurozone, Spain and Italy still have their problems, France's future with a new president opposed to austerity measures etc.)
- Your company may go bust (though if it's a FTSE100 firm with solid fundamentals, i.e. you've done proper research, then the chances of a wrong pick will be minimised)
If you do decide to invest in the stock market, then do look at it in a medium- and long-term time scale, and also don't just buy one share. Diversifying your portfolio also reduces risk (i.e. buy many shares from different industries).
Last advice, take a look at articles on The Motley Fool (www.fool.co.uk), often with intriguing reads. You can also learn more about investing on the website, listen to their podcasts etc. They're also an online stock broker (I use them!)
Hope it's helpful
PS: I would stay away from gold since people invest in it as a means to preserve the value of their wealth. Gold prices have already been driven to quite a high price, plus you don't really get much of a return on it. My understanding is that investment in gold is more of a "store" of wealth, rather than as a tool for creating a return on your investment.
Last edited by lemoncha; 19-05-2012 at 00:58.
Reason: PS bit