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How risky is it to keep my savings essentially in the stock market?

I have put the majority of my savings 13000 pounds so far in a variety of stocks and bonds, around 8 or so? Trying to keep the diversification up!

Just wondering if anyone else does this. I have like 700-1000 pounds in cash in my bank account for everyday life, but I usually save in my stocks and shares ISA.

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Original post by fg45344
I have put the majority of my savings 13000 pounds so far in a variety of stocks and bonds, around 8 or so? Trying to keep the diversification up!

Just wondering if anyone else does this. I have like 700-1000 pounds in cash in my bank account for everyday life, but I usually save in my stocks and shares ISA.


Depends on the stock market at the time i guess. I have considered it in the past but decided i'd rather keep getting between 2-4% interest for my 14k rather than there be any chance of losing it all.
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Original post by claireestelle
Depends on the stock market at the time i guess. I have considered it in the past but decided i'd rather keep getting between 2-4% interest for my 14k rather than there be any chance of losing it all.


This is my strategy....

I invest in cheap FTSE 100/Dow 30 stocks that have a proven dividend record, for example BP a few weeks ago. So I get 7/7.5% dividend every year and the stock price is pretty cheap so it's unlikely to drop far below the price I have bought it at. Then I hold forever, reinvesting dividends.

Ofcourse I am happy to take capital gain from a stock, but then it requires me to be more involved with the markets, i.e. being able to predict a bear market.
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Original post by claireestelle
Depends on the stock market at the time i guess. I have considered it in the past but decided i'd rather keep getting between 2-4% interest for my 14k rather than there be any chance of losing it all.


Where can you get 4%! Please show me! :biggrin:

Carney is apparently going to cut the base rate even further, we will be lucky to even get 2% now these days.
Original post by fg45344
Where can you get 4%! Please show me! :biggrin:

Carney is apparently going to cut the base rate even further, we will be lucky to even get 2% now these days.


Club lloyds is 4% if you keep between 4 and 5k their a month, i believe santanders 123 account is similar.(they have monthly fees but their waivered if you transfer at least a certain amount in, club lloyds is £5 but even if you pay the fee, the 6 free cinema tickets probably make up for most of that cost) I then have the remaining 9k spread between a 2% club lloyds monthly saver, a monthly help to buy isa (also 2% i think) and a club lloyds annual saver for the rest.
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Original post by claireestelle
Club lloyds is 4% if you keep between 4 and 5k their a month, i believe santanders 123 account is similar.(they have monthly fees but their waivered if you transfer at least a certain amount in, club lloyds is £5 but even if you pay the fee, the 6 free cinema tickets probably make up for most of that cost) I then have the remaining 9k spread between a 2% club lloyds monthly saver, a monthly help to buy isa (also 2% i think) and a club lloyds annual saver for the rest.


I see, I have this bad habit of chasing yield. Even in the bond market I will not except anything less than 8%. I feel bonds are pretty safe compared to stocks, have you ever invested in bonds?
I have everything in stocks. In fact, I have more than everything in stocks because I have borrowed to put money in stocks.

Obviously it just depends on your personal appetite for risk. A massive crash is like 30 percent and 30 percent of 13k isn't a lot really in terms of your life time income.
Original post by fg45344
I see, I have this bad habit of chasing yield. Even in the bond market I will not except anything less than 8%. I feel bonds are pretty safe compared to stocks, have you ever invested in bonds?


I had some fixed rate bonds when i was younger, but i decided i'd rather be able to access the cash after a while. I m not a risk taker at all, i have plans for the majority of my savings so any level of risk at all is a no no for me, so i just look for the best risk free yield instead.
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Original post by Sternumator
I have everything in stocks. In fact, I have more than everything in stocks because I have borrowed to put money in stocks.

Obviously it just depends on your personal appetite for risk. A massive crash is like 30 percent and 30 percent of 13k isn't a lot really in terms of your life time income.


You borrowed? Wow. What was the interest rate? They say leverage is the quickest way to get rich, but the most dangerous. I don't think I could ever do that, I'm happy to lose my own money but I could never lose the banks and keep sane.

I have some in bonds cos of bear markets, so I get something coming in at least, on top of the dividends. Though I don't know if I should be timing the market, so selling right before a bear market? If I get it wrong, I lose more money, so it might be better to buy and hold and keep reinvesting dividends?
Perhaps you should put half your savings in highly secure bonds, 30% in blue chip shares, 10%, in higher risk stocks and 10% keep in a current account you can access without notice.

Not that I'm an expert or anything
(edited 7 years ago)
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Original post by claireestelle
I had some fixed rate bonds when i was younger, but i decided i'd rather be able to access the cash after a while. I m not a risk taker at all, i have plans for the majority of my savings so any level of risk at all is a no no for me, so i just look for the best risk free yield instead.


Fair enough, both the bond market (the junk end) and the stock market in general carry a fair amount of risk. I feel sorry for us savers these days, we are literally getting peanuts on our bank accounts. Back in the day, you could get 7% in a bank account (this is pre financial crash times), like wow.

I think this will cause more and more savers to dump money in the stock market, junk bond market trying to chase "normal" yield.
Original post by fg45344
Fair enough, both the bond market (the junk end) and the stock market in general carry a fair amount of risk. I feel sorry for us savers these days, we are literally getting peanuts on our bank accounts. Back in the day, you could get 7% in a bank account (this is pre financial crash times), like wow.

I think this will cause more and more savers to dump money in the stock market, junk bond market trying to chase "normal" yield.


Historically inflation rates have been over 20% in some years so in real terms we're not as bad off as we have been in the past.
Original post by fg45344
You borrowed? Wow. What was the interest rate? They say leverage is the quickest way to get rich, but the most dangerous. I don't think I could ever do that, I'm happy to lose my own money but I could never lose the banks and keep sane.

I have some in bonds cos of bear markets, so I get something coming in at least, on top of the dividends. Though I don't know if I should be timing the market, so selling right before a bear market? If I get it wrong, I lose more money, so it might be better to buy and hold and keep reinvesting dividends?


0 percent credit cards. I only borrowed as much as I could afford to make the payments from my none investment income. But still, it is a bit difficult emotionally to have 20k in credit card debt. Once I pay it off I won't be doing it again. Not worth the stress.

There is little evidence that even professional fund managers can successfully time the market so I don't even try. You don't want to be trading a lot because the transaction costs eat into your return. I just buy and hold it.
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Original post by Gora The Xplorer
Historically inflation rates have been over 20% in some years so in real terms we're not as bad off as we have been in the past.


20% wow

So then how can you protect your money? Would the bond market be offering rates higher than inflation? Surely they would have to? And the stock market must be making gains more than 20% a year surely?
Original post by fg45344
Fair enough, both the bond market (the junk end) and the stock market in general carry a fair amount of risk. I feel sorry for us savers these days, we are literally getting peanuts on our bank accounts. Back in the day, you could get 7% in a bank account (this is pre financial crash times), like wow.

I think this will cause more and more savers to dump money in the stock market, junk bond market trying to chase "normal" yield.


I've had this amount of savings since I was 10 (2005) and i never got 7%:P, i m quite happy with 4% really.
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Original post by claireestelle
I've had this amount of savings since I was 10 (2005) and i never got 7%:P, i m quite happy with 4% really.


Maybe it was the icelandic banks...and we know what happened then.

The icelandic banks used to give like 15-20%, something stupid given its a bank account.
Original post by fg45344
Maybe it was the icelandic banks...and we know what happened then.

The icelandic banks used to give like 15-20%, something stupid given its a bank account.


Probably was iceland.
Original post by fg45344
20% wow

So then how can you protect your money? Would the bond market be offering rates higher than inflation? Surely they would have to? And the stock market must be making gains more than 20% a year surely?


You'd be very lucky to get 20% per year on the stock market, UK 10 year gilts have a yield of less than 1% rn.
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Original post by Gora The Xplorer
You'd be very lucky to get 20% per year on the stock market, UK 10 year gilts have a yield of less than 1% rn.


I always thought a good stock doubled in 2 years.

I have got 20% in a few cases, my BP shares have soared 21% in 2 weeks (god knows how) and my Starbucks stock is up 20% for the year.

But yeah 20% is a good stock return for a year, as long as it beats the bond market return you are doing well.
Original post by fg45344
I always thought a good stock doubled in 2 years.


If you knew which stocks were going to double every two years you would be a millionaire

Original post by fg45344

I have got 20% in a few cases, my BP shares have soared 21% in 2 weeks (god knows how) and my Starbucks stock is up 20% for the year.


As above, you should be looking at your weighted average across the entire portfolio rather than your standout successes

Original post by fg45344

But yeah 20% is a good stock return for a year, as long as it beats the bond market return you are doing well.


Of course, but only so long as you beat the bond market.

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