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

It's veeeeeeeeeeeeeryyyyy risky. Correlation and concentration risk are a few of your main worries. If you are going to go down this route I would diversify across several sectors and types of funds, don't go for highly levered ETFs or anything fancy like that. Also if possible, I would take out some of the money and place it into a government bond..

How diversified should I be?

I have a few growth stocks, a bond and a few dividend stocks. I want to focus on dividend stocks, so I eliminate some of the "market turmoil" risk. Like even if the price drops because of panic selling, the dividend will still keep on coming.

Right now I have 8 securities, I want more but currently don't have the money to put in. I usually put around 1.5-2k a security. The transaction costs build up on each security which is an issue. The more securities I hold the more it will cost me in transaction costs to buy and sell.

I find you can hit good diversification with 8-10 securities across different sectors in different countries.

Ah, not as bad as I thought, good thinking with that spread. I'd say for now your set up looks pretty good and you seem smart enough to take into account the various risk exposures you'll be under.

I'd maybe throw in a diversified ETF too - ala Vanguard.


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There is one reason I hate Vanguard and I know this is a bad reason, I feel if you are going to play the markets, you have to beat them. Being super diversified with Vanguard will give you essentially a market return, which is good, but surely if you are motivated and smart enough to deal in the markets, you should be beating them.

I mean I think Vanguard have this fund which holds all 3600 stocks traded on american exchanges or something like that, but there is a lot of crap (like banking stocks right now) which I really don't want to hold.

Though for a novice I always recommend diversified ETFs, like you said. It eliminates unsystematic risk and you don't need to keep track of anything. You can buy and hold.

Ahaha, I can't blame you. It is quite fun to beat the markets and you feel wonderful returning more than the S&P in any given month but I guess for the average joe blogg it would make more sense to take a less 'active' approach.

Sounds like you're thinking about this in the right way, so all I can say is good luck

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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.

My mother bought 15,000 in bonds yesterday... I hope she wins. The bonds become active in December!

Active in december?

Are these premium bonds or bond securities (as in normal bonds-like lending money to a company/government)

I am not fully sure Its a bit like the lottery where you have numbers

http://www.nsandi.com/prize-checker

i stick my money in gold i buy privately then just wait for a rise and cash out

Oh ok, it's premium bonds. Yeah those are a bit different to normal bonds.

You should tell your mum to open up a stocks and shares ISA and buy a diversified vanguard fund, I know its complicated if you've never dealt in finance!

But she can make much more money from that over the long term than premium bonds, unless she is very lucky! But good luck!

Hmm, I have a love-hate affair with gold. I love how it looks and feels and how I can keep playing with it as much as I want! However....

I don't like the fact it doesn't produce steady income for me, I am essentially specualting on the price, what the next guy is willing to pay for the lump of shiny metal. This refers to the theory of income producing investments by warren buffett. You'd rather own a farm that produces eggs, milk etc and still have the farm in the end after 20 years than a farm which produces nothing but you expect it to appreciate in value after 20 years.

But gold is a great hedge against market turmoil and possibly inflation, though not so much the last few years (other than the brexit gold rush)

Thank you for the advice!! Btw how did you come about getting 13k?