Is the FTSE a good place to invest right now (ISA question)?

[mattk]

I'm looking to use up my ISA allowance and I'd like some capital growth, medium risk. I like the look of FTSE 100/250 funds, but I'm concerned that with the FTSE reaching record levels, now might not be the right time to invest my hard earned cash.

Am I being over cautious? Does anyone else have any hidden gems?

[crus]

Profit taking is rife whenevr you hit peaks, combine this with a spate of divs coming up and the short term may look a bittle negative.

If your looking for risk free single digit growth I cant see it being a problem.

D

[bwglaw]

Best place to invest is in properties and get far more return for your investment than the bank or perhaps the stock market would give you.

I have a Maxi ISA but most of my cash is 'hidden' in properties ;)

Thats from my experience - perhaps an appointment with a Financial Advisor would be a good idea.

Jonathan

[crus]

Second that a good ifa will ensure you get a product that suits your requirements of risk, return and availability.

D

[directmarketingadvice]

Matt

I like the look of FTSE 100/250 funds

The FT350 is professionally managed.

That is to say, the majority of the shares held and the shares traded are traded by people who spend every working day studying the companies involved and the movement of the market.

Unless you've got a reason why you believe you can analyse the market better than the pros, why would you believe that you could outperform them?

(BTW, having worked with investment managers, I think it's possible for a market-savvy non-pro to beat them consistently, simply because the pros don't have the flexibility private investors have)

perhaps an appointment with a Financial Advisor would be a good idea.

Or a terrible idea. It depends on the IFA.

I've met enough IFA's who had no idea about the market other than the notion that "it always goes up in the end" (perhaps true, but can you wait up to 25 years to get your money back?). Personally, I wouldn't take any notice of their opinions on where the market is going.

If you know an IFA with a history of calling market trends before they happen, then you might get an answer to your question.

If you can't get an answer, you're just gambling.

Steve

[WakingDragon]

Go and see an IFA by all means, or you can check out thisismoney.com and compare growth track records.

It is also worth seeing if there are any particularly good fixed-term offers on the market. HSBC used to do some blinding fixed term, guaranteed interest products. They usually can be rolled into an ISA wrapper.

The stockmarket is not massively overvalued at present and you should be looking for any equity investment to be over a period of 5-10 years. In that timescale equities usually outperform banks even if there is a short-term drop.

But if you aren't familiar with all the different things then an IFA might advise you better.

[cjd]

Stock market investments are 'fire and forget'. It's a long term investment which by and large will out perform most other investments so long as you take account of a few things.

1. It's a 5-10-20 year investment. Any less than 3, keep it in cash.

2 If you need your cash back at any moment in time you may not get a great deal as the market may not be at a high when you need it - so it needs to be discretionary money.

3. Fees and costs can take a large bite out of your investment - 1.5%pa seems normal which to my mind is theft. I use low cost tracker funds as they consistently outperform all the 'expert' analysts over time and typically only cost 0.5%. You'll need to find them yourself tho' as no-one gets paid commission on them so they aren't marketed. Last time I looked Virgin did a good one, but there's plenty around.

[Cornish Steve]

It's a long term investment which by and large will out perform most other investments.
I couldn't agree more. Invest for the long-term with well-established funds. Don't invest yourself in individual stocks unless you really know the business. Either way, invest for the long-term. Anything less is called gambling.

[mattk]

I was looking at the HSBC FTSE 100 Index Fund or the HSBC FTSE All-Share Index Fund. Both have 0% initial charge and 1%/0.5% annual fee respectively.

I have a very good relationship with HSBC, so like to show customer loyalty!

[WakingDragon]

We have the HSBC UK Income & Growth Fund which we started just as the market started moving up again (in 03 I think). It is a good solid performer but best of all it captures the current trend for companies to pay out decent dividends (although we reinvest all the income).

The asset management team are pretty good at HSBC and they do offer good products so you could do worse.

I disagree that trackers outperform everything else. The 2001 bubble highly distorted the market and and the flight from risk that ensued further damaged more speculative options. Add to that the slump in Japan and it was pretty ropey all round. But now the Far East is rocketing away, Japan is pulling out some nice figures and even Europe is managing to grow a little. Its a good time, if you have the discretionary cash, to get some risk and adventure back in your portfolio.

[Bill.Webster]

Hi Matt,

There is a lot of talk at the moment about markets being due a major correction. Look at a 5 year chart and you will see that the FTSE has been in a continuous uptrend for three years now. History says that this will not go on forever (unfortunately). There will be a correction, and a lot of people think it will be a biggie.

I would echo the comments of those on here who are stressing the long term nature of equity investment i.e. fire and forget. The historical evidence is that an index investment will eventually come "right" over a long enough time period, but where's the logic in having money tied up in negative equity if you could hold it in cash and move into equities at the bottom?

I'd forget the professionals. Get yourself a copy of How to Make Money in Stocks by William J O'Neill and adhere rigidly to his stock selection, timing, and capital preservation guidelines. Wrap up your FTSE investments in online self-select ISA schemes (tax protection but no management charges), and consider holding AIM stocks as spreadbets (but be very, very careful to control your risk using appropriate stop losses).

At the end of the day you have to make up your own mind and clearly no one on here is qualified to give you advice, so tread warily and DYOR - Do Your Own Research!

Good Luck!

Bill

[WakingDragon]

Unless you have the time and application to research continually managing your own portfolio of direct equities, bonds etc is very risky. Steer clear - HSBC would probably be a good route.

I trained as an IFA years ago and worked in the City for a few years, but I can't tell you much without knowing your situation fully. Get an IFA and they will work out the best solution for you on the basis of your attitude to risk and medium/long term plans. Obviously you will have to pay them but actually the savings in terms of time and potential mistakes usually offset the fees.

[UK2004]

I worked for a couple of investment banks and sat with the markets for 12 hours a day, after that I wouldn't putmy money in any equity fund or fixed income fund! Personally I think the markets have factored in the geopolitical threats at present of terrorism and are far more stable now than they have been in the last five years, I don't see a major equity market slump, playing with money always depend son time you have, you cna only really play short term currencies and equities if you have time on your hands and some fundamental and technical knowledge of the markets, anything else is gonna be medium to long term, personally if I were you and I haven't read the whoel thread I don't know how much money you are playing with, I would put the money into property, get yourself regular rental income adn an asset that is pretty stable.