What to do with 15 000 pounds

Ah - so all this tax stuff happens inside the fund? I personally don't have to worry about paying income tax on the interest? Do the figures quoted by equities ISAs refer to the performance after all the tax shenanigans?

Right. And this is invisible to me, except as slightly better performance of the fund in these cases?

So my dream fund is probably 40% FTSE all-share tracker and 60% gilts or invesetment-grade bonds. Do the tax rules apply at the level of funds or accounts? Can i get an ISA and wrap a tracker fund and a bond fund, in a

40:60 ratio, and avoid the tax, or would i have to find a single fund that did something like that?

Will do.

tom

Reply to
Tom Anderson
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But at a higher risk, presumably?

I see from the archives that you're in favour of Exchange Traded Funds instead of trackers, as they're cheaper. There are tracker funds with an annual charge of 0.3% (and a total expense ratio of

Reply to
Tom Anderson

Bulls**t! The reason we have no industry left is because it's so much cheaper to do it in India / China etc. If you want a long term approach I suggest you get out of property, as equities will always outperform property over a long enough period of time. But, let's face some facts, the recent army of BTL 'investors' are all short term, they have no concept of what property does over 30, 40, 50, 60 years otherwise they'd be buying businesses not bricks. It's the classic case of looking at what's happened the last 5 or 10 years and thinking it'll go on for ever. Ah well, the folly of the masses is at last amusing

Reply to
Robin Peters

Reply to
Robin Peters

btw, you can purchase them with no charges in a comdirect self select ISA, but it's 12.50 to sell them

Reply to
Robin Peters

What's you definition of substantially.

Why do you assume we're not ?

Just because someone's amassed a substantial property portfolio doesn't mean to say their % gain in net wealth is any better than anyone else participating in this property boom.

Daytona

Reply to
Daytona

and here's the figures from 1899 from the Barclays Capital calculator

Daytona

Reply to
Daytona

Yes

Correct. You don't even need to put it on a tax return.

Yes.

Might not be invisible. The statement may show an interest payment then a few weeks afterwards, the tax reclaim. I don't know exactly as I've never invested in interest paying funds.

Don't put tax considerations before the type of investment. My dream fund over this period would be a consistently good performing high income fund, although in reality I'm DIYing by buying high income shares myself

If you want to know what strategies work best over history read Tweedy Browne - "What Has Worked In Investing" and "10 Ways To Beat An Index"

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Good question ! Can't remember, call up an ISA manager if no ones else answers !

Daytona

Reply to
Daytona

"Andy Pandy" wrote

Think of this another way:

If you used a 100% mortgage to buy a house, and constantly re-mortgaged back to 100%, then the re-mortgages would almost exactly "pay for" the interest on the mortgage. Eg if both house price inflation & mortgage rates are 5%, then from a house priced at 100K in one year it would increase to 105K and you could re-mortgage to get the 5K needed to pay the mortgage interest...

So, apart from the other costs, you'd be living in the house "for free" !!

[Of course, you'd probably prefer to pay-down the mortgage loan instead of increasing it all the time. But this is simply equivalent to saving money in a savings a/c which pays interest at the same rate as the mortgage interest rate (ie quite good for a savings a/c!) - and what's better is, it's even tax-free!]

"Andy Pandy" wrote

about 2-3% ...

This, then, is the only cost for living in the house. Compares nicely to the level of rent you'd be paying on a house half the size!!

Reply to
Tim

Absolutely - which is why I bought my house and am not renting.

But, and this is thing British house buyers need to get through their thick heads - buying a house more expensive than you need does NOT make you money, it loses you money, based on historical averages (obviously there are short term periods when this is not true).

Of course you may consider the advantages of living in the more expensive house are worth the money you are losing - but that's a different issue - you are

*paying* for better accomodation. It is not an investment which will make you money.
Reply to
Andy Pandy

No, it's because the British prefer to invest their money in property rather than in British industry.

Reply to
Andy Pandy

What about when the housing market crashed in 1974 and it took 13 years to get back to the previous level?

Reply to
Robin Peters

The two are not mutually exclusive. In fact, largely, they're the same thing. If I invest loads of cash by buying a property from you, where do you put the cash? In the bank. What does your bank do with it? It lends it to industry.

This is probably cheaper for industry than if I had invested my money directly in industry, since I'd have expected a larger return than the interest they're now paying your bank instead.

Reply to
Ronald Raygun

No, quite the opposite. Many decent high income funds have a lower volatility than the index AND a high income fund receives a higher than average dividend as well, whereas an index tracker has only to track an index without any benefit of dividends received.

Reply to
john boyle

Or lends it to someone else to buy a house. How much cash in savings accounts do you think comes from property sales compared to loans (mortgages) to people to buy property?

But if you buy equities you are buying into the business and only get rewarded if the business does well. If the business does badly you get nothing, or very little. A loan from the bank, OTOH, must be paid regardless of how well the business is doing, and so if the business is going through a bad patch paying interest on the loan could tip it over the edge.

Reply to
Andy Pandy

"Robin Peters" wrote

That's considering *real* values, isn't it? How long did it really take, for the *actual* (nominal) value to get back to the previous level??

Reply to
Tim

Good question. I don't believe they're too far apart. Some companies give funds a risk grading. . Risk is measured by volatility. This is why people say don't invest in the stockmarket unless you can wait out any short term decline. 5 years is about the minimum acceptable period. derived from the Barclays Capital long term study

I've lost track of current charges so it may well be the case the UT/OEIC index trackers are more competitive now.

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hth

Daytona

Reply to
Daytona

As stark as that !? - I hadn't realised. I'll have to look at the stats.

Daytona

Reply to
Daytona

Here are some :-

(all figs are 3 years)

Virgin UK Index Tracker : Std Dev = 4.4 Perf +6.5%

L&G UK Index Inc : SD 4.3 P +5.5%%

IMA UK Equities Sector Av : SD =4.4 P +9.7%

Jupiter Income SD= 3.8 P = +20.8%

Invesco Perp Income SD 4.3 P = +24.1%

Rathbone Income SD 3.7 P= +25.7%

IMA UK Equity Income Sector Average SD = 4.1 P +15.9%

I have in paper form a scattergraph from S&P which plots 3 yr annualised returned rerun against 3 yrs annualised volatility. It shows :

Sector :

UK Equity & Bond Income return = 16% Volatility 2.75

Balanced Managed r = 9% v = 3.3

Active managed r = 9% v = 4.2

Reply to
john boyle

That is misleading. Between 1970 and 1978 house prices rose by almost

3 times. There was an artificial peak in the early 70s, but that was passed in the late 70s.

You are probably looking at data "in real terms", but mortgages don't increase in real terms, Negative equity and its associated problems are related to actual prices.

Reply to
Terry Harper

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