Where to invest??

[ForeverConfused35]

Hi all
Please help a confused person decide where to invest. We have sold our house and looking to rent as there is nothing we like and can afford with current interest rates. Where would you invest the profit from the house sale? Would you buy a property and invest that way or look at savings accounts? If so, which banks? Don't really understand stocks but I'm told bad idea at the moment anyway...

What’s your timescale? The general rule of thumb is that don’t invest if you have less than a 3-5 year horizon; so if you see yourself needing the money to purchase a house then I’d keep out of the stock market.

You’re probably a good bet for a fixed term savings account - if you’re willing to lock the money away for 3+ years you could get close to 5% return.

If you are looking to invest; then I’d be looking at a stocks and shares ISA somewhere like Vanguard; and look at their index funds. Rather than investing in individual stocks (which is very volatile); index funds invest a little bit in a wide range of companies which helps spread the risk.

How much do you have to invest?

Stock market is tricky right now. We pulled a large investment which had been in a year and had been all over the place up, down, up, down it was exhausting. We lost £200 but it had been down £20k and up £13k in a year! We thought we’d make £4k but the markets are really unpredictable now.

Weve bunged it in active savings spread out across a number of institutions up to £85k in each.

Watch out for tax on interest, £1k of interest is tax free then charged at your normal rate. ISAs and govt investments eg. Premium bonds are tax free.

I like premium bonds- your money is safe, it’s instant access if you need it and there’s alway chance of a big win. If you don’t need the cash you can set your winnings to auto reinvest.

I wouldn’t invest in property at the moment, if it’s not your main residence, as prices are predicted to fall in the near future.

A few things will influence the decisions on how to invest…

Timescale - how long do you want to invest for?
Your income - are you a basic or higher rate tax payer? (This affects your personal savings tax allowance),
Your attitude to risk - are you willing to take some risk with the capital for potentially higher returns? Or do you want a safe haven with no risk to the lump sum?