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kim1961
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17-06-2012, 08:12 AM
1

help please!

My daddy has given me £6000 to invest for my daughter who is 14. I'm not sure I fancy stocks and shares as they are a bit volatile....??....so what would YOU all suggest?

many thanks
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17-06-2012, 08:40 AM
2

Re: help please!

Welcome to the forum Kim, always good to see new members.

I'm afraid I'm not au fait with high finance, but if you don't want to take risks with the cash then I would go for a fixed rate account or bond. I know the Halifax is paying around 4% a year over three years at the moment as are a couple of others, a pittance really but as things are now I think it's pretty well as much as you can get...
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17-06-2012, 08:58 AM
3

Re: help please!

Hell Kim and welcome I would put some of the money in a Junior cash ISA, I think you are allowed to invest a maximum of £3,600 per year and I have seen interest of 6%.
The rest in a Children's savings account for now.


If you Google 'Junior cash ISA' and 'Childrens savings' you will be able to compare the different offers availible.
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kim1961
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17-06-2012, 09:00 AM
4

Re: help please!

wow...... thank you both so much. I'll have a look at all of your suggestions.

Keep 'em coming if you dont mind!!

Its great to be here btw!
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17-06-2012, 09:16 AM
5

Re: help please!

The amount that can be invested in a cash ISA is now about £5,630 per annum so most of the money could be invested this way.
The Children's ISAs usually want a monthly amount to be invested and because you don't invest as a lump sum, the interest rates are not as good as the fixed rate ordinary cash ISAs.
We save for our grandchildren and have moved over to the fixed rate ISAs for them.
At the moment Halifax is offering a 4 year fix at £4.15% and a 5 year fix at £4.25%. The 4 year fix would coincide with your daughter reaching 18 (in case she wants access to the money at 18). You could put the rest of the money into a variable rate ISA and then maybe open another fix in a year's time.
Unfortunately, interest rates are not good at the moment, but 4.25% might just about keep up with inflation. Remember though 4 or 5 years is quite a long time and there are penalties if you want to access the money before the term ends.
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17-06-2012, 09:34 AM
6

Re: help please!

Do you think investing long term is a good idea now? Are rates likely to rise ...I suppose its a guessing game isnt it?

Many thanks for your v full response
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17-06-2012, 10:02 AM
7

Re: help please!

Hi Kim, my advice is to go to an "independent" financial advisor who, for a small fee, may be able to increase the £6000 by a reasonable amount over the long term.
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kim1961
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17-06-2012, 10:18 AM
8

Re: help please!

Thanks so much. I did this before with some money my daddy gave me for my daughter and it went wrong cos the economy crashed a bit!!!

I've been put off somewhat!
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17-06-2012, 10:36 AM
9

Re: help please!

Hi again Kim, when I retired my pension package gave me a lump sum and I went to a financial advisor. He put the money into two investments one of which did extremely well and the other did badly. Even financial advisors cannot predict what will happen in the future.
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17-06-2012, 11:36 AM
10

Re: help please!

Originally Posted by kim1961 ->
Do you think investing long term is a good idea now? Are rates likely to rise ...I suppose its a guessing game isnt it?

Many thanks for your v full response
It is often a guessing game I think Kim and I'm certainly no expert.
Interest rates have been low for quite a while now, as have mortgage rates but If/when the bank rate and mortgage rates go up then savers will probably get a bit more, but savers' rates always lag behind borrowers rates. The problem is that because flexible saving rates are so very low at the moment it maybe a while before they get as high as 4% - everything is so uncertain these days. For example if you got 2% on a flexible rate it would have to go up 2%, but in the meantime you have been earning 4% on a fix all the time it is invested. Maybe a 3 year fix would suit better! Rates tend to go up .25% or .5% at a time so that would be quite a few hikes in interest before it reached 4%.
You could go to an IFA, but they are likely to charge a fee for their advice. You have to figure that into your calculations. Limited advice is available for free (you could ask the Halifax or any other institution - but they only recommend their own products so they are not independent but it might be useful to have an interview). Share based investments also carry an annual percentage fee and this percentage amount also needs to be figured in before you can earn anything from your investment). These investments are usually medium to long term (5 years is considered the minimum medium term). There are differing levels of risk associated with the investment funds but some will guarantee at least the return of your money plus maybe a small percentage.
£6,000 is a lot of money, but not a lot in investment terms and you could lose some of the money or just break even. I think the best way for ordinary folks to invest in stocks and shares is not with a lump sum, but by "drip feeding" monthly amounts into your selected fund - this way you spread the risk over the longer term.
As you will probably realise we have pondered over what is the best thing to do with savings and there is no easy answer - and I think it is complicated. I don't think one size fits all and individual circumstances, comfortable levels of risk, charges, etc. etc. have to be taken into account.
I hope this helps and good luck with what you both decide to do. Sorry I'm a bit long winded but there is quite a lot to think about.
 
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