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Diary of a dumb investor: getting started

I have received a £10,000 windfall from my uncle, on the condition that I invest it wisely. After I take the plunge, I will update readers weekly on my victories and failures.

Diary of a dumb investor: getting started

The unthinkable happened to me this week.

There I was, ambling along in my humdrum life, when my mum called me up to relay some potentially life-changing information: my obscenely rich great uncle had decided to grant me a gift of £10,000.

If he doesn’t start handing out cash left, right and centre, much of it will disappear into the state’s coffers when he dies. He’s actually in pretty good shape, but is still desperate to keep George Osborne’s hands off his hard-earned wealth.

There is, of course, a condition to the gift: that I invest it.

‘This is not intended to finance more nights out on the town, or some trip around the Andes,’ he told me on the phone, ‘I want you to learn about the markets and how to make money grow.’

Oh, the frustration. But to be honest, as I’m nearing the end of my twenties and don’t yet have a clue about investment, it might not be such a bad idea. He also indicated that if I managed the money well, he’d give me another £10,000 a year from now.

I accepted the money, and was given a couple of weeks to figure out exactly what to do with it.

My mum suggested that I contact Citywire. I did so, and they referred me to some useful articles – and asked me to write a weekly piece for them about my choices. So if I do lose it all in some kind of Madoff-style scam... at least my humiliation will be public.

So where to start? Well, I'm financially literate enough to know that inflation is a problem. It means your money (and that includes savings) doesn't stretch as far. So at least my great uncle's wishes prevent me from apathetically leaving all £10K in some bank account where I get a piddly return while inflation rises. This much I can learn from the newspapers.

But if it gets really bad, I understand, the Bank of England may raise interest rates. This risks choking off our sputtering economic recovery. However, as I'm quickly learning as I delve into the world of finance, no one is quite agreed on any of this.

Also, I understand from chatting with a few clued-up friends that gold might be a good thing to get into because of continuing economic uncertainty and rising inflation. Apparently people like the precious metal because of its inherent value. And because it’s shiny.

Then again, I did a bit of research and read this report in the Financial Times – which argues that the precious metal will not rise in value forever, calling this a ‘bubble’ that will burst when the global economy snaps back from chaos to prosperity.

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81 comments so far. Why not have your say?

Dirk D

Jan 17, 2011 at 12:59

Find a good IFA and take some advice.....

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Jan 17, 2011 at 13:10

"’s a minefield, through which I plan to march..."

That's the spirit! With spare cash drying up in this recession IFAs will be only too happy to take a significant slice of your wedge for advice you can get right here at Citywire for free. Your uncle will be delighted at that smart move.

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Keith Dillingham

Jan 17, 2011 at 13:12

I feel I've just wasted a couple of minutes of my life reading this article.

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Jan 17, 2011 at 13:14

I presume this 'dumb investor' is actually ficticious?

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busy bee

Jan 17, 2011 at 13:16

Us and IFA and its a sure way to loose money.

1/2 investment trusts - choose the top ones from Citywire or trustnet , and other half choose shares, not very difficult to read the financial papers and get a cheap online broker - use your ISA allowance if you hav'nt already.

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busy bee

Jan 17, 2011 at 13:17

sorry USE !

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Charlie Marshall

Jan 17, 2011 at 13:19

Read Learn then Read some more and listen and learn then do something, get invested where you feel comfortable and keep reading listening and learning and don't be afraid to admit mistakes. I look forward to your weekly updates.

Good Luck

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Jan 17, 2011 at 13:20

Will be good to see which way you jump! Up and down all over the shop no matter which way you seem to turn.....

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Charlie Marshall

Jan 17, 2011 at 13:20

Forgot to say don't waste money on an IFA

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Charlie Marshall

Jan 17, 2011 at 13:20

Forgot to say don't waste money on an IFA

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Malcolm Miller

Jan 17, 2011 at 13:21

Has Citywire got nothing better to do than serve us up with this fictitious clap-trap???

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Bryan Lowe

Jan 17, 2011 at 13:24

Maklak's comment 13.14

"I presume this 'dumb investor' is actually ficticious?"

Anyway the article could be interesting. Better still if it is genuine

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Jan 17, 2011 at 13:33

Firstly, read the Naked Trader by Robbie Burns. then when you have done that set up a share trading account in joint names ( assuming that you have a spouse ) this will double your CGT allowance, or, set up a share dealing ISA if you don't mind being restricted to LSE:FULL shares or multi listed ones ( also listed on ASX for instance ) Set up a share watch site and follow your chosen shares for a few weeks and buy when you are confident. Check out LSE and III bulletin boards, ignore the hype and bickering, pick out the knowledgable posters and research the shares yourself on the company websites. GL.

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Alan Carmody

Jan 17, 2011 at 13:37

Dear Dumb, I also have £10,000 I'd like you to invest for me, were should I send the cheque? I have a good feeling about this!

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Alan Cork

Jan 17, 2011 at 13:38

The holiday property market in Spain has collapsed and many people are desperate to sell up just to clear their debts. By shopping around and haggling you could buy a flat or house on the Spanish coast today for £10,000 and then have a secure rental income from holidaymakers for life.

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Jan 17, 2011 at 13:39

We all have to start somewhere - I'm looking forward to reading the updates... GOOD LUCK !!

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Dave R

Jan 17, 2011 at 14:05

Invest your £10,000 in five Investment Trust Companies

get the data from the Association of Investment Trust Companies (


British Empire & General

RIT Capital Partners

Personal Assets

Murray International

Hansa Trust

Finsbury Growth & Income

Scottish Oriential Smaller Companies

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Ian Phillips

Jan 17, 2011 at 14:05

Alan Cork.....

Have you ever been to Spain?

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Jan 17, 2011 at 14:09

Don't bother with an IFA, get yourself on a direct investment platform that allows you to trade in all manner of products (equities, Investment Trusts, OEIC's, Term Deposits, etc) and spread your investments across a number of different product types with different risk ratings etc. This is what I've done with my pension and by monitoring the products I hold and taking a few risks I've managed to acheive a growth of over 71%, of course I've had a few turkeys along the way but I've also found some real stars (one of my investments is showing a 400% return) and all of this without consulting any of the "experts".

Also make sure you use your full ISA allowance as this will allow you to avoid any CGT in future years.

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alan franklin

Jan 17, 2011 at 14:22

Agree with some other posters- avoid professional so-called advisors at all costs- because the costs are too high.

I would put a percentage in gold. It will steadily rise as paper money fails or is inflated. Ignore talk of a bubble- this doesn't equate with the facts and gold's historic value. is a cheap way to invest.

I would look at defensive, international companies with a wide spread of assets- the pharma companies look good to me. Buy on dips. Select the companies you like and buy on bad news days, when everything goes down.

I like Vodafone- good income stream and none too demanding p/e. Avoid banks- they have too many hidden bad debts.

Look at Canada, one of the world's few countries with a sound fiscal policy. The Loonie- Canadian Dollar-will rise on raw material assets.

Peyto Exploration & Development Corp PEYUF is a Canadian company I like, inthe gas exploration and production business. Has a good dividend and great management team. gas prices have lagged oil- they may well rise.

Hope these few thoughtsd help.

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Jan 17, 2011 at 14:27

The simple answer is get a copy of the smarter investor by Tim Hale and follow the advice.

Basically - diversify using a lowest cost strategy

1) Choose your risk level - proportion of equity/low risk assets ie 100/0 , 70/30, 60/40 etc.

2) Low risk is then mapped to NSandI index linked certs (unfortunately none currently available) or index linked gilts

3) Pick your equity markets UK only or whole world

4) Pick your equity risk level - developed, emerging, smaller co, commodity, property etc. He provides a few example splits

5) Buy an appropriate passive index or ETF fund in all cases

You might not get the services of the very few really good fund managers but neither will you get the majority that are costly rubbish. By only paying 0.4% AMC & no initial commission you're already 1.25% ahead of most funds and a significant number of investors

You can now go off and investigate / read up knowing that at the very least you are investing in capitalism which hopefully should preserve at the very least you spending power until you can identify something better (if you can).

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Jan 17, 2011 at 14:31

I was in a similar position to Dumb Inv a few years ago, having been gifted some money. I would not ask an IFA what to do with it - where's the fun in that?! I'm not having some BS artist tell me what to do with my cash... Nor would I put any faith in what this site has to offer - I read so many contradictory pieces of advice on this site it makes me laugh, contradictory articles on the same page no less - at least try to disguise them from each other!! I could not agree more with the comments above regarding read, read and read some more, then buy some shares through a trading account - TDW offer no mgmt fees providing your portfolio is over 5k - which, thanks to the fantastic insight I have gained into share investing mine now is - and growing... My advice would be to find a cheap stock / penny shares offering that you think will survive... Then forget about it for a couple of years - if it works out well done - if not you've probably been too greedy...

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Jan 17, 2011 at 14:40

Find 10 goods Units Trust/ oeic, some have fees, see the management fees too and invest in the section you like most.

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Jan 17, 2011 at 14:50

Dumb Investor, tell your friend that Tesco would have been a really dumb investment last year - you would have lost 4.3%. And the busiest Tesco I have ever seen was in Budapest . . . . .

For what it's worth :

Beginners should stick to investment trusts. Each trust invests in 40-100 companies, so you will be well-diversified.

Find your way round the information freely available on Trustnet's website.

You can set up a dummy portfolio on the Moneyextra website.

Don't believe you can "fit and forget" - you have to monitor your investments.

With any luck you should be able to make an annual return of 15-20%.

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Jan 17, 2011 at 15:12

With your £10000 I would add another £200 as a Maxi ISA I would put 20% in the following. If you want to get gains you will have to speculate. You will not make any money on cash ISA's, but the banks and building societies will, that why they advertising them!!

Try the following

Invesco Perputual High Income, fairly good growth but good income, good fund manager.

Neptune Russia & Greater Russia very good track record, very volatile

Neptune Asian Income, good growth and income.

Fidelity Emerging Europe & Middle East & Africa, one to watch

Investec UK Smaller Companies. looking at the charts today Asians are down but this fund is up.

Get a provider that gives gives good switching facilities (No charges if possible)

When you get your statement, go to a site called, register for free on the site enter your portfolio with units, dates and buying costs, get a weekly email alert, which will show you there progress. Look at the profile tab this will show chart movements, my thoughts are if they all go up & down alls going well, if is declining from the pattern consider switching and stock pick another fund. Also look at the summery

I have used this method for several years for ISA's and Pension Funds, last years tax year I gained on average 60% gain on my portfolio, this year to date from April I think I done around 15%.

I do have a good IFA and we work together, but these are my opinions

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Jan 17, 2011 at 15:16

If you report weekly you are not an investor you are a speculator. The daily price is irrelevant to the longterm investor. What matters is how well your underlying investments are doing.

The best advice in all this lot is to buy a range of good investment trusts.

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Paul Murphy

Jan 17, 2011 at 15:26

As its a windfall you weren't expecting or budgeting for go nuts. All into an aim share 100 years away from any revenue stream and watch it double. Beginners luck statistically beats the markets. Remember you don't want to get bogged down with silly little things like financial statements and macro economic outlook. Instead pick a company with a great sounding name like Super-turbo-resources or some such.

racetoamillion blog seems less fictitious with the same idea.

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Jan 17, 2011 at 15:41

RL - That's all very well, but if you buy (say) BP shares and just ignore what's happening in the Gulf of Mexico, you can find your shares have dropped 50% in value in a week.

If Dumb Investor updates his dummy portfolio weekly and sells if an investment trust drops 20% from its peak (not its purchase price), I don't see how that counts as speculation.

I check (briefly) daily and I don't regard myself as a speculator. I do research the companies I invest in, though, and I pay a lot of attention to track record. I am training myself not to pay too much attention to logic - it doesn't work in investing in the markets . . . . . . .

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Jan 17, 2011 at 15:49

Cyderman, I'm sure you do have a good IFA - but try going on the Trustnet website and seeing how the equivalent investment trusts would have performed - some managed by the same team as the unit trusts. Then consider that the unit trusts make annual charges, and some of them (e.g. Neptune Russia) can only be traded at one particular time in a week - which, if they're volatile, may be very much the wrong time.

Far be it from me to suggest that IFAs recommend unit trusts because they pay commission, and the equivalent investment trusts don't . . . . . . .

I would suggest that these days you can get the same information from the web as the average IFA can - and all of it is free.

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derek farman

Jan 17, 2011 at 16:03

I agree with Busy Bee's advice , but also follow City Wire's news and read the FT from time to time . Can't wait to see if you outperform the investment trust gurus .

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Jan 17, 2011 at 16:03

definitely good advice is to buy on the dips, only problem is that when this occurs there is usually widespread market fear / panic and it can be quite hard to hold your nerve and realise it's not the beginning of Armageddon II and just buy!!!

I was in a similar situation two years ago completely green totally wary of shares and instead brought several cases of Lafite 2008 and some gold...

in past 12 months I've brought investment trusts, emerging markets, high yielders, pennys, oil stocks, pharmas so am slightly less green.

Really you've got to look at your fund level (10k). If you buy into an investment trust spread you'll only make a modest return. Emerging markets look a bit risky with downside potential glowing at the moment.

Gold would be worth a £2000 purchased in Bullion Vault if it dips further. With another 8k left I'd also be tempted look at shares in companies that cost 50p ish per share that are undervalued with potential, if you spread it around with halfa dozen of these such companies you may well make a 20 - 30% return this year.

If you read enough you'll find plenty that that tempt you fitting the bill! There are plenty of low fee online share-dealing services.

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Alan Cork

Jan 17, 2011 at 16:30

Yes I have been to Spain Ian Phillips, went on first package tours in the 1960s before the Brits raped it by putting up Duke of Wellington pubs and fish and chip shops. But if what you want is hot sun, cheap booze and sandy beaches Spain still has them. The place I would buy holiday property in today is the relatively unknown Albania. In the heart of the Mediterranean, on the Adriatic and Ionian Seas, Albania is still unspoiled by globalisation and property is cheap.

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Jerry Latham

Jan 17, 2011 at 16:47

Basic rules:-

1. Don't touch an IFA! They will take an unrealistic slice of your investments.

2. Use your full ISA allowance.

3. Take a long view - even to the extent of using a SIPP.

4. If you are hesitant about shares go for unit trusts - but do your research first.

5. Use an online broker - I recommend Hargreaves Lansdown for unit trusts as they discount most funds by up to 5%, + add loyalty bonuses. Within their 'wealth 150' funds you will find a decent range of choices.

6. Spread your investments.

Good luck!

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Jan 17, 2011 at 16:56

Hello you lucky person! After many ups and downs in which I bought shares here and there, and whichever unit trust was the 'hot tip' for the season, I have finally seen the wisdom of determining - in my case together with a good IFA - an appropriate 'risk profile' and dividing the whole sum into a % split over a spread of sectors to reflect that profile, choosing eg between UK FTSE 100/ FSE 250/ Europe/USA/Global/ and the many other fund sectors available including bond funds, trackers, investment trusts, potential higher-risk /higher reward areas like China, Russia, Latin America, Africa, India..... specialist funds like Metals, Healthcare, Ecology or Infrastructure....there are squillions.....I tend to disagree with the people who are telling you not to get an IFA - I think that trustworthy honest advice about which way to go is very useful, preferably on a fee basis rather than on a commission basis. So far only one person has mentioned the wisdom of investing the money through a tax-efficient ISA 'wrapper' to avoid Capital Gains Tax in the future. For what it's worth, personally I have given up buying individual shares as I prefer the spread of risk one gets with a good unit trust fund manager. Maybe you will find a good IFA by picking the cleverest well-heeled mature person your family knows and asking them who they use. I would not like to see you just plunge into some of the frankly risky funds I notice people are recommending without first deciding how much risk you want to take, No rush! You could start by going on line to Hargreaves Lansdown and contacting them for a copy of their magazine which gives you their 'Wealth 100' - their top pick of, I don't work for them! I have just found them very helpful. Read the Sunday Papers' money sections and the FT from time to time.....perhaps start to run a virtual 'model portfolio' 'for a few weeks on one of the financial websites and see how it fares before investing in the real world. Notice the 'volatility' of the funds you are thinking of inveting in and look them up on the Hargreaves Lansdown or Fidelity money supermarket websites where you can see factsheets and performance information for every fund. This is a busy time of year - I find the prices of popular funds go up a bit before the end of the tax year in early April so you may not want to take any steps around that time. Many investments stipulate a minimum amount (often £1000) so you may be a bit limited on how many sectors you can go into. Good luck!

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Jan 17, 2011 at 17:21

If you are genuine and I hope you are, I am looking forward very much to following your column. You can make money and suggest you handle it yourself. You are able to make decisions as well as anyone else and the experts are often too cautious and always have something to gain from recommending anything. Do what the others have said, read, the FT. the business section of the newspapers, Investors Chronicle and then make your own decisions and have fun along the way.

Good Luck

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Jan 17, 2011 at 17:27

For what it's worth, if I had another £10k I would buy £1ks worth each of the following:- AVCT, HER, EDL, PMG, AYM, ATC. £2k CAR and £2k RRL.

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gggggg hjhjkl;'

Jan 17, 2011 at 17:41


PL is right Tim Hale is well worth a read. He sets out events over the last 100 years and makes a case for index tracking very well. With this basis you should get a very good start.

Do not read about the great investors, IMHO this will only lead to confusion, besides which most of them often vere erll off their own beaten track.

I would expect you to make money the first year, but after that beware!!! ? beginners luck.

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gggggg hjhjkl;'

Jan 17, 2011 at 17:45

Alan Cork - "Albania is still unspoiled by globalisation and property is cheap"

AND full of gangsters!!!!

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Graham Barlow

Jan 17, 2011 at 17:46

I cannot believe you would even consider a IFA after the foregoing advice. The maximum income you could generate is about £600 p.a. The first thing to do is open a self invested ISA, then all incme and profits are Tax free. Before investing get to know the mood of the market ,watch trends to see if it is currently overheating. There may be a correction,which is a buying opportunity. Put half in Blue chips ,and then start searching broker reports looking for those little gems. When you spot one do your research and then make your decision. Dont get greedy keep well spreadby having 5 investments in mining gold ,Oil. Keep your I open for over discounted stocks. There are one or two of these very good companies where the pessimists have driven down the price too far. The other factor as Napoleon said "Are you lucky?" Have great fun.

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Jan 17, 2011 at 17:55

You are all dead right about "beginners luck". My investment life started in 1968 when I received a legacy of £ 800 which was then a lot of money considering that my gross annual salary was £ 380. I put the whole lot into Martins Bank as the large number of banks were tending to consolidate. Well within 5 months I tripled my money as Barclays Bank swallowed up Martins.

I then reinvested the lot directly into the Stock Market and thanks to Harold Wilson devaluing the pound and then the Barber boom of the early 70's under Ted Heather I turned £ 800 into £ 30,000 by 1973. Amazing really when you could buy a new 4 bedroom detached house in Southport for £ 5,000.

That's is what got me started...................

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Jan 17, 2011 at 18:21

Put it all on red!!

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Jan 17, 2011 at 18:22

DI, I reckon chuckleton is not far off the mark.

10 k is not a lot, and likely to be for about 2 investments, plus a bit of mad money. DO NOT go in for a lot of small investments, risk spread but at what cost?

Like you, I got a windfall (somewhat larger than yours) and started 18 years ago, and steadily ploughed back the divis. Watched the market, and read the tips, and went with my gut where a tip made sense. Yes there were turkeys/dogs, but overall quite successful.

For mad money, although I reckon safe, but longer term, look at International Ferro, and Lonrho.

I have not 'traded', and when I did this with a couple of shares recently, I lost both the income and increased value (rise since) and I still think that the market is too high at the moment with all the sovereign debt around.

As for IFA, I had one, actually 2, and both turned out to be in it for themselves, trying to churn a policy or two and latterly trying to get me to invest on the basis that there would be a tail fee, i.e. annual return to him based on value (forr a SIPP).

By the time, (hopefully) the next 10 k falls in, you will be wiser, and do make a note of companies tipped for future reference and following. In manay instances they are 'now' tips. I see Vodafone being tipped, and I bought in at £1.95 (some years ago) on advice, and although there have been dividends, I am still losing, but the loss getting smaller.

PS get certificates, not crest, 6 monthly charge on the account for each share held.

Do not feel that you have to spend, in this market, on a dip, cash is king, and NEVER borrow for a 'red hot' tip.

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raymond mills

Jan 17, 2011 at 18:53

Sounds all a bit suspicious more like a background for a good story!!

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Derek Potter

Jan 17, 2011 at 18:57

Forget gold, silver is like gold with built-in x1.75 leverage. Also available aat BullionVault. It is, of course, plummeting right now, you don't need to be a chartist to see that it got a bit out of hand last year and is now undergoing a correction. But the underlying fundamentals are still the same, more so in some ways because world+dog has decided the US economy is on the mend ever since Bernanke wound up the printing presses. It won't be long before the reality sinks in and everyone flocks to gold again, probably just in time for seasonal buying to kick in as well. Could be a very big rise retracing the dip on top of everything else. But that's just my opinion and what would I know?

Second thoughts, forget all that. This is potentially the first instalment of £10k a year plus all your profits. That's a built-in 100% simple interest. So study your uncle. Find out exactly what makes him tick. Does he trust the world money system? Does he go by what The Money Program says or does he go around muttering things like "End of civilization... bloomin' bank bailouts... ruddy Chinese about to take over the world (and who can blame them?... That damn fool running the US Fed... blasted benefit system... Ireland bankrupt... Greece down the pan"? Forget big profits, play your uncle, not the market. He won't go by the numbers you come up with, he'll go by your attitude. Get under his skin and the old git may double your allowance. 200% just like that.

Of course, as you uncle is fictitious you may have to adapt the strategy to the real situation a little.

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Jan 17, 2011 at 18:59

There are other investments to consider, may have better potential than the ord shares ... look at pref shares and bonds as well. Some seem very undervalued right now.

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stiff watt

Jan 17, 2011 at 19:05

I'll look after it for you mate!

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ray rumjen

Jan 17, 2011 at 19:30

Buy a property in America. You could buy a detached house from $25000. with a guaranteed yield of around 15% net return on your investmentl. This will also be a good investment for the future where the property could easily double in price.

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Jan 17, 2011 at 19:38

Many thanks to all contributers. I would like to get into investing but I am scared of losing, having lost a bit previously. The comments above have only made the whole thing sound more complicated than I thought. I need to start reading up about how it all works I guess. I fear giving my money to smart alecs who purport to know what they are doing, if it was not for this situation a lot more people, like me, would invest in stocks, shares etc. and we would all be better off.

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Jan 17, 2011 at 19:43

Nice try Citywire but how about time horizon (assume long-term) tax position ( I assume this guy works)

Definitely avoid IFA's - they are not good as investment advisors; too formulaic.

Use an execution only ISA account and invest in income investment trusts on a reasonable discount. I like Dave R's list but do your own research.

Avoid individual equities even quality companies can blow up in your face eg. BP. Collectives spread the risk which you cannot do with £10,000 but avoid OEIC's/unit trusts they are a rip off on fees

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Suze Jamieson

Jan 17, 2011 at 20:19

Sorry, but this just sounds so fake and corny - I can't believe anyone is responding to it with serious advice! Haven't you got anything better to do??

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Jan 17, 2011 at 20:29

Ah Suzie. But you are reading this and as seen there were many erstwhile beginners responding, and now know what they want and invested, with the odd loss, and are still prepared to invest.

Now why are you reading this if it is so fake?

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Suze Jamieson

Jan 17, 2011 at 21:05

I read it because I'm interested in serious discussions about investment, but decided within seconds that it was a set-up. I responded to alert others to that fact. Just because a number of beginners took it seriously (and I don't think very many did, actually), doesn't make this a genuine plea for help. Quite the contrary - probably only beginners (or those with big egos and not a lot to do with their time) would take it seriously. And my name is Suze, not Suzie.

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Ian Phillips

Jan 17, 2011 at 21:18

Alan Cork....

If Albania is so good why did you advise our mystery investor to buy in Spain?

You might find that Spain has changed a little since you went in the '60s!

Oh, where can you buy a coastal property for £10k in Spain today?

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Derek Potter

Jan 17, 2011 at 21:48

Hey, drop it, you two! This isn't a private flame pit.

Let's just pretend the story is true and go with it even though we know it's a fanciful wrapper for a mundane enquiry. The beneficient uncle could be the investor himself with a game plan of investing £10,000 a year - but only if he gets a reasonable return without excess risk in his first year. Otherwise he'll just save it in a miserable savings account.

Personally, I prefer the rich uncle story.

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Jan 17, 2011 at 22:54

Er - with all the publicity about the King James Bible, has nobody noticed that the story bears a remarkable resemblance to the parable of the talents in Matthew ch.25?

What does it matter if it's a story, if it makes a good point?

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Alan Cork

Jan 17, 2011 at 23:07

Er -to quote my dear friend Micheal Winner, "Don't get upset, it is only an advert dear".

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Alan Cork

Jan 17, 2011 at 23:16

Sorry there was an internet glich that caused my comment to repeat itself over and over. Apologies. What I would advise any young person today is to put their money into a company pension fund - they give you money for goodness sake and you even get tax relief - not as much as you used to. But unles your boss is the late Robert Maxwell - mine was - a ompany pension scheme is the best yet and if you are a young person today you will live to be 150plus whereas my generation had the decency to die at70.

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Alan Cork

Jan 18, 2011 at 02:30

My very last word on the subject. A very safe investment for £10,000 with a guaranteed return is The Post Office Online Saver which offers 2.90% AER and unlimited penalty-free withdrawals. The Post Office is not going to go bust.

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stiff watt

Jan 18, 2011 at 07:05

anyone know how to stop the emails on this subject without posting a comment?

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David Walmsley

Jan 18, 2011 at 07:27

I trust your Uncle will live for seven years ??

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Derek Potter

Jan 18, 2011 at 07:33

"My account" at top of page

"Email settings"


Also untick the box below.

You may not need to do both but I haven't tried just one.

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trevor townsend

Jan 18, 2011 at 08:06

Sheffield Insulation ought to do well in the next few years; all commercial property owners are going to have to retrofit insulation to their buildings or be taxed more heavily. Sheffield Insulation is the leading distributor of these materials and have worthwhile sales in Northern Europe as well as at home. The share price collapsed when the economy, and particularly housing starts went off a cliff. Pre the Lehman escapade they were well over £10 and went all the way down to below a quid, since which time the share price has consolidated to around 150p. There is a big institutional following of the shares; and in my view a likelihood that this is a recovery situation par excellence.

The company is not going to disappear, last year they turned over more than £2,000,000,000.

The epic code is SHI.L

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Jan 18, 2011 at 08:21

Come on boys and girls.......let's all play nicely. That nasty Suze (NOT SUZIE) is nice really but we all have bad days.

Remember that the fictitious poster is required to act sensibly so buying gold, using an IFA and taking advice from Bulletin Boards are musts to avoid. My advice which you must ignore is to invest the money in an ISA probably in a Multi Asset Fund something along the lines of one of the Jupiter Merlin Fund perhaps. Ignore the high charges as performance is the key.

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Rich Harris (Citywire)

Jan 18, 2011 at 08:29

Derek Potter - thanks for helping stiff watt with his question.

stiff watt - as well as going via your email settings as and unsubscribing as Derek describes, there's a link in every comment email that says 'Don't send alerts for this discussion' which will remove you from the list. I realise it can get a bit crazy on heavily commented articles like this one!

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Jan 18, 2011 at 08:40

Sheffield Instulation is alos known as SIG. Price £1.51 at 0824

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joe stalin

Jan 18, 2011 at 09:58

whether the story is for real or not matters little imo. It has provided a good discussion thread from which we might all gain some insight as the info is shared. Lots of good advice on offer agree wrt IFA they are in it for themselves and of course the ISA - the only way to build up a decent pot -start with undervalued unpopular growth stocks such as TW for example and the gradually switch some of the pot into some quality high yielders to provide income or further investment funds. Should be interesting to see how it evolves.

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Jan 18, 2011 at 10:05

Alan Cork - Dumb Investor's obscenely rich great-uncle, fictitious or not, is not going to be very impressed with an investment which returns, after 20% tax deduction, 2.32% per year. That doesn't even beat inflation.

Dumb Investor - ignore the recommendation about SIG. People have been saying "it ought to do well in the next few years" for the last few years, and it continues to underperform. If company performance was as logical as that, we'd all be millionaires. You need to diversify a little - £1,000 in each of ten well-chosen investment trusts will do as a start.

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Jan 18, 2011 at 19:31

Alan, pension, and then there will be Gordon Brown Mk II,(red ed perhaps, he was at his knee for long enough) making sure that his gold plated pension has a another layer of gilt, from the amount he rips out of private pension funds.

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Roy C

Jan 18, 2011 at 19:33

Well I've read some of the comments. On balance all is ok.

I too have balanced investments, I use Jarvis X-0, Hargreaves, Fidelity funds network, I invested in Company AVC I even used an IFA. May I say the IFA recommendation, makes me in excess of 10% a month since 2003 even through the slump in 2008. They have access to Funds that the private punter doesn't in some cases. They also give sound advice IHT,TAX and other eventualities in life. So I don't knock all things, everyone has their own experience.

Jarvis is a good cheap share dealing and ISA service, but Hargreaves retains a better info service, but spread your investment choices amongst a few managers, keep below £50,000 for safety sake in fund houses, and a mix of Funds,shares Unit trusts, investment trusts and ETFs and keep below £3000 unless you need Corporate Bonds and an edge in Index Linked Gilts via ETF.


I'm a wise old grey haired git, and been around a few blocks

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Roy C

Jan 18, 2011 at 19:36

Sorry I should have said 10% per annum before you get excited. Still beats Inflation RPI which is where you should aim.

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Chris Marsden

Jan 18, 2011 at 23:11

Roy, the £50k limit is now £85k from 1/1/11, and that is ONLY at risk if it is held in cash, ie between investing. If invested the Fund Provider (ie HL) or the Fund Manager (is Aberdeen) are nominees, so if they went bust your Funds invested are all protected - apart from the ups and downs.

(I am right aren't I?)

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Roy C

Jan 19, 2011 at 09:51

Hello Chris, yes fair comment, I was just leaving a safety margin, and the reference was really to do with the £10,000 originally thought to be invested. Some type of funds ie off shore and specialised funds are not protected by this umbrella, but by the fund company , setting up a liability clause, when not FSA controlled, This will or should be made clear in the documentation. But yes generally your right.

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Ken Johnston

Jan 19, 2011 at 10:59

What's with all the sarcastic comments about a fictitious uncle. Perhaps Dumb Investor really does have a generous relation. Lucky him, if so.

When my daughter married four years ago, I gave the couple £20K, plus the wedding. I'm sure lots of other parents have done the same.

And I ain't no W. Buffet. Just a working class guy who's been fairly lucky and worked all my life.

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Ryan McC

Jan 19, 2011 at 21:20

This will be interesting. Similarly, i have gradually invested £5,500 (my life savings) in the stock market since March 2010 simply for the thrill. I am 27 and i thought what the hell! So far i have lost about £400 but i expect my investments to come to fruition in the next twelve months. My portfolio is one of diversity i think and partially rubbish! As the months have progressed, so has my knowledge, acquired through much reading. Whatever the outcome of my investment, no point crying about it. I would be more inclined to laugh about it as i have little interest in money and greed. The best things in life are free!!

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Jerry Jones

Jan 22, 2011 at 09:24

I'd recommend a sub to the weekly Moneyweek magazine. I have found it very useful as a beginner to explain investment at my level. I have also done very well indeed out of the Red Hot Penny Shares newsletter over the last 2 years, only using a small proportion of my money to play with his recommendations.

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Adam Nealis

Jan 22, 2011 at 11:53

Don't talk to an IFA. No IFA will give you more than a meeting per year for your 10K pot.

Learn about the exponential function (think compound interest) - try this YouTube series: "The Most IMPORTANT Video You'll Ever See" parts 1 to 8.

Put the 10K into an ISA platform that allows you to buy and sell shares and/ or funds. Leave it in cash for now then read this book "Stan Weinstein - Secrets For Profiting In Bull And Bear Markets". Use it to help you decide your investment temperament. Stage Analysis and Stop Losses are two Very Important Things to know about investing. Hopefully you will realise how much fund managers rip you off if you Play It Their Way.

Set up some "paper trading" accounts at, say, Google, MSN or Yahoo for stocks and shares. Try Digital Life or Morning Star for funds. Construct portfolios of funds and shares "on paper" and see what happens. Try to make sense of it all.

Record and plot graphs of daily fund prices if you are inclined to invest in them so you can apply Stage Analysis to determine getting in and getting out points.

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Peter Lawless

Jan 22, 2011 at 12:38

£10 K on the nose - Amur Mineral Corporation (19p).

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Chris Marsden

Jan 22, 2011 at 18:19

Sounds a good bet. Any tips on how to invest ie where the dealing charges are lowest, ie I am thinking of HL for some Blue chips at £10, (+£12.50qtr when actually trading). Anyone else give better odds, lower spreads, do they vary much with time of day, (Shares like Xcite vary from 2p - 6p spread or more during a day), and what size holding for someone with a modest portfolio, say 10% in penny shares, and should they hold £1k or £5k or £10k in each?

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Jan 23, 2011 at 12:42

Dirk D was absolutely wrong with the first comment when he advised to get an IFA.

Charlie Marshall (17th Jan, 13:19) was absulutely right when he advised to READ & learn.

You are young and like 99% of the UK public, you know nothing about investment. So you've got to learn about it; and the first and most important lesson is to do it yourself and certainly not delegate and pay fees to someone to lose your nestegg for you.

Start by subscribing to two weeklies - The Investors Chronicle and Moneyweek. After c.3months, start a dummy portfolio and monitor and record the preformance. Certainly don't start risking capital until you have an inkling that perhaps you are learning how to put one step in front of the other. Your Uncle will appreciate the dedication and the lack of loss!

Finally, click onto and read comments on the Bulletin Boards. A load of dross; but also a lot of serious comment by people who know this game. Start with the thread under the epic SHA - and move on from there.

Good luck to you...

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Jan 24, 2011 at 11:37

As I said before I use an IFA, he does not charge me. For £10,000 I can see why not to use an IFA. My IFA checks everything financial, to make my liquid assets work efficiently; I don’t have any credit card problems, but my IFA will shop around for the best deals and SAVE you money without charge.

As before if any my funds are not producing a good return I switch them into ones that do, I don’t think this speculating, most of us receive annual statements, and I will moan if funds are doing badly that why I make frequent checks. I also have Moneyweek, it gives clear information. Before I switch I list out funds and start a fantasy portfolio on Trustnet, ( www.trustnet.coms ) I put an imagery fund of a £1000 in and units, for each OIEC, so can glace at the % gain from months to year so if the fund is £1100 it gone up 10%.

The provider I use for my Maxi ISA’s is Sterling Assurance, so far they have not charged me for switching, also another well-known provider is Hargreaves Lansdown, I believe they waiver initial charges.

Another way to learn about funds is to try the Fantasy Funds competitions, at present Barclays Bank & the Daily Telegraph are in progress, I think you have time. I still think unit trust & OIEC’s are the best options, than shares, also pick a good fund manager, the reason being is when they go down you have a bit of time to switch.

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Aug 16, 2011 at 01:45

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