London | How to invest & save money

For those of you working in London, how do you invest you money? The fact that we cannot buy stocks (due to insider information etc) makes things complicated. I have heard of premium bonds, ISA etc. but don't really know what to do

Comments (37)

 
Nov 21, 2020 - 5:30pm

So an ISA is an investment account where you can invest up to 20k per year. These investments can really take any form - ie sitting in cash compounding at 1% p.a. or investing it in equities/fixed income ( can be single names or indexes, ETFs, Funds). 

The great thing about the ISA is that all of the returns will be tax free - so say in year one you invest 20k in there and make a 10% return. at the end of year one you have 22k sitting there being ready to be invested on a tax free basis (ie compounding) and you can add again another 20k the following year. So effectively you can invest 20k per year that will compound and will be tax free.

 
Nov 23, 2020 - 7:23am

I would take a look at Slough. Could be a good buy even if you work in Canary but only if you know that even after the pandemic your bank will allow you to work at east one day from home (say Friday).

There will be a cross rail station, which means (at least this is what i saw published) it will take you 46 minutes to get to Canary Wharf. I dont think prices have incorporated the cross rail effect fully just yet. Also the borough council is about to spend £3bn on housing etc (they call it a Slough regeneration project).

A ton of green space, good schools nearby including Eton.

You can buy a two bed flat in a new building for ~£360k.

 
Nov 22, 2020 - 11:29am

Really not worth it in my view. You can really target some stocks through sector/themes ETFs. Know some people that were locked with a stock as they covered the name as a junior and were on calls with CEOs even though there was no real insider information the bank didn't want to take such a risk. Also as you may know academics have basically proven that the average investor underperforms its benchmark. So don't waste time looking at stocks and just say I like automation and buy the automation ETF rather than looking into which firm will be the best one etc you won't have time as an analyst.

 
Nov 22, 2020 - 2:23pm

Depends how much you have to invest. If you have £300k+, there is a ton of opportunities now to buy property at up to 20% discount. Target studios and one bedroom flats because they are most liquid + they can still generate a nice yield (~4%).

 

Otherwise I would invest in ETFs. Shouldn't hurt you career (depends how strict your compliance team) because should you even receive some non-public info on one of the constituent stocks, you aren't the one actively managing your exposure to that company. Also you won't beat the market if you invest in individual stocks unless you are very lucky, have some insider info or work in a value HF (even then not guaranteed).

 
  • Analyst 2 in IB - Ind
Nov 22, 2020 - 4:40pm

Don't think you will need that much equity to buy a flat though right? Isn't ~10% enough these days? 

 

In that case you could get an ok flat with a few ten thousands... Curious to hear some thoughts on this vs stocks.

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