windfall

  User-994545 16:02 17 Oct 2008
Locked

if you got a £5.000 windfall would you invest in shares? as there so cheep

  User-994545 16:03 17 Oct 2008

sorry cheap

  interzone55 16:07 17 Oct 2008

If this is a hypothetical question, I'd say yes, but as long as you can keep the shares for a couple of years at least.

If you're asking for advice, I couldn't possibly comment...

  Quickbeam 16:21 17 Oct 2008

I thought it was going to be another foodie post concerning Grannie Smith...

  rawprawn 16:39 17 Oct 2008

As a medium to long term investment yes.

  Forum Editor 18:20 17 Oct 2008

of buying shares you're gambling, and there's absolutely no guarantee that you won't lose all your money. Buy shares in rock-solid businesses and you're hedging your bets. Take a chance on sparkly young arrival and you're backing an outsider - it might win spectacularly, and make you rich, but it could easily vanish almost overnight and leave you broke.

Would I buy shares with a £5000 windfall? I might, but it would depend on how little - or how much - I needed the money at the time. At the moment there are some shares to be had for a fraction of the price they were a year ago, and if you can afford to wait they'll probably recover well.

  laurie53 20:16 17 Oct 2008

I would buy every low priced banking share I could lay my hands on.

By hook or by crook they will come out of this smelling of roses, and so, if they can hold on through the storm, will their shareholders.

If these shares have not doubled or tripled in price in ten or fifteen years it will be a first.

  Kev.Ifty 22:37 17 Oct 2008

Some unbiased advice
click here

  Condom 21:22 18 Oct 2008

So that is what I need to do. Wrap myself in clingfilm and the taxman can't touch me. lol.

  cluckinbell 22:29 18 Oct 2008

Obviously if you have any outstanding loans, credit cards etc, that should be the first thing you do with your windfall.

forum.member - care to elaborate?

  oresome 23:59 18 Oct 2008

"I would buy every low priced banking share I could lay my hands on."

Well you're spoilt for choice because there's certainly no shortage!

I wouldn't agree with the FE's sentiment that investing in shares for the long term is gambling. There are risks involved which can be minimised by careful selection and diversification, but inflation poses a risk to money left under the mattress or in a deposit account, leaving aside the solvency of the banks involved.

Evidence suggests that investing in equities is one of the few ways to maintain the value of your money against inflation over the long term.

Interest rates are forecast to fall further over the coming months. This is bad news for anyone trying to live off the interest on their savings left on deposit and they will be hard hit. A 1% fall from say 5% to 4% will mean a loss in their income of one fifth or 20% at a time when inflation is still around 5%. And interest rates could fall further, reducing income even more.

These are two of the reasons, (inflation and interest rate fluctuations), why those living off savings have to seek alternative ways of making their money work harder than in a deposit account and accept and manage the risks involved.

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