£15k Savings - How to minimise inflation erosion

[paulrockliffe]

What would you do with it? It's my girlfriends, she's fairly risk averse and I don't trust Banks to invest it for her, so I suspect that some sort of fixed term savings account will be the best option, but would like other suggestions to consider?

I think she'd be happy to fix for 5 years btw.

Thanks.

[Swoxy]

Bank of Baroda's five year bond only via moneysupermarket.com.

[Fittster]

CPI or RPI inflation?

[paulrockliffe]

Fittster said:

CPI or RPI inflation?

It doesn't really matter, I meant what's the best return on investment available.? I was refering 'real' inflation, not made up numbers, I don't think anything will close to real inflation.

[paulrockliffe]

Swoxy said:

Bank of Baroda's five year bond only via moneysupermarket.com.

Yes, saw that, it's on the list. Apparently Zopa isn't to be considered.

[nomisesor]

Unless you have a tardis, difficult - NS&I RPI + 1% tax-free certificates now withdrawn though some building societies have offered (less than AAA rated) bonds to keep up with RPI - they tend to sell out within days. One possibility is to look at an equity ISA for the first £10.2k with blue chip companies yielding good (still sub-RPI) returns - but BP was a prime example of those until it hit the blow-out field in the Gulf of Mexico, and whilst the movement in the market over the last couple of weeks would have given a big head start, it may not continue its bull run. Not sure that you can get any risk-averse inflation proof investments at present. She can't put it against credit card debts or mortgage payments by reducing capital by any chance? - that would effectively provide above RPI returns for almost any recent mortgage, even for a lower rate taxpayer.

[rudecherub]

Gold.

[ringram]

rudecherub said:

Gold.

Ah, the bigger fool theory!

[Bing o]

rudecherub said:

Gold.

Not a bad call, it's Indian wedding season and there is always a spike this time of year in the price.

The only way I can see to ride out inflation is to move it into a non-cash asset/investment.

[markcoznottz]

Bing o said:

rudecherub said:

Gold.

Not a bad call, it's Indian wedding season and there is always a spike this time of year in the price.

The only way I can see to ride out inflation is to move it into a non-cash asset/investment.

Buy a Mclaren F1 or a Ferrari F40. .

[DS3R]

markcoznottz said:

Buy a Mclaren F1 or a Ferrari F40. .

You won't get a particularly good example of either for £15k.........................

[rudecherub]

musclecarmad said:

rudecherub said:

Gold.

why do you suggest someone should invest when it's the highest it has ever been?

this guy DOESNT want risk

It's got a way to go before it hits the peak 1980's price when adjusted for inflation.

It's high because people are buying it because the world economy is shaky, and there isn't any reason to think it's getting better soon.

QE in US and UK is going to drive up inflation.

[ringram]

Gold has a very low intrinsic value. There are plenty of substitutes. Its good for conduction etc. But anyone with experience of tulip bulbs would know that Gold is not a store of value. Its a metal with limited uses. Plain and simple like its owners.

[rudecherub]

ringram said:

Gold has a very low intrinsic value. There are plenty of substitutes. Its good for conduction etc. But anyone with experience of tulip bulbs would know that Gold is not a store of value. Its a metal with limited uses. Plain and simple like its owners.

Gordon how are you doing? Going to turn up at Westminster and do the job you're being paid for maybe?

If you mean there are other precious metals that are used in specific stuff, say batteries, tech, etc, sure they would be a good hedge at the moment too.

But the OP has £15k and wants low risk. He could buy a couple of acres I suppose. But Gold keeps it simple.

[paulrockliffe]

Thanks for the suggestions.

I'm pretty sure gold won't fly, but I'm going to suggest it to see what response it gets and why and will report back.......

[markcoznottz]

DS3R said:

markcoznottz said:

Buy a Mclaren F1 or a Ferrari F40. .

You won't get a particularly good example of either for £15k.........................

Yeah I know,slightly galling though that weathly people can not only buy amazing cars but make money on them as well!.

[Fittster]

ringram said:

Gold has a very low intrinsic value. There are plenty of substitutes. Its good for conduction etc. But anyone with experience of tulip bulbs would know that Gold is not a store of value. Its a metal with limited uses. Plain and simple like its owners.

It does have a rather better track record than tulips or paper, claiming that gold is not a store of value is plainly wrong. The fact that Gordon Brown didn't want it is probably a good enough reason to buy it.

Whether now is a good time to buy with prices at record highs is a different matter.

Edited by Fittster on Wednesday 15th September 20:01

[NoelWatson]

rudecherub said:

But the OP has £15k and wants low risk. He could buy a couple of acres I suppose. But Gold keeps it simple.

Can you explain why Gold is low risk please?

[Fittster]

NoelWatson said:

rudecherub said:

But the OP has £15k and wants low risk. He could buy a couple of acres I suppose. But Gold keeps it simple.

Can you explain why Gold is low risk please?

You could always argue it will always be worth something. A share or a bond can become worthless a physical asset will always have a worth. If gold is a hopeless as a store of wealth why do central banks hold it?

Note: I'm not saying buy gold. The problem with a commodities is valuing them, gold may or may not be overvalued.

Edited by Fittster on Wednesday 15th September 22:10

[Beardy10]

Swoxy said:

Bank of Baroda's five year bond only via moneysupermarket.com.

Out of interest...do you know anything about the Bank of Baroda ?