Grumpy David wrote:pjbetman wrote:Grumpy David wrote:pjbetman wrote:Grumpy David wrote:pjbetman wrote:Tomous wrote:Not sure I've asked this before but I'm finally getting my gooseberry fool together-what's the best way of investing in index funds?
I want to use the £20k ISA allowance and put it in some index fund where it can sit for the long-term and tick along nicely.
What are the best online portals to do this through? Obviously looking for as low a fee as possible. Nutmeg is one I've been looking at.
Look into Blockfi. 8.6% on balances.
Use this ccode for $10 each:-
https://blockfi.com/?ref=958e20e9
Doesn't seem to fit the criteria of:
Being able to use the ISA allowance
Being an Index Tracker
Yeah true, but why put it in an ISA that will perform miles worse than the blockfi accounts, despite it being tax free? The same logic for the index tracker. It was just a suggestion to use a better source of income/interest. And there's loads of them now - crypto.com, blockfi, nexo, wirex etc. people need to be moving away from these poorly peforming low interest bank accounts, ISA's, trackers etc. The banking system will be dead in 5 years unless they treat their customers fairly, like these new starters are. They've raised the bar massively. Debit/credit cards and loans are next for these institutions.
My S&S ISA has from June 2018 to January 2021 returned 55% and I'm willing to post the screenshot if not believed. That's a tax free return too due to the ISA wrapper and that's from holding during the lockdown market crash last March when it went to minus 20%. And being a regulated company it has the FSCS and Financial Ombudsman consumer protections you'd expect.
Blockfi is “high interest” because it’s not a savings account and it’s not a bank - it’s some random company offering high interest to get your money. "If it sounds too good to be true..."
If (when) they go broke your money is gone.
When they get hacked like other crypto sites have done, your money is gone.
When exposed as the largest fraud since Enron or Bitconnect, your money is gone.
If you want to gamble on it, ok, but this is an incalculably high risk product and should be treated as such.
Peer to peer finance sites like Ratesetter have far more risk than people realise and can be far less liquid than people expect them to be and especially when they need them to be. Lending your money out to low credit scoring clients is high risk lending. If the bank won't lend the client money because of failing to meet either/both affordability / credit scoring requirements then why should you want to take such a risk? Do you trust these Meme companies to do sufficient KYC and DD on their prospective clients?
I've a high risk tolerance for investing but this is the sort of thing thing that belongs in the 95/5 ratio (and arguably not even in the 5). 95% of your savings into normal index trackers etc and 5% into the "fun" activity of stock picking or crypto currency (to hold).
There's also no chance that your 5 year prediction comes true. Crypto sucks for use as a currency, it's way too volatile (and slow) for use in day to day expenditure or as a way to borrow on a loan or credit card.
Haha fair enough.....i didnt realise blockfi wasnt insured - it kind of plays around the issue of security, using Gemini...which i'm not sure about, but seems legit. Regulation will happen in this sector, just because it isn't FCA regulated doesn't necessarily mean your funds are at risk. But this isnt an area that i know much about.
I'm not sure what you're trying to say by stating that you made 55% then lost 20%. That doesn't seem very stable. Bitcoin has outpeformed that by many orders of magnitude. In June 2018 it was $6189, now it's about $33k. Approx 500% increase. I bet you your fund will struggle over the next 2 years, and most of that 55% will be completely gone, we're heading into the biggest recession in our lifetime. And a lot of people and institutional investors will be hedging into btc. I think the perception of bitcoin being risky, unstable is a very outdated viewpoint.
Bitcoin is also much much quicker when sending international transfers. My bank takes 2-4 days to action a payment to an international bank/institution. Bitcoin does it in less than an hour. I agree though, you're unlikely to be able to pay for a coffee on the fly with it......at the moment, but these issues will be ironed out, it's evolvng very quickly.
Listen, i'm not trying to argue with you, i'm just pointing out issues i see with traditional investments. You clearly know lot more than i do on the subject of finance, and i respect that.
If you didn't know Blockfi isn't a regulated financial product then it's probably not the best thing to recommend to others.
You've misread and misunderstood the point of mentioning the ISA.
I was down minus 20% and went up to 55% (not the other way round). Tax free.
Blockfi promises up to 8.6% interest rate (all the dodgy products seem to hover around this near double digit interest rate so that alone raises an immediate red flag). Which isn't as high of a rate of return as I've had even with a collapse in global stock markets to impact those returns. I'm not saying its stable but compared to a lending system based on crypto currency and peer to peer finance that has no proper regulation, it is incomparable.
Blockfi isn't bitcoin which has been the best performing asset of the last decade but that doesn't make Blockfi or Bitcoin the most suitable investment for most people. Bitcoin is a currency that behaves like a commodity (and unlike currencies and commodities it's got a very strong incentive to never spend/consume but to just hold) with volatility that makes a 100% equities portfolio look as stable as cash savings.
There's probably an argument to have 5% or so in crypto currency if you're particularly keen to take a punt on it. The 5% of total savings can be YOLO money if that suits risk tolerance.
Bitcoin can't scale to replace visa or mastercard. It can't process enough transactions simultaneously for it to ever go mainstream.
https://en.m.wikipedia.org/wiki/Bitcoin_scalability_problemI can see the appeal of bitcoin being a much higher percentage particularly if you live somewhere suffering hyper inflation like Venezuela or you have currency export controls on your money like in China.
I've used Transferwise to send money abroad and it's essentially an instant process. No need to buy bitcoin in pounds then send bitcoins to someone else to then transfer into their home currency and far less complicated too.
You can point out issues with traditional investment but it's worth remembering that these new services carry some potentially huge risks that make them ill suited to many people.
Oh i see, but the point still stands that it went down 20%....what's to stop that happening again? I certainly wouldnt like my dough in a global investment portfolio (or any to be honest) during a global pandemic. We haven't seen any of the financial/economic effects of that yet, but it wont be pretty.
The bitcoin scaling issue is the same scaling issue that the internet had in 1992. The internet, even now, cant scale what it's forecast to transmit/receive over the next couple of years. It's continually having the evolve to meet demand. Bitcoin will do exactly the same, as there's billions invested in it from a mining point of view. These miners are the exact same people who are technically driving the innovation in all sorts of modern technology (there's a high barrier to entry). It's in good hands.
I get the hyper inflation arguments for using bitcoin (and it's massive in those countries now), but wanting high returns isnt limited to poor people in foreign countries. Institutional investment is driving useage/price more than anyone now. This will drive the innovation in regulation as well. There will be a financial incentive for someone to crossover the regulation to the cryptosphere. It's inevitable.
How long are we going to be talking about people 'taking a punt' on bitcoin? Or discussing how risky it is? It's the best performing asset over the last decade, the last 5 years, the last 1 year, the last month, the last week and the last day. There's absolutely no argument against that...it's a fact. Are you going to be sitting here in another 1, 5, 10 years discussing how it cant scale, or you should only put 5% in? And we havent even reached the tipping point of mainstream useage/investment yet.
Ive never heard of Transferwise, but it isnt a bank im assuming? So, havent you got to transfer your money to them first? What's the point? Why cant i send my bitcoin to another bitcoin address in half an hour? If the banking system was better we wouldnt have these delays transferring currencies. There's clearly a massive improvement to be made in the banking system. If they dont sort it out crypto will replace it. It's a bit like talking about Royal Mail and sending an SMS in 1989.
I agree about the blockfi lending risk, even if neither of us know what it is. However, i can earn 0.8% per month using an extremely low risk algo trading forex, risking no more than 4% of the balance. So achieving 8%+ isnt as sketchy or risky as it seems. Who knows how they are earning the 8.6% to give to account holders? There's plenty of liquidity issues that businesses need to address, doesn't mean they are bad debtors or high risk borrowers.