david_thesalmst
New member
Preaching to the choir here, but always good to have the hard numbers.
In the past year or so, we had a lot of posts in /r/UKPersonalFinance asking why even risk investments when fixed-rate savings were paying 6%+ per year.
Well, it's been six months so I thought why not take a look at the relative performance over that period for some common markers, keeping in mind inflation is now at ~4%:
Obviously there might be a crash in the next 6 months, and all us investors will look stupid! But we might also see another 5+% rise and have outperformed those savings accounts by ~10%.
The point being: going with a high-interest savings account over the market just because the number looks big, is a type of timing the market, and a fool's game.
In the past year or so, we had a lot of posts in /r/UKPersonalFinance asking why even risk investments when fixed-rate savings were paying 6%+ per year.
Well, it's been six months so I thought why not take a look at the relative performance over that period for some common markers, keeping in mind inflation is now at ~4%:
- 12-month 6% fixed savings account: +3%
- Vanguard Global All-Cap: +9.4%
- VWRP: +9.4%
- HSBC FTSE ALL WORLD INDEX CLASS C: +9.4%
- S&P500: +12.5%
- FTSE100: -0.60% (lol)
Obviously there might be a crash in the next 6 months, and all us investors will look stupid! But we might also see another 5+% rise and have outperformed those savings accounts by ~10%.
The point being: going with a high-interest savings account over the market just because the number looks big, is a type of timing the market, and a fool's game.