518083
Description
Mind Map by d_mills_23, updated more than 1 year ago
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Created by d_mills_23
about 11 years ago
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INVESTMENTS pt1
- Deposit based investments
- Money is invested into a cash based account
- Interest rates can be variable or fixed
- Inflation is a major risk
- Inflation is a major risk
- Interest rates can be variable or fixed
- Money is invested into a cash based account
- Fixed interest investments
- Investing in securities I.e. Government or corporate bonds
- Coupon - fixed rate interest offered
- Par value - nominal rate paid on guilt upon redemption
- Redemption date - date the par value will be paid
- Taxed basic rate (20%) high rate (40%) additional (45%)
- Initial 10% tax is taken
- Initial 10% tax is taken
- Taxed basic rate (20%) high rate (40%) additional (45%)
- Redemption date - date the par value will be paid
- Index linked means the coupon rise with RPI
- Par value - nominal rate paid on guilt upon redemption
- Coupon - fixed rate interest offered
- Investing in securities I.e. Government or corporate bonds
- Asset backed investments
- Shares
- Companies issue shares to raise money
- Share dividends are paid with a 10% tax For basic rate -
22.5% for high rate , 27.5 for additional
- Share dividends are paid with a 10% tax For basic rate -
22.5% for high rate , 27.5 for additional
- Companies issue shares to raise money
- Property
- Residential
- Commercial
- Benefits - capital growth, rental
income, stable market compared
to equties and residential property
- Drawdowns - lack of tenants equal no
rent, vulnerable to economic conditions,
must be wealthy investor, property is not
liquid
- Benefits - capital growth, rental
income, stable market compared
to equties and residential property
- Real Estate Investment Trusts (REIT's)
- Allow smaller investor to
diversify by investing in a number
of property portfolio's
- to avoid corporation tax REIT's must pay
90% of their profit generated to the
shareholders
- to avoid corporation tax REIT's must pay
90% of their profit generated to the
shareholders
- Allow smaller investor to
diversify by investing in a number
of property portfolio's
- Residential
- Collective Investment Products
- Investors money is pooled and managed
by fund managers
- Invest in a number of assets
- benefits are that they reduce risk, economies of
scale, professional investment management
- benefits are that they reduce risk, economies of
scale, professional investment management
- Invest in a number of assets
- Unit Trust
- Pooled investment under trust deed
- Trust is divided into units,
managers are obliged to buy back
units investors want to sell
- has an objective - i.e. growth, income
- Offer price - when you buy
Bid price - when you sell
- Offer price - when you buy
Bid price - when you sell
- has an objective - i.e. growth, income
- Trust is divided into units,
managers are obliged to buy back
units investors want to sell
- OEIC - are companies and hence
you buy shares in the company
- Pooled investment under trust deed
- Unregulated
Collective Investment
Schemes
- Investment Trusts
- Closed ended
investment - cannot
simply issue more
units
- Net Asset Value (NAV) - shows what
shares are worth (net assets - liabilities)
- Gearing occurs when fund
managers borrow funds to invest
- Free from CGT
- Free from CGT
- Gearing occurs when fund
managers borrow funds to invest
- Net Asset Value (NAV) - shows what
shares are worth (net assets - liabilities)
- Closed ended
investment - cannot
simply issue more
units
- Platforms and Wraps
- Platform to hold all
investors investments in
one framework
- Facility for adviser to manage
clients investments
- Facility for adviser to manage
clients investments
- Platform to hold all
investors investments in
one framework
- Investors money is pooled and managed
by fund managers
- Shares
- Life Assurance Products
- Investment Bonds
- Sigle premium, non
qualifying, whole of
life assurance policies
- Unit linked
investment bonds
- With profits
investment
bonds
- NO CGT
- 5% can be taken out of the
investment each year
- 5% can be taken out of the
investment each year
- Unit linked
investment bonds
- Sigle premium, non
qualifying, whole of
life assurance policies
- Endowment bonds
- Regular premium, qualifying, set term
- Made form 1 part life
assurance, 1 part investment
- With profits endowments
- Money is pooled into the with
profits fund and managed
- Money is pooled into the with
profits fund and managed
- Unit linked
- Premiums are invested in the
investors choice of funds
- Premiums are invested in the
investors choice of funds
- With profits endowments
- Made form 1 part life
assurance, 1 part investment
- no tax payable upon maturity
- Regular premium, qualifying, set term
- No CGT
- Investment Bonds
- ISA's
- Tax free wrapper placed
around investment
- £5,670 is limit for both cash ISA
and stocks and shares
- Must be over 18
- Must be over 18
- £5,670 is limit for both cash ISA
and stocks and shares
- Junior ISA's
- available to children
born after 1 Jan 2011
- child can take control at age 16
- £3,270 overall limit on stocks
and cash - no individual limit
- £3,270 overall limit on stocks
and cash - no individual limit
- child can take control at age 16
- available to children
born after 1 Jan 2011
- Tax free wrapper placed
around investment
- National Savings and investments
- offers a range of savings and investment products
- HM Treasury - 100% secure
- HM Treasury - 100% secure
- Direct saver
- Investment account
- Premium bonds
- Income bonds
- Direct ISA
- Saving certificates
- offers a range of savings and investment products
- Enterprise investment schemes
- Investing in small companies
- Investing in small companies
- Venture Capital Trusts
- encourage investment in
unquotes companies
- encourage investment in
unquotes companies
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