The FTSE

[Manchester33]

Thanks for the info. I held off topping up my current Moneyfarm S&S ISA in this new tax year, so am open to exploring another provider since I've read most robo semi-actively managed ISAs will naturally invest with more caution & unlikely to catch the upside of any large stock market changes.

A few people seem to have recommended/spoken well of Vanguard and in particular their Life Strategy S&S ISAs.

Curiously, if I were to invest now in a high equity to bond ratio fund such as 80:20, I would have avoided the March/April large percentage drop in such a high equity portfolio but in theory will catch the coat tails of an inevitable equity value increase right?

Looking at their latest website performance charts their Lifestrategy 80:20 portfolio increased 4.97% in May compared to 2.88% for their 40:60 portfolio.

Was thinking of possibly going down this route and changing to a different lower equity Lifestrategy portfolio next tax year. Hoping of course, we don't see another global pandemic of this magnitude which would decrease equities to the extent of this year.

Thoughts would be much appreciated.

I invest in Vanguard LifeStrategy 100 and fully recommend it. I'm starting to move over to their Total Stock Market fund as it's cheaper.

 

[Manchester33]

Some advice from an investing nerd:

1 - Start investing ASAP. The younger the better

2 - Set a monthly budget which you will invest regardless of 'how the market is doing'

3 - If your employer offers a pension % match, make sure you're maxing it out

4 - Avoid actively managed funds (there are numerous studies indicating they rarely outperform the market - especially after considering costs)

5 - Unless you have no-clue and tons of money, avoid financial advisors (DO YOUR OWN RESEARCH or ask for help on various forums)

6 - Picking individual stocks is essentially gambling, use diversified index funds

7 - Avoid commodities, currencies (especially crypto-currencies) or anything else that has no intrinsic value (watches, wine, dutch bulbs, website domains, collectables)

8 - Ignore the market. Don't panic when your stocks drop, don't alter your investments, just continue to plod along and keep investing - selling in a crash is the real-life version of jumping off a cliff because all your friends are doing it.

 

[Manchester33]

Tesla looks like a disaster waiting to happen. Shares selling for $1000 a piece, despite the fact that the company is yet to turn a profit over more than a quarter. JP Morgan recently set a price target of $275 a share. Even the CEO thinks thinks the valuation is too high. Seems like a bubble to me. They’re not the only ones though. Shares in Nikola have risen 6.5X over the last two months and they don’t even have a product to sell!

I disagree. I'd never advocate buying an individual stock regardless, but think Tesla is a pretty solid company.

Electric car sales are increasing, Tesla is clearly the market leader for EVs, It has a huge charging network in place. I think it's well-poised in a changing market.

That's before you consider the automated driving software they're working on. Elon Musk tweeted the price was too high because he wants to buy back shares. I'd rather be invested in a forward-thinking company like Tesla, rather than the likes of Vauxhall who're offering nothing innovative what so ever.

 

[hammersmithlad]

I invest in Vanguard LifeStrategy 100 and fully recommend it. I'm starting to move over to their Total Stock Market fund as it's cheaper.

Was also considering LS 100 but am hesitant on full equity exposure, even though I doubt bonds will actively perform anytime soon. I also see the fund has a significant UK equity tilt towards it, which coupled with the impending Brexit I'm not so optimistic with.

Curiously, is the Lifestrategy 100 rebalanced at certain points on the year or purely passive management?

The Total Stock Market Fund you mentioned seems intriguing, as its noted as containing total US equity exposure, but I couldn't see the fund on their actual website. Is it a fund a stocks and share ISA could be invested in?

 

[Manchester33]

Was also considering LS 100 but am hesitant on full equity exposure, even though I doubt bonds will actively perform anytime soon. I also see the fund has a significant UK equity tilt towards it, which coupled with the impending Brexit I'm not so optimistic with.

Curiously, is the Lifestrategy 100 rebalanced at certain points on the year or purely passive management?

The Total Stock Market Fund you mentioned seems intriguing, as its noted as containing total US equity exposure, but I couldn't see the fund on their actual website. Is it a fund a stocks and share ISA could be invested in?

You need to weigh up your risk tolerance. If you're close to retirement you'll want to reduce volatility and perhaps opt for a higher % of bonds. If you're further away stocks will probably be a better option. I wouldn't worry too much about UK bias. It's still very diverse and unless you're planning on emigrating it shouldn't affect you too much. If you want something more diversified and cheap https://api.vanguard.com/rs/gre/gls/1.3.0/documents/9050/gb/ might be a good shout. Curiously VTSAX isn't available on their UK platform currently.

Here's what Vanguard say about rebalancing LS funds

Automatic rebalancing
If you understand the value of rebalancing but you don't want the bother of deciding when and how to do it, here's some good news: our LifeStrategy and target retirement funds have automatic rebalancing built in. We manage both of these fund ranges according to set asset allocations and we rebalance all of the portfolios back to those allocations regularly. And because we're running large funds incorporating many customers' investments, we can do this rebalancing at lower cost than investors could achieve on their own.

 

[hammersmithlad]

You need to weigh up your risk tolerance. If you're close to retirement you'll want to reduce volatility and perhaps opt for a higher % of bonds. If you're further away stocks will probably be a better option. I wouldn't worry too much about UK bias. It's still very diverse and unless you're planning on emigrating it shouldn't affect you too much. If you want something more diversified and cheap https://api.vanguard.com/rs/gre/gls/1.3.0/documents/9050/gb/ might be a good shout. Curiously VTSAX isn't available on their UK platform currently.

Here's what Vanguard say about rebalancing LS funds

Many thanks for the investing info & I should have really read the VG website more closely in regards to rebalancing LS funds.

I'm quite a way off retirement, which is why I'm seeking more aggressive growth funds.

Tis strange indeed why VTSAX fund is only offered on Vanguard's American platform. However, the FTSE Global All-cap Index seems very attractive & ticks a lot boxes for me.

 

[Millwallawayveteran1988]

Some advice from an investing nerd:

1 - Start investing ASAP. The younger the better

2 - Set a monthly budget which you will invest regardless of 'how the market is doing'

3 - If your employer offers a pension % match, make sure you're maxing it out

4 - Avoid actively managed funds (there are numerous studies indicating they rarely outperform the market - especially after considering costs)

5 - Unless you have no-clue and tons of money, avoid financial advisors (DO YOUR OWN RESEARCH or ask for help on various forums)

6 - Picking individual stocks is essentially gambling, use diversified index funds

7 - Avoid commodities, currencies (especially crypto-currencies) or anything else that has no intrinsic value (watches, wine, dutch bulbs, website domains, collectables)

8 - Ignore the market. Don't panic when your stocks drop, don't alter your investments, just continue to plod along and keep investing - selling in a crash is the real-life version of jumping off a cliff because all your friends are doing it.

I agree with most of that but I think at these levels and with the world changing on the back of this and other things such as climate etc, I do think that there is opportunity currently for stock picking active managers. It’s interesting how well the VG LS funds did when markets were falling in March and how they have lagged a bit in the last 3 month bounce. Overall though they have a very good long term track record.

I pick active funds based on a number of criteria and these include.

1. The manager must have been in charge of the fund for at least 8 years.
2 The manager should have outperformed his/her peer group in at least 8 of the last 10 years or 7/8 if a shorter period and must have outperformed in both rising and falling markets.

I agree though that most active managers don’t outperform and it’s an industry riddled with jobs for the boys at the top level. They very rarely get sacked, regardless of how they perform.

 

[Wafty Cranker]

I disagree. I'd never advocate buying an individual stock regardless, but think Tesla is a pretty solid company.

Electric car sales are increasing, Tesla is clearly the market leader for EVs, It has a huge charging network in place. I think it's well-poised in a changing market.

That's before you consider the automated driving software they're working on. Elon Musk tweeted the price was too high because he wants to buy back shares. I'd rather be invested in a forward-thinking company like Tesla, rather than the likes of Vauxhall who're offering nothing innovative what so ever.

I agree with your points, it's well-poised as you put it, but I don't think that makes it a $200 billion company.

Essentially it's a company with bags of potential, but is currently way overpriced in my opinion.

 

[Homar]

I disagree. I'd never advocate buying an individual stock regardless, but think Tesla is a pretty solid company.

Electric car sales are increasing, Tesla is clearly the market leader for EVs, It has a huge charging network in place. I think it's well-poised in a changing market.

That's before you consider the automated driving software they're working on. Elon Musk tweeted the price was too high because he wants to buy back shares. I'd rather be invested in a forward-thinking company like Tesla, rather than the likes of Vauxhall who're offering nothing innovative what so ever.

I agree that Tesla probably has a good future. The problem for me is the price. It’s valued at about 2.5X that of Volkswagen. That is just absurd when you consider the fact that Volkswagen are a giant, are profitable and have a long history of operating profitably. AFAIK, Tesla has never turned a profit over more than a quarter. It is going to face increasing competition from the established manufacturers, which have built up and fine tuned their manufacturing capabilities over decades.

Autonomous driving technology is not unique to Tesla. Companies like NVIDIA are going to license their technology, which will allow the likes of VW and Ford to close the gap remarkably quickly. I don’t see what Tesla’s long-term competitive advantage is. The market has priced in market domination, which I think is highly unlikely.

The stock was priced at around $200 just a year ago, which is probably closer to fair value. Not much has changed since then. In fact, you could argue that market conditions have deteriorated.

 

[Wafty Cranker]

I disagree. I'd never advocate buying an individual stock regardless, but think Tesla is a pretty solid company.

Electric car sales are increasing, Tesla is clearly the market leader for EVs, It has a huge charging network in place. I think it's well-poised in a changing market.

That's before you consider the automated driving software they're working on. Elon Musk tweeted the price was too high because he wants to buy back shares. I'd rather be invested in a forward-thinking company like Tesla, rather than the likes of Vauxhall who're offering nothing innovative what so ever.

I keep waiting for Tesla’s price to have a correction, every day it just seems to go up.

That Nio someone mentioned a few pages back isn’t doing to shabby either.

 

[hammersmithlad]

I keep waiting for Tesla’s price to have a correction, every day it just seems to go up.

That Nio someone mentioned a few pages back isn’t doing to shabby either.

Agree. Yes Nio does seem to be doing rather well. Although, as a poster mentioned earlier its puzzling to note whilst electric car sales & infrastructure is on the up, I'll be surprised if the traditional car manufacturers don't play a more intense catch-up with Tesla & Nio & ultimately use their economies of scale to their advantage.

Slightly off topic, has anyone looked into investing in corporate bonds & if now is a good time to dip in? I would assume there is now a greater demand for corporate debt.

 

[MCFC_ Phil]

Some advice from an investing nerd:

1 - Start investing ASAP. The younger the better

2 - Set a monthly budget which you will invest regardless of 'how the market is doing'

3 - If your employer offers a pension % match, make sure you're maxing it out

4 - Avoid actively managed funds (there are numerous studies indicating they rarely outperform the market - especially after considering costs)

5 - Unless you have no-clue and tons of money, avoid financial advisors (DO YOUR OWN RESEARCH or ask for help on various forums)

6 - Picking individual stocks is essentially gambling, use diversified index funds

7 - Avoid commodities, currencies (especially crypto-currencies) or anything else that has no intrinsic value (watches, wine, dutch bulbs, website domains, collectables)

8 - Ignore the market. Don't panic when your stocks drop, don't alter your investments, just continue to plod along and keep investing - selling in a crash is the real-life version of jumping off a cliff because all your friends are doing it.

My pension with the Prudential. I've told them my view on risk and then I let their traders do the work. Don't think I could do that myself. Only 6 years off retirement and the fund seems to be doing ok, even in these times. Should I be doing anything different?

 

[aguerrrroooooooooooo]

Some advice from an investing nerd:

1 - Start investing ASAP. The younger the better

2 - Set a monthly budget which you will invest regardless of 'how the market is doing'

3 - If your employer offers a pension % match, make sure you're maxing it out

4 - Avoid actively managed funds (there are numerous studies indicating they rarely outperform the market - especially after considering costs)

5 - Unless you have no-clue and tons of money, avoid financial advisors (DO YOUR OWN RESEARCH or ask for help on various forums)

6 - Picking individual stocks is essentially gambling, use diversified index funds

7 - Avoid commodities, currencies (especially crypto-currencies) or anything else that has no intrinsic value (watches, wine, dutch bulbs, website domains, collectables)

8 - Ignore the market. Don't panic when your stocks drop, don't alter your investments, just continue to plod along and keep investing - selling in a crash is the real-life version of jumping off a cliff because all your friends are doing it.

Everyone should read this book:
Amazon product ASIN 1533667926

 

[aguerrrroooooooooooo]

My pension with the Prudential. I've told them my view on risk and then I let their traders do the work. Don't think I could do that myself. Only 6 years off retirement and the fund seems to be doing ok, even in these times. Should I be doing anything different?

It really isn't difficult with simple index funds, actively managed funds will seriously harm your investments over time with fees

 

[Skip Donoghue]

I keep waiting for Tesla’s price to have a correction, every day it just seems to go up.

That Nio someone mentioned a few pages back isn’t doing to shabby either.

It was me who mentioned NIO, its up over 100% March and is still on the up, it jumped from $7.93 and closed at $9.38 on Thursday evening, based on the 2nd quarter sales and is expected to open on Monday over $10
its only selling cars to the Chinese Market at the min but the quality is 2nd to none, even rating higher than Tesla in the eyes of some critics
Next week will be interesting to see if the SP keeps climbing or if there will be a pull back
I'm in for the long haul so the short term I'm not to bothered about, I'm hoping in 5-10 years in might be looking at $100 per share
With the issuing of shares, the input of over $1billion by the Chinese government and the gobbling up of shares by Tencent, Goldman, Suisse Bank amongst others the time may just be right for NIO, they're selling vehicles they're manufacturing vehicles (all be being built by another company) and are not that far from turning a profit, I can only see this flying

There is also rumours of a hook up with VW and if that was to happen who knows where it could go

 

[Manchester33]

My pension with the Prudential. I've told them my view on risk and then I let their traders do the work. Don't think I could do that myself. Only 6 years off retirement and the fund seems to be doing ok, even in these times. Should I be doing anything different?

What's their fee?

Remembering that you can invest in really good index funds for less than 0.2%, if your fund costs around 1% for example, their fund would have to outperform the index fund by 0.81% to justify the cost.

I don't necessarily think you should be doing anything different, and please don't take my advice as gospel (do your own research - monevator is a good website to start with), but I would try and ensure you're not spending more then you have to.

When determining risk, they usually use the bond/stocks ratio. A very conservative approach would include a higher % of bonds (80% bonds 20% stocks). Vanguard have their LifeStrategy funds which cater for the differing levels of risk (and the funds are quite cheap/well diversified).

 

[Manchester33]

Everyone should read this book:
Amazon product ASIN 1533667926

Yes, brilliant book and a great author. His website is a treasure trove for investment nerds like myself.

https://jlcollinsnh.com/stock-series/

 

[Wafty Cranker]

If anyone has a few quid to spare have a look at an EV (electric car) company in China called NIO, they are aiming to be a competitor to Tesla, they have just raised $400mil in a share issue and have had a $1billion investment from the Chinese government
It is high risk at the min, but the shares are trading around $7.40 mark but its likely this will increase to double figures when Junes sales are released early July

For an example Tesla started at $17 a share back in 2010 and are trading at the moment at over $1000 a share

I'm not saying this is in anyway a Tesla but if it could be half a Tesla the returns could be mint
Some big players Gold man, Jp Morgan, Bank Suisse have been buying up large amounts of this stock recently also

It's already up 50% from you writing this a few weeks ago!

 

[Skip Donoghue]

It's already up 50% from you writing this a few weeks ago!

It's gone crazy again today, closed at $11.51 up from $9.38 and is climbing again after hours
I'm expecting a pull back at some point to be honest, but I'm in it long for anything between 5-10 years and still adding shares during dips, so not to bothered if it does I'll just add more
It could be by the end of this week at anything between $13-$15 who knows
There are rumours they've purchased their own factory in China and are also looking to a possible partnership with VW, if either of these rumours turn out to be true anything is possible

 

[DenisLawBackHeel74]

It's gone crazy again today, closed at $11.51 up from $9.38 and is climbing again after hours
I'm expecting a pull back at some point to be honest, but I'm in it long for anything between 5-10 years and still adding shares during dips, so not to bothered if it does I'll just add more
It could be by the end of this week at anything between $13-$15 who knows
There are rumours they've purchased their own factory in China and are also looking to a possible partnership with VW, if either of these rumours turn out to be true anything is possible

Yes it has. I’ve seen nearly 300% since Jan.