Hookers and cocaine
As someone who has invested in stocks and seen their worth halve I wish someone had given me this sound advice years ago
Hookers and cocaine
The Nasdaq has took a hammering over the last 8 months. However I have still continued buying shares with the view that recessions are relatively short in investment terms. I don’t expect to make anything for the next couple of years but after that it should recover making it a nice earner in the medium term.The property fund in my pension was more than making up for the fall in the stock market investments, but that took 10% hit last week
I'm not quite 60 and was looking to retire in two years, but with this collapse in the fund it looks likely yo be three
The stock market will bounce back and you have to be in it to win it
I've just checked and my mixed investments fund is 6.5% down in the last 12 month period but 84% up over the last 10 years
Talk to @SWP's backI have been thinking of posting this for a little while but with the cost of living crisis thought it may seem a little crass, it isn't meant to be, and I am genuinely curious.
To cut a long story short, i am in a fortunate position where i have now paid off my mortgage have no debt and have a good level of savings behind me (equivilent of 12 months expenses). I also have a healthy pension pot that I continue to contribute to each month, Have another 15 years before I can draw my state pension but ideally want to finish in 10 years.
I have 75% of my savings in a Bank account and the remaining 25% in a Vanguard stocks and shares ISA, but i don't want to keep topping up my savings account if I can make my money work for me, I just wondered what others do with regard to investing their money.
I could keep adding to the Vanguard ISA or ramp up my pension contributions, but would be interested in how others make their money grow.
Any suggestions other than Cocaine & Hookers?
Sounds like you’re doing pretty well looking after your own finances.I have been thinking of posting this for a little while but with the cost of living crisis thought it may seem a little crass, it isn't meant to be, and I am genuinely curious.
To cut a long story short, i am in a fortunate position where i have now paid off my mortgage have no debt and have a good level of savings behind me (equivilent of 12 months expenses). I also have a healthy pension pot that I continue to contribute to each month, Have another 15 years before I can draw my state pension but ideally want to finish in 10 years.
I have 75% of my savings in a Bank account and the remaining 25% in a Vanguard stocks and shares ISA, but i don't want to keep topping up my savings account if I can make my money work for me, I just wondered what others do with regard to investing their money.
I could keep adding to the Vanguard ISA or ramp up my pension contributions, but would be interested in how others make their money grow.
Any suggestions other than Cocaine & Hookers?
Be a little wary of property right now. The 12-24 month outlook is pretty grim. It doesn’t react quite as fast as equity to central bank rate hikes but mortgages are going to be a lot more expensive for the next couple of years and that will dampen property price increases and may see a largish fall over that period of time.The property fund in my pension was more than making up for the fall in the stock market investments, but that took 10% hit last week
I'm not quite 60 and was looking to retire in two years, but with this collapse in the fund it looks likely yo be three
The stock market will bounce back and you have to be in it to win it
I've just checked and my mixed investments fund is 6.5% down in the last 12 month period but 84% up over the last 10 years
Thanks for taking the time to reply, It does back up what i'm feeling.Sounds like you’re doing pretty well looking after your own finances.
Text book answer would say to ensure you have 3-6 months expenses covered in a cash account (that can include bank term deposits or premium bonds etc), with the rest, increase your funding into your existing investment account. If it’s more than your remaining ISA allowance then set it up into a non-ISA account (something like a unit-trust feeder account that automatically tops up your ISA each year - the investment stays the same, the ISA tax wrapper simply covers more with each passing year).
If you’re worried about under diversifying by putting it into the same funds then there are a million ETF’s that track indexes and/or a mixture of equities and fixed interest.
As you’re currently a little way off retirement and cover your expenses quite easily, I’d say that going in on the S&P500 in an ETF wouldn’t be a bad shout to help diversify away from your existing portfolio - assuming you’re not in it already.
Number of factors for that:
NB: obviously the above is incredibly generic advice and can’t be taken as individual financial advice, I don’t know you personally and haven’t undertaken a full factfind nor have I undertaken a steps necessary to ascertain your capacity and appetite for risk - a wholly equity based ETF isn’t for everyone.
- It’s very low cost and will automatically rebalance.
- It’s nicely diversified across a number of industries (tech, pharma, energy etc)
- It’s experienced a fairly bad past 12 months - which is good as the average S&P500 bear market lasts 13 months and the average bull market that follows lasts 4 years and sees 167% growth.
- You won’t have to pay any adviser to look after it for you.
- It’s averaged 11% net per year over the last 30 years - which takes into account the dot com bubble bursting as well as covid and the credit crunch.
- You’re not relying on the Tories not continuing to fuck up the U.K. economy.
- It looks like the US is past peak inflation and whilst they may still stall a bit in terms of the economy, the market prices that in 6-12 months ahead of time which also means the market can and will continue to grow before any recession ends.
- I personally think the US stock market has already seen its bottom and whilst it will continue to show increased volatility over the next 12-36 months, I believe we will see positive growth during that time.
I personally moved a large amount of my portfolio - the part that I “play” with and that’s not actively managed by professionals - into the S&P500 about two weeks ago and I intend to keep it there for at least the next 5 years.
If you’re looking for something more balanced that has a 60:40 equity/fixed interest split then Vanguard 60:40 Life Strategy is one of the best multi-asset funds around for a balanced investor.