SIPP Investments at present

NeverEnough

My pension is in a Hargreaves Lansdown SIPP - employers make monthly contributions (I'm in a senior management position) however, currently, with the volatile stockmarkets, I have accumulated some cash which is just sitting there, doing nothing, waiting for me to invest.......must be about £7K waiting at present. I know its not ideal just having cash sitting there........any investment ideas, anyone?? I have investments in the SIPP in a number of funds, but this is just the uninvested cash I'm wondering about. Or should I let the cash build up and then buy a commercial property in the SIPP??

darkvader

The volatile market is exactly what savvy investors with cash wait for. While no one can predict the market, uncertainty will be there for sometime so its best to spread out your investments maybe over 7 months, wait for days when the markets are down for a few days in a row and put some money in.

Remember, this is for the long term so as long as you have a horizon of 5 years or so, you will only gain by entering now. 5 years from now it wont make a big difference when you invested during the low period. Everything is down from its recent highs, most shares/funds and the likes have corrected by 15% and even more so its all going at better valuations than a year back

Think of it this way - if you do nothing and when you finally decide to invest the markets already get steady and coup about 10% or 15% of its losses then that's your loss. So chose what you want to invest in, spread the time frame based on your preference, and begin the process. You may lose a little in the short term but if your horizon is long then you wont lose

DV

dunstonh

I know its not ideal just having cash sitting there........any investment ideas, anyone??

You could ask HL. After all you are paying them the IFA commission.

Or should I let the cash build up and then buy a commercial property in the SIPP??

How will that help you? Do you have experience of commercial property investing?

currently, with the volatile stockmarkets

Which is great for regular contributions. Far better than the 90s and 2000s that saw long periods of growth and large declines.

BLB53

Take advantage of the downturn and pick up a few high yield quality blue chip shares - Vodafone, M & S, Centrica (Br Gas), Scottish & Southern. Alternatively buy a couple of Investment Trusts, City of London, Murray Income etc. You will not regret it in the long run - high yield equities offer the best returns over the longer term and if you buy the shares direct, this is a very low cost way.

BLB

gadgetmind

BLB53 wrote: »

Take advantage of the downturn and pick up a few high yield quality blue chip shares - Vodafone, M & S, Centrica (Br Gas), Scottish & Southern.

I know we both do this, but TBH as you need 15 to 20 holdings, and it makes little sense to buy less than £1k of each due to costs, this isn't yet a great option for the OP/

Alternatively buy a couple of Investment Trusts, City of London, Murray Income etc. You will not regret it in the long run - high yield equities offer the best returns over the longer term and if you buy the shares direct, this is a very low cost way.

Yup, I also like ITs, but HL will charge 0.5%pa to hold them (cap of £200) - still, better than fund TERs.

I hold Troy Trojan, Ruffer European and Ruffer Total Return as funds with HL. Trojan is a cracker, as is the PNL IT analogue, and while the Ruffer funds are a little off the boil, this might be a buying opportunity.

Cf Miton Strategic is another conviction fund that seems to handle the bad times, though not as well as Troy Trojan, which is up on the year.

BLB53

Yup, I also like ITs, but HL will charge 0.5%pa to hold them (cap of £200)

I am with sippdeal who make no charges for holding shares and ITs. I guess HL make a lot of money in commision from the funds so would not be happy for people to hold shares and ITs hence the 0.5% fee. Over time this extra charge of holding only funds (higher TERs) or taking a hit of 0.5% will be a drag on returns. Maybe consider moving to a low cost provider?

BLB

gadgetmind

BLB53 wrote: »

Maybe consider moving to a low cost provider?

I don't have a HL SIPP. However, as they cap the 0.5% at £200, it's not actually too bad a place for a large SIPP of ITs and shares.

BLB53

I don't have a HL SIPP. However, as they cap the 0.5% at £200, it's not actually too bad a place for a large SIPP of ITs and shares

.
But £200 pa (plus vat?) over say 30 years = £7,200. With e.g. Sippdeal, no annual fee so that money saved remains in your pension pot. I know what I would rather do.

BLB

jamesd

There's absolutely nothing wrong with holding cash at the moment, nor indeed at any other time when market conditions or investment plans make it desirable.

If you want options, are you aware that Hargreaves Lansdown offers the option to use covered warrants? You could look into using those to possibly make money from drops in markets, with an exposure that's capped at the purchase price of the warrant.

Knowing the bottom of a market is tough but knowing when it's been rising consistently for a while is easier. You'd miss the biggest gains if you could time the bottom perfectly but waiting has some advantages, reducing the chance of buying before another 20% drop.

Or buy and also buy covered warrants to protect you from a drop. Or buy with regular small purchases to try to cover the bottom of the market and some of the drop and gain on either side of it, since picking the exact bottom takes luck.

BLB53 wrote: »

But £200 pa (plus vat?) over say 30 years = £7,200. With e.g. Sippdeal, no annual fee so that money saved remains in your pension pot. I know what I would rather do.

Yet Sippdeal also charges £9.95 for fund deals while with HL you get an unlimited number at no extra cost beyond the fund AMC. That makes Sippdeal very expensive by comparison for those using funds. Sometimes using two places could be better, one for funds, another for other investments.

BLB53

Yet Sippdeal also charges £9.95 for fund deals while with HL you get an unlimited number at no extra cost beyond the fund AMC

And the reason they make no charge to buy funds is....?!

jamesd

They simply charge differently. HL only with commission for funds, Sippdeal with transaction costs as well as any commission they get.