General advice for my current savings/investments

noclaf

Hi All

I would like your thoughts on my current savings/investments,am not sure if my allocation needs to be changed in terms of risk exposure & could be made more efficient

32 years old working
living with rents, no mortgage at present unlikely to need untill possibly end of 2015,early 2016)
No debts apart from student loan which is paid via employer


8.5k in the bank, combo of cash isa and secondary savings a/c
11k in S&S ISA (no funds, invested in individual shares) via HL

(12.5k old employer pension invested via HL SIPP in Vanguard 80 life strat fund) current employer contributes £300 per month into a pension..I dont supplement this at present since I havent got a property yet so would like to focus on getting one first in next few yrs

I may need the 11k in the next 2 years though unlikely this year - so is this too risky to leave invested in shares?Im not an expert stock picker..some are up 30% or more this yr...some are 20% negative...make of that what you will! Ive been investing for last few yrs though did pull all my money out when I was unemployed for a period of time circa 2011/2012

I maxed out my ISA allowance for 2013/14 however the cash one does not have great interest so may transfer to another ISA in 2014/15

Should I concentrate on bolstering cash savings for this year to balance my risk out esp with majority of my money in shares at present? am tempted to drip feed monthly( £100?) into a tracker or fund for longterm investment

your thoughts and advice much appreciated

thanks

DireEmblem

Your savings bank seems relatively good - the only thing I would say is that you have more than half of your savings in a S&S ISA?

Now S&S in general they say will give you a better return long term - but if you are considering applying for a mortgage in the short term - would you be happy for say 30/40% of this current value to be written off? You say some stocks are up 30%, others down 20% - could you handle that?

Rather than reviewing your current savings/investments - why not sit down and write down some short/medium/long term goals? Gauge from that where you are best placed to put your money. IMO no more than 10-20% of your savings should be in S&S. Even more so if you think that in say under 5 years you may consider a mortgage, which you state you are considering in the next year/two.

Myself - I am only 29 with c. 14k in savings, and a further 1.5k in S&S that I plan to take out shortly. Once I get a mortgage, my savings will go on two items - overpayments for the mortgage, and a long term S&S tracker most likely similar to your idea - but for £150-300 PCM into 3 seperate 10 year savings pots. These pots would mature every ~ 3 years 4 months - so I should hopefully get a nice lump sum every three and a bit years.

noclaf

Hi DireEmblem,

I never planned to have >50% in S&S, some of that is profits so let it creep up a bit but play's on my mind that a stockmarket jolt could hit me where it hurts quite badly…11k is invested over 11 different stocks (not by plan or design) though not equally weighted etc
30/40% would be too much of a hit IMO – so I may consider pulling a chunk out and using only the ISA cash allowance for the new tax year2014/15

mortgage – could be 2-3 years away but its difficult for meto gauge when I will need to take the plunge and buy etc

Im curious/interested in your tracker idea, is this roughly your plan - invest in 3 trackers drip-fed monthly then every 3 years sell-up and throw the lump sum at your mortage as an overpayment?

you are a couple years younger than me and looking to get on the mortgage ladder at some stage so in a similar boat - if you don’t mind me asking whats your current savings strategy/allocation?

thanks

Totton

The first question for me would be how much did I need for the mortgage deposit and associated costs of buying that house. That would be my target, if you can reach it with cash savings then I would move my money into that pot, if I couldn't make the deposit in 2015 then it is a question of risk, do I gamble on the stock market making me enough for that deposit

If you can put your mortgage off for a year or more in the event of a stock market downturn then perhaps gambling on the stock market is a risk worth taking, if you definitely need that cash for 2015 then perhaps the stock market is a gamble too far.

This year to date has been fairly dismal for the market but as we approach the General Election we may see that changing as the Govt. do their best to introduce a feel-good factor into the economy, no matter what the underlying facts are. Of course they will get found out after the election in that scenario but once elected they won't care too much about that, the question is whether your risk profile is happy to gamble on the stock market over the next 12 months for that mortgage deposit.

Best of luck,

noclaf

Hi Totton

you are correct in that I am trying to use the stockmarket to beat the dismal interest rates offered by banks so I can push that mortgage deposit up. when I first started investing made the huge mistake of taking silly gambles with AIM oil and mining junior stocks...made quick money and lost it even quicker
I still invest in AIM but dont touch anything in oil/gas/mining, one day I will but for now I like to stick to less volatile stocks
2015 is not definate for a mortage,its possible that could be pushed out further but I will play it by ear.
Also agree that this year has been rubbish so far for markets...not helped by China and Russia/Ukraine situation.

thegrind

What company's does your portfolio consist of?

Obviously your well aware of China and Ukraine so yes these issues are currently not helping things generally (especially with my HSBC shares )

Insurers are also getting a kick in the teeth at the moment.

What sort of divi yield are you getting currently?

You have enough "on hand" cash for emergencies but it would be a shame if your future house deposit goes up in smoke if things turn nasty.

greenfairy28

Hello guys,
I've read your posts and my question is related to S&S ISA.
I'd very much appreciate your advice. I started it about 10 years ago (along with cash ISA) but withdrawn most of the money in 2008-9. I did not close the account but was asked to pay minimum of £20 each months, which I'm still paying in. In 2011 I also changed the investment portfolio to less risky and since I've been loosing money. My investment is now over £2K but the actual value of S&S today is half of it! I'm not good at picking up and checking which investment is good and can bring money and I don't think that the S&S ISA people in the bank would give me honest advice. In addition, I don't want to waste money this way unless I learn very quickly how to gamble a bit. What shall I do? Shall I change the investment portfolio and wait whether I can get back the lost money?
Also, I'm wondering how this will be affected by the introduction of NISA in July? Will I loose invested money for good if the value of S&S would be down? Thank you.

Totton

Worth taking a look at that investment portfolio again, you should have made in the region of 15 - 25% last year, a little less if you were very conservative or a bit more if adventurous. Losing investments were very conservative but are the exception in what was a good year for stocks.

I would't keep any investment on the basis that it had lost some value and I wanted to get my money back, when reviewing you should always consider whether you would buy it now, if not then think of selling into something that would be a better holding - don;t get too emotionally attached to a holding if you can help it.