What to do now.

ktk

After following the information on this board I invested last year's ISA in VLS80, and now have half of this year's allowance in the Woodford Patient Fund. I was going to put the rest of this years allowance straight into more VLS, but am now wondering if I should start to purchase some L&G multi6. I realise that I am not talking much money, but would appreciate your advice.

bowlhead99

The way I see it you have two obvious choices.

Either, decide whether you prefer the L&G approach to the VLS approach and put all your non-Woodford money (including your existing VLS money) into that approach.

Or, re allocate your non - Woodford money 50:50 between the VLS and the L&G so you can see how they both fare over the next decade, as a curiosity or a learning experience. Of course, you could always just wait until the end of the decade and pull up the two charts to compare them from some website, without needing to buy either of them. You just might find holding both of them interesting - depending on what you're interested in

Some investors would prefer the l&g at the moment due to its use of property and different relative weights of some countries. But the weights are not fixed, and probably what you should not do is try to pick from year to year which one of the two is the "best" for you to buy each year. Just pick one of their two approaches, and stick with it.

If you really can't decide and your platform carries both funds without transaction fees there is really no harm splitting the pot down the middle between the two of them. However, if your approach to investing is "I'll buy any fund that I hear about on MSE or in the media and which I think has a reasonable chance of making money over the long term", you will end up with a portfolio containing 500 funds.

Clearly, the risk and return of either of those fund-off-tracker funds are very different to the Woodford Patient fund. But as you only just bought that, there's no point us telling you it's very different from what you already have, because you know that.

ktk

Thank you Bowlhead. As you can see I am just dipping my toes at the moment. As I understand it the L&G fund has a different balance, which includes property that VLS doesn't. I won't be touching this for the foreseeable future and just want to see my money working.

On another point, I have a significant amount sitting in NS&I, which needs to be invested. I don't need it in the short term. Would these funds still be worth investing in outside an ISA?

Linton

ktk wrote: »

.......
On another point, I have a significant amount sitting in NS&I, which needs to be invested. I don't need it in the short term. Would these funds still be worth investing in outside an ISA?

Depends what you mean by short term. Anything you expect to need in the next 5 years I would keep in NSI or other cash accounts, and also enough emergency funds to cover living expenses for 6 months. The danger of putting all the long term money into funds in one go is that there is a market downturn and you get frightened. So if you have a lot of spare cash you could plan to fill up your ISA allowance each year and avoid the extra hassle of investments outside tax protection.

What about your pension arrangements? Could you use the spare NSI money to add to your pension?

ktk

Thanks Linton. I have cash in all the usual current accounts, and a healthy teachers pension to look forward to. The money in NS&I was an inheritance. Some is in Premium Bonds, which I will leave. It is the rest ( over £100k) that I think should be working harder. I would have no qualms about tying it up for ten years or more.

kidmugsy

ktk wrote: »

I have cash in all the usual current accounts, and a healthy teachers pension to look forward to. The money in NS&I was an inheritance. Some is in Premium Bonds, which I will leave. It is the rest ( over £100k) that I think should be working harder. I would have no qualms about tying it up for ten years or more.

If 10 years gets you to 57, then from your point of view a personal pension of some sort will be so flexible that it will be rather like an extra ISA allowance - just a useful tax-avoidance shelter. It would, however, be a gamble on your income tax rate not having increased when you come to draw the money out. It might also give you the freedom to retire earlier than the TPS normal pension age without having to pay an actuarial reduction.

Mistermeaner

ktk wrote: »

Thanks Linton. I have cash in all the usual current accounts, and a healthy teachers pension to look forward to. The money in NS&I was an inheritance. Some is in Premium Bonds, which I will leave. It is the rest ( over £100k) that I think should be working harder. I would have no qualms about tying it up for ten years or more.

I would say get spending; you have one iof the best pensions going and plenty stashed away. Don't worry about investing and get yourself a Rolex/Ferrari/Bimbo

On serious note I am doing similar to you with vls80 / l+g 6 / woodford and perhaps not text book is a valid way to invest imo

ktk

Bought the Ferrari and a villa on the med already!!! Well, paid off the mortgage at least.

I think I need to find out more about how the tax works on a pension. If I can invest some in a SIPP then that would be a good idea. I'm just not too sure how it works....

Zippeh

With regard the L+G 6, what is its full proper name as i cant find it?

ktk

It is called Multi Index, I think. There are several, with different splits of funds.

ColdIron

LEGAL & GENERAL MULTI-INDEX n FUND

Where n is a range of numbers representing your risk profile, e.g. 3, 4 etc There are also several classes with different fees