Is a Crash Likely (2015-ish)? Should a New Investor Wait a While to See?

arbster

Damage wrote: »

When you put it like that then it's clearly the way to go. I know absolutely nothing about how any of this works at the moment, so I will need to read up on it as well.

Of course, pensions are no good if you need to get at the money before you're 55, but if you have no pension at all I'd suggest you should be investing in some form of investment that you won't touch til you're 55+... which makes a pension the best option.

EDIT: This is the part in Time Hale's book where he talks about making your investments as tax-efficient as possible

TH1878

Damage

arbster wrote: »

Of course, pensions are no good if you need to get at the money before you're 55, but if you have no pension at all I'd suggest you should be investing in some form of investment that you won't touch til you're 55+... which makes a pension the best option.

EDIT: This is the part in Time Hale's book where he talks about making your investments as tax-efficient as possible

I'm almost certain that I won't need any of this money, so I'm happy to commit to at least a high-end-of-medium (15-year) period. That helps with the decision.

arbster

mapk wrote: »

Planning to see how the VLS fund does over the next year and perhaps switch to the L&G MI5. Is there any sense in holding the two simultaneously? I think they're both offered on the AXA platform which I'm currently using - although I plan to move in 10 months, perhaps to Charles Stanley.

VLS funds aren't available on AXA Self Investor - at least for me, they're not?

The upside to holding both would be some protection against one fund or the other being mis-managed and deviating from the indexes they're trying to track. Also, the MI5 has Property within it, which the VLS doesn't.

The only downside I can see to holding both is the potential for transfer charges, especially as you're already eyeing a move from AXA when their platform fee-free period runs out. I don't think AXA charge exit fees, but some providers charge fees per fund being transferred in/out.

Pincher

Damage wrote: »

I'm seriously considering excluding premature death from my investment strategy!

This is fine for a person with no dependents.


With a background in engineering, I can't help but put in backup mechanisms.


If you have wife and kids, some insurance would be good.


I just cancelled a life insurance, after about 17 years. The premium was about £130 a year, level through the term, but the pay out if I had died was £100k, reducing slowly to match a typical repayment mortgage's remainder balance. If I had died early, a really good deal. I actually wish I had signed up for £200k initially.


In the 1970s, the endowment policy with life insurance pay out if you die was a sweet deal. You got tax relief on the premium, so it was an excellent savings vehicle. A ten year policy that matured in the early 80s had perfectly respectable returns. A shame they had to abuse it so much that it disappeared in disgrace.

Damage

Luckily (or sadly) I haven't got any dependants, so I only have myself to worry about at the moment.

mapk

arbster wrote: »

VLS funds aren't available on AXA Self Investor - at least for me, they're not?


The upside to holding both would be some protection against one fund or the other being mis-managed and deviating from the indexes they're trying to track. Also, the MI5 has Property within it, which the VLS doesn't.


The only downside I can see to holding both is the potential for transfer charges, especially as you're already eyeing a move from AXA when their platform fee-free period runs out. I don't think AXA charge exit fees, but some providers charge fees per fund being transferred in/out.

You're absolutely right, I meant to type Fidelity! (I was just looking at a previous post you'd made about AXA and VLS) I was initially going to go with AXA, but was swayed by the access to VLS elsewhere.

One of the features which attracts me to the MI5 - seemingly a little more fully diversified.

I went with Fidelity in part because of their opening incentives and to road test an S&S ISA, see how I get on. With hindsight, it might have been better to adopt a longer-term strategy rather than shifting after a year. I'll see what the platform fees are like elsewhere in 10 months time.

mapk

Sorry Arbster, I messed up the formatting above! Corrected now

DominicH

Damage wrote: »

Another study (1981 to 2003) showed that to miss the ten best days of trading means that you miss out on 40% of the returns.

I'm always a bit wary of factoids like that, because they fail to mention that many of the biggest falls occur at about the same time as the biggest rises. OK, if you were out of the market on 13th October 2008 you would have missed the biggest ever one-day percentage rise in the Dow. But you would probably also have been out of the market on the 9th and 15th, which had some of the biggest falls ever recorded.

I'm not saying that you should try to time the market, just that the penalty for doing so may not be as dramatic as that 40% figure.

Damage

I think those figures are referring to missed gains rather than losses, but I suppose a missed gain can be an effective loss, if indeed those gains are required in order to exceed the performance of the passive index tracking alternative.

I'm currently regretting my stocks and shares ISA choice, which I made before I started reading up on all this. If I can get out of it with minimal losses and keep my ISA in cash for the moment, then I'll probably do that. That's another thing I have no idea how to do, so I need to read up on how to do that as well.