New to investing - making the final step!

b80_2

Hi all

After reading a few books recently (including How to an the world Nd investing demistified) , the spending hours and hours reading forums I feel I'm almost ready to take the plunge into the world of investing, however I'm suffering from a bit of paralysis through analysis!

I'm aware that with the current low interest rate situation our savings are slowly being gobbled up by inflation so I'm looking to try preserve a gain a little over the long term.

Im in a fortunate position where we have saved a fair amount of cash (for us) over the last few years. I'm looking at startingvoff with a maximum growth strategy by investing into the 100 vls. I'm aware this is classed as high risk. The plans are not touch anything we put into investments for at least 20-30 years. Ignoring risk and sleepless nights factor, 100% equity investment has historically delivered more profit over the long term, right? I'm now in my late 30's and depending on the economic landscape in 20 years, if probably be looking to increase safer assets such as bonds.

The intention is to put 20k into an isa each year and not touch this regardless of any crashes that come along. One of my main hesitations though is when to start investing... Should I wait until brexit is out of the way, or not time the market and just get on with. Reading posts on here over the last few years the crash was always due in 2015, 2016, 2017 but still the markets have grown.

I'm limited to brokers i can use - best % based is self trade and alliance trust for flat fee. Once I hit 40k alliance yearly fees are the same as self trade - 120, but alliance charges 9.99 per trade (1 trade free per quartet). If I just purchased vl100 and deposited once a month with selftrade, my only fees would be 0.22 for vls and 0.3 up to 50k right -nothing I'm missing here? For alliance it would 120 platform per year, 0.22 for vls each year and the one free trade a quarter + 9.99 if I deposited more frequently than that? Is that it as far as fees go?

Also if I invest 20k into my yearly isa and choose the accumulation option for dividends, would the dividend yield take my over 20k allowance into the taxable zone? Would I be better off investing 19k so not to exceed isa limit?

Many thanks on advance

Eco_Miser

Last point first, the £20k ISA allowance is what you put in - all growth and dividend reinvestment (whether via acc units or re-investing the dividends from inc units) happen with the ISA, so don't count.

Yes, historically, shares (and funds of shares) usually return more than bonds (and bond funds).

The next crash is always just around the corner, and so is the next boom, so form your own opinion.

I'm limited to brokers i can use

Why?

b80_2

Thanks for response. My employers are a large investment bank and so compliance rules state we can only use certain brokers for investments, sadly.

badger09

@Eco Miser: OP may be restricted to brokers authorised by his Compliance officer, if for example, he/she works for an investment bank or other financial company.

OP have a look at SnowMan's excellent spreadsheet for cost comparisons - link in 1st post


https://forums.moneysavingexpert.com/discussion/5583030

badger09

badger09 wrote: »

@Eco Miser: OP may be restricted to brokers authorised by his Compliance officer, if for example, he/she works for an investment bank or other financial company.

b80 wrote: »

Thanks for response. My employers are a large investment bank and so compliance rules state we can only use certain brokers for investments, sadly.

badger09 hits nail on head:rotfl::rotfl:

Hadn't seen OP's post when I posted.

greenglide

Should I wait until brexit is out of the way, or not time the market and just get on with.

What if it is never over?

You should be investing globally. So far as the rest of the world is concerned whatever mess we make because of BREXIT is of no great interest, the rest of the world will contiue, we will ............

So start now and try to steer clear of a bias to the UK.

b80_2

Here's the current country diversification in vls100. I may be totally wrong but isn't there a slight advantage to home bias if the pound is weakened? Are there other all in ones that are also worth considering over vls100?
United States 40.33%
United Kingdom 22.97%
Japan 6.76%
Switzerland 2.72%
Germany 2.70%
France 2.61%
Direct Property and REITs 2.36%
Australia 1.87%
Hong Kong 1.63%
Ireland 1.46

badger09

b80 wrote: »

Here's the current country diversification in vls100. I may be totally wrong but isn't there a slight advantage to home bias if the pound is weakened? Are there other all in ones that are also worth considering over vls100?
United States 40.33%
United Kingdom 22.97%
Japan 6.76%
Switzerland 2.72%
Germany 2.70%
France 2.61%
Direct Property and REITs 2.36%
Australia 1.87%
Hong Kong 1.63%
Ireland 1.46

Legal & General Multi Index, Blackrock Consensus

Eco_Miser

badger09 wrote: »

@Eco Miser: OP may be restricted to brokers authorised by his Compliance officer, if for example, he/she works for an investment bank or other financial company.

Indeed, and having asked the question, there's no longer need to speculate.

b80 wrote: »

I may be totally wrong but isn't there a slight advantage to home bias if the pound is weakened?

When Brexit won, the pound weakened, and foreign share prices and dividends in GBP went up.

jimjames

b80 wrote: »

Here's the current country diversification in vls100. I may be totally wrong but isn't there a slight advantage to home bias if the pound is weakened?

Isn't it the opposite? Overseas have done better than sterling markets with the pound weaker, many up 20% or so purely from the drop in sterling

bostonerimus

100% equities will be volatile, you might think about reducing that by including a bond index.