Advice for a dithering clueless dummy.

copthis1

I have posted a while ago, but have done zero toward doing anything at all financially.

I am 51 years old (yesterday) and have £70,000 in a Virgin cash ISA. I have woken up and realised I need to make my money work harder. I want to invest say £40,000 for 5 - 10 years or possibly longer if things don't change to much in my life.

I read hundreds of comments and see various funds/investments mentioned. The ones that get mentioned commonly are Vanguard VLS60 or 80 and SMT.

Is it worth putting some in these products? any suggestions would be welcome.

barginfinder

its definitely and option to open a vanguard S&S ISA (cheap annual fee) and put the 40K (as a transfer) into VLS60 or 80 - these appear to be good value long term fire and forget investments for the 5 years or more (longer the better) investor - but there is so much choice out there, but this is a good option

eskbanker

On the basis that rule #1 of investing is only to invest for the long term with money you're not going to need in the short term, then rule #2 is to diversify to manage your risk.

This is why inexperienced investors are typically recommended to use low-cost funds that spread investments across asset classes, sectors and geographies - Vanguard's LifeStrategy range is indeed a popular choice but others are available from the likes of L&G Multi-Index, BlackRock Consensus and HSBC Global Strategy.

SMT is a much more niche investment so not worth considering for you at this stage IMHO.

Start off reading introductory articles at the likes of Monevator, Motley Fool and HL, or even the investment section on here (whose weaknesses are adequately compensated for in other pieces!).

copthis1

Thanks for replies.

My wife has L&G Multi Index 7.

What are the positives/negatives of the SMT?

Alexland

Keep it simple and just open a Vanguard ISA and use the Vanguard Life Strategy 60 or 80 funds (or maybe half in each if unsure). Then go take your family out to dinner knowing you have made a good decision. As you get closer to needing to withdraw the money reduce the risk by transfering back to cash gradually.

BLB53

What are the positives/negatives of the SMT?

This recent article on DIY Investor should give you an idea
http://diyinvestoruk.blogspot.co.uk/2017/05/scottish-mortgage-trust-final-results.html
The trust has done well over recent years but it can be very volatile so be prepared for a rollercoaster ride if you decide to buy. It is currently close to its all-time high so may go down in the short term but could be a good investment over the next 10 years.

For a much smoother ride you will be better off with the VLS 60.

bostonerimus

Pay off all your debt other than the mortgage
Put enough in the bank to cover 6 months of spending.
If you don't have a work place pension look into funding a personal pension.
Fund an ISA and a regular investment account
Invest in low cost diversified equity and bond tracker funds, VLS60 etc would fit the bill, but there are many other options. Avoid actively manage funds like SMT

Drp8713

bostonerimus wrote: »

Avoid actively manage funds like SMT

VLS100 charges 0.22%, SMT 0.44%, see below how that extra 0.2% can damage your returns:

Cumulative performance
Investment 3 months 6 months 1 year 3 years 5 years
Vanguard LifeStrategy 100% Equity A Acc 1.09% 3.85% 16.89% 45.5% 92.93%
Scottish Mortgage Investment Trust PLC 6.34% 21.6% 39.22% 92.07% 229.26%

ViolaLass

Drp8713 wrote: »

VLS100 charges 0.22%, SMT 0.44%, see below how that extra 0.2% can damage your returns:

Cumulative performance
Investment 3 months 6 months 1 year 3 years 5 years
Vanguard LifeStrategy 100% Equity A Acc 1.09% 3.85% 16.89% 45.5% 92.93%
Scottish Mortgage Investment Trust PLC 6.34% 21.6% 39.22% 92.07% 229.26%

Do they invest in the same things? Because if not, these numbers do not show the effect of the extra fee.

In fact, SMT looks like a better bet based on these figures.

Edit: oops, were you being sarcastic?

Drp8713

ViolaLass wrote: »

Do they invest in the same things? Because if not, these numbers do not show the effect of the extra fee.

In fact, SMT looks like a better bet based on these figures.

Edit: oops, were you being sarcastic?

Yes, apologies, I was indeed being sarcastic.

SMT has by far outperformed VLS as you can see. We have some passive investment evangelicals here who will tell you dont pay active fees because they are not worth it, but that is not always the case.

I have a passive global equity fund for my work AVC because it is the best option available, and my wife and son have Blackrock Consensus funds in their SIPP and JISA respectively because they are sensible options for small investments.

All our other investments are active and I hold SMT in my ISA as does my son in his trust.

Safe to say some of our actives have outperformed the passives and some have not, in our case the actives are way ahead.

Just trying to point out that holding a mix of actives and passives is perfectly sensible and bias to either side wont always make you better off.

copthis1

Drp8713 wrote: »

Yes, apologies, I was indeed being sarcastic.

SMT has by far outperformed VLS as you can see. We have some passive investment evangelicals here who will tell you dont pay active fees because they are not worth it, but that is not always the case.

I have a passive global equity fund for my work AVC because it is the best option available, and my wife and son have Blackrock Consensus funds in their SIPP and JISA respectively because they are sensible options for small investments.

All our other investments are active and I hold SMT in my ISA as does my son in his trust.

Safe to say some of our actives have outperformed the passives and some have not, in our case the actives are way ahead.

Just trying to point out that holding a mix of actives and passives is perfectly sensible and bias to either side wont always make you better off.

So shall I put some in SMT and some in VLS?