Bad time to invest ISA Allowance with high Footsie?

ivormonee

Putting all your money into equities whilst in your mid seventies seems a bit extreme. But why would you even be wanting to invest in risky assets at that age? If you really are that keen to invest then I'd say plump for something a bit more balanced at least to even out the risk a bit. A mixed fund such as Vanguard LifeStrategy would probably serve you better than going all in into the FTSE100. And taking your age into account I'd say the Vanguard LifeStrategy 20 or 40 would be the better choices.

Alternatively, if you are just keen to use your ISA allowance, then actually you could just do so with a cash ISA rather than a S&S ISA, although in this scenario your returns will be meagre given current rates.

Superscrooge

aroominyork wrote: »

When I was a kid my Dad quoted "sell in May and go away". On this site you I only seem to see "buy and don't try to time the market", not even taking into account the OP's comment about his age.

'Sell in May and Go Away' has been back-tested and found to be a poor investment strategy.

https://www.fool.co.uk/investing/2016/04/20/youd-be-mad-to-sell-in-may-and-go-away/

However, not trying to time the market is good advice. Throughout the last few years there have been people posting on the forum about cashing in their investments because they were predicting an imminent stock market crash, whereas we have had several years of rising stock markets.

If the OP is concerned about investing a £20k lump sum in a S&S ISA. Perhaps invest £10k now and £10k in March?

jimjames

ivormonee wrote: »

Putting all your money into equities whilst in your mid seventies seems a bit extreme. But why would you even be wanting to invest in risky assets at that age? If you really are that keen to invest then I'd say plump for something a bit more balanced at least to even out the risk a bit. A mixed fund such as Vanguard LifeStrategy would probably serve you better than going all in into the FTSE100. And taking your age into account I'd say the Vanguard LifeStrategy 20 or 40 would be the better choices.

Why not invest if you're comfortable with the risk? Maybe they want a better income - that isn't dependent on the capital value. Even age 70 you could have 20 years or more that you need to have income for and want to grow it.
Some people say that if you're over 70 then you have less time for asset prices to recover but to be blunt if you die before they recover you wouldn't care. In the meantime your income is likely to have carried on growing - some investment trusts have grown income for over 50 years.

Voyager2002

Primrose wrote: »

Normally invest my full ISA Allowance at the beginning of the tax year but couldn,t do so until now when the FOOTSIE has closed the year at its high level.
Do I just take a punt and go for it , or take out a cash ISA temporarily to use the allowance rather than lose it, and transfer to equities later. With a bigger iSA Allowance now, there,s rather more to risk losing than previously and in mid seventies time may not be on my side so easily now.

The FT100 would be a very bad choice for most private investors... It is easy to find something that is low at the moment and might (or might not) recover: personally I have bet a lot on Russian equity and that looks like a bargain now! A rather less risky approach is to choose a fund that follows a 'value investing' strategy on a global basis. Plenty out there.

Keep_pedalling

A_T wrote: »

Just out of interest where does the 20K suddenly appear from? What's it been doing in the meantime?

In my case it’s been sitting in a general investment account. For the last 7 years each April has been a time for rebalancing, cashing in capital gains and moving some of those gains into ISAs. Have never tried to time the market, just invest in similar funds in the ISA that the money was originally sitting in the GIA accounts.

Primrose

And in my case the money has been in 65+ NS&I bonds which are due to mature in late January.

capital0ne

A_T wrote: »

Just out of interest where does the 20K suddenly appear from? What's it been doing in the meantime?

I'm retired with a part time job that pays £20k/yr so I drip feed this into a global equity ETF and a developed world property ETF, come April 6th it moves into my ISA portfolio - simples

My pension pays for all my day to day year to year needs

capital0ne

Primrose wrote: »

And in my case the money has been in 65+ NS&I bonds which are due to mature in late January.

Ditto - it's rolling over into 2.2% 3yr bond

Primrose

Did consider them but decided that another government may well decide to reduce the now generous annual ISA Allowance so deciding on balance its better to take a chance and take advantage of it while it still exists.