One more IT for this years ISA...

economic

Audaxer wrote: »

It could have a impact on returns in a negative way, but it could also have a positive impact if there is a bigger correction of at least 30% within the next few years, as seems quite possible. For someone investing in a 100% equity portfolio, investing a lump sum each tax year to fill their ISA allowance doesn't seem to me such a bad plan.

Sure you just outlined one possible scenario in a world of near infinite number of scenarios for his portfolio returns. What if in your scenario of a 30% drop in a few years occurred after say a 40% rally in stocks? You would still be better off fully invested now.

you are not really adding anything new or insightful, nor am i. I was just trying to find out the OPs reasoning for waiting for each tax year as it seems he may not know about "bedding". Historically it seems like a bad idea to time the market or drip feed over such a long period. But of course it could turn out to be a good idea, who knows?

I think the key to all this is the OPs age and other personal circumstances such as if the cash may be needed potentially for a purchase in which case it may make sense to not have everything invested.

economic

rathernot wrote: »

Candidly because it makes me think and smooths the journey out in my view.

Sticking 12.5% of this years allowance in Shin Nippon isn't something I need to give too much thought.

Doing the same with 12.5% of what I have in reserve would be a big deal and then I'd be spending my life agonising over allocation percentages.

So it's a psychological thing I guess

Question 1: Why was this cash not invested and instead left to build up? Not trying to be mean but answering this question will give insight into risk tolerance or something else.

Question 2: How old are you and what is your plan for the money you invested and the cash reserve which you will drip feed over many years presumably?

rathernot

bowlhead99 wrote: »

Let's say the expected return over the long term of a 100% equities investment trust is 5% in excess of the return on cash.

So the added value of investing £2500 a month early is £2500 x 5% X 1/12 is £10.42

You could argue with the assumption of cash+5% but there's more than a month until 6 April so the implied return on investment now rather than keeping it as cash until you can roll it into a deal with something else from next year's ISA allowance is comfortably £15+, more than a typical dealing fee. No compelling reason to hold off. Even splitting the money into two holdings is not going to break the bank.

As to investment choices:

Harbourvest Global Private Equity HVPE: good generalist international exposure to investments which aren't on the public markets

Scottish Oriental Investment Trust SST: helps to fix the current underweight in Asia ex Japan, fits with appetite for smaller companies, current discount level is not unreasonable

Both are completely different types of funds so just split the money between the two, or do one now and one in next tax year.


That doesn't make any sense. Their track record of past performance is the only reason to hold it. I hold it.


A decent fund too. But you probably don't need that and two other global public equities funds like LT and Fundsmith. It's holdings are somewhat different to either of them and it is another high conviction one. If you pick it up, perhaps you could drop one of the other two, IMHO.

I'm constrained for this year by who Fidelity offer and their list isn't too exciting

rathernot

economic wrote: »

Question 1: Why was this cash not invested and instead left to build up? Not trying to be mean but answering this question will give insight into risk tolerance or something else.

Question 2: How old are you and what is your plan for the money you invested and the cash reserve which you will drip feed over many years presumably?

Answer 1: Because I've been lazy, simple as that.

Answer 2: Late 30's debt free and the plan is to leave it there for the long term. I have some cash in an old cash ISA so by April 7th there could be around £55k in there which I'm quite content adding to at the ISA allowance rate.

forextc

That doesn't make any sense. Their track record of past performance is the only reason to hold it. I hold it.

This fund contains HY shares, inflation linked bond, gold and high cash weightings. These haven't done well in (recent) past performance which is why I said not to judge it on the past performance most are likely to compare it over - 3,5,10 years. This is of course why my quote makes absolute sense.

As the OP has so far only picked trusts that focus on growth Personal Assets might provide some balance if the market turns down. Of course no one is interested in such investments until the market does turn down, by which time it is of course, too late.

Another option might be the Ruffer investment company. Check out it's performance in 2008 when it went up over 20% in the financial crisis.

bostonerimus

rathernot wrote: »

Candidly because it makes me think and smooths the journey out in my view.

Sticking 12.5% of this years allowance in Shin Nippon isn't something I need to give too much thought.

Doing the same with 12.5% of what I have in reserve would be a big deal and then I'd be spending my life agonising over allocation percentages.

So it's a psychological thing I guess

Are you open to investments other than ITs?

rathernot

bostonerimus wrote: »

Are you open to investments other than ITs?

I'm certainly open to then but so far I'm leaning towards ITs.

I know opinions vary so I'm basing that off the weight of opinion I've read than saying they're definitely "better".

economic

rathernot wrote: »

Answer 1: Because I've been lazy, simple as that.

Answer 2: Late 30's debt free and the plan is to leave it there for the long term. I have some cash in an old cash ISA so by April 7th there could be around £55k in there which I'm quite content adding to at the ISA allowance rate.

Then i would just invest it all in one go. If you don't like the idea (which is understandable given how much stocks have risen over the years), then maybe drip feed over a shorter period say a year by utlising a general investment account. Specially if you have the 55k cash isa maturing.

It depends on your risk tolerance - in simple terms whether you would get scared by a large drop soon after investing and decide to sell out at a loss, or not.

bostonerimus

rathernot wrote: »

I'm certainly open to then but so far I'm leaning towards ITs.

I know opinions vary so I'm basing that off the weight of opinion I've read than saying they're definitely "better".

So why do you own open ended funds like Fundsmith if you think ITs are better? Are you looking at ITs for particular sectors or just looking to increase your closed end vs open ended holdings?

rathernot

bostonerimus wrote: »

So why do you own open ended funds like Fundsmith if you think ITs are better?

Because I like Terry Smith's approach and it's only available as a fund.

Lindsell Train offer an IT but I'm not paying the huge premium.