Investing for the long term

Nudge3

Hi all,
I have 5k I would like to invest for the long term. I am 32 and would like to put the sum away for at least the next 20 years, maybe more. I am willing to take some risk and I could add to this pot regularly every month. What would you guys do in my shoes? All opinions are welcome.

Thank you

BLB53

I would possibly go for Vanguard Lifestrategy 80 in an ISA with Vanguard Investor.

eskbanker

Regardless of what you actually invest in, you might wish to consider using a SIPP (accessible in 23 years at 55) and/or a Lifetime ISA (access at 60 but capped at £4K/year contributions) as your wrapper, in order to benefit from extra tax/bonus advantages over and above natural investment growth, in return for committing to delayed access....

Nudge3

BLB53 wrote: »

I would possibly go for Vanguard Lifestrategy 80 in an ISA with Vanguard Investor.

Thank you, I was interested in the Vanguard LifeStrategy 100. I know it's higher risk but also higher returns over the long term. What do you think?

Voyager2002

Nudge3 wrote: »

Thank you, I was interested in the Vanguard LifeStrategy 100. I know it's higher risk but also higher returns over the long term. What do you think?

A big yes from me, since I think that investment-grade bonds are a bad idea at a time when interest rates are low. (People usually divide their investment between shares, which are risky but have growth potential, and bonds, seen as safer, but I think that interest rates increase the risks that bonds pose.)

Nudge3

eskbanker wrote: »

Regardless of what you actually invest in, you might wish to consider using a SIPP (accessible in 23 years at 55) and/or a Lifetime ISA (access at 60 but capped at £4K/year contributions) as your wrapper, in order to benefit from extra tax/bonus advantages over and above natural investment growth, in return for committing to delayed access....

Would that mean the money would be locked away for a minimum term of 23 years without being able to access even if I wanted to?

A_T

Nudge3 wrote: »

Thank you, I was interested in the Vanguard LifeStrategy 100. I know it's higher risk but also higher returns over the long term. What do you think?

Vanguard LifeStrategy 100 fund has a large bias to the FTSE 100 - so I would only choose this fund if I believed this index will outperform. There's Vanguard FTSE Global All Cap Index fund which attempts to mirror the global stock market with no regional bias. I can understand why people use LifeStrategy 20/40/60/80 funds but I have no idea why someone would want to use the 100.

Nudge3

Voyager2002 wrote: »

A big yes from me, since I think that investment-grade bonds are a bad idea at a time when interest rates are low. (People usually divide their investment between shares, which are risky but have growth potential, and bonds, seen as safer, but I think that interest rates increase the risks that bonds pose.)

Thank you for the BIG YES

BLB53

Thank you, I was interested in the Vanguard LifeStrategy 100. I know it's higher risk but also higher returns over the long term. What do you think?

If you can handle the additional volatility from the 100% equities, fine but until you know how you might react to a market downturn, you may find the VLS80 easier to stay with for the long term and the returns are not much lower than the 100.

Start off a little more cautious and step up your monthly contributions after a year or two if you are OK with the ups and downs of the 80 would be my advice fwiw.

Prism

Nudge3 wrote: »

Hi all,
What would you guys do in my shoes? All opinions are welcome.

Thank you

If I was in your shoes I would invest it in a good quality active global fund like Fundsmith or Lindsell train but a global all cap tracker is fine too

Audaxer

Nudge3 wrote: »

Would that mean the money would be locked away for a minimum term of 23 years without being able to access even if I wanted to?

Yes, but you said you didn't want access to it for at least 20 years. Any money you put into a SIPP, up to the amount of your earnings less any other pension contributions, has 25% added in tax relief from HMRC. So if you put in £5k, within a couple of months HMRC will put in an extra £1,250. So you can't really lose, providing it is money you don't need to access for the next 23 years. In fact it may be 25 years as I think there are plans to maybe raise the age from 55 to 57 in a few years time.