Toe In the Water

orlaflutter

:hello: First post from an ignoramus who hasn't yet started investing and is psyching up to it. Please be gentle with me!
Have been reading Moneywise and similar mags, and this forum and still don't feel confident other than to open a s&s isa and put around £50 per month in a multi-asset global fund like HSBC or similar. (Too chicken to risk more at this stage)

I'm 60 though, and so realise that with the time available to me this isn't going to do a fat lot, so I'm asking if it's worth putting in, say £5000 to kick-start it, in addition to the regular drip-feed (which I gather is The Right way To Do It) as I'm looking to leave it there for 5-7 years to see what happens.
OH has always dealt with finances and is super-risk-averse ( B.Soc, Premium Bonds and cash ISAs only) but I now have some of my own funds to play with and want to try something else.

One other thing: not sure I can justify an IFA but what do people on here think of Robo-advisers, if it isn't a rude question?

tacpot12

I've yet to find a robo-advisor that is any use at all. For the sums involved an IFA would be inappropriate. If you can't afford to lose half your money, you shouldn't be investing at all.

If you have some cash savings to cover emergencies and large planned spends, I don't think you should be too worried about putting away more than £50 per month. If you have £5000 to spare, why not decide to put away £200 per month for the next two years to get the benefit of pound-cost averaging. I wouldn't be in a hurry to lose or to make money.

Alexland

Welcome to the forum,

We have tried many robos, for various cashback incentives, and have yet to find any that justify the higher charges when compared to using a platform to hold a good low cost multi asset fund (or diversified global equities fund for those seeking 100% equities risk).

If you are just starting out consider Vanguard LifeStrategy in a Vanguard Investor ISA wrapper.

https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products
https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-isa

There is a big difference in the volatility you will experience between investing a £5k lump sum and £50 per month. If your partner is cautious maybe start with a smaller initial contribution and a higher regular contribution and hopefully you won't get into a situation where you see losses that cause you to lose sleep at night. Remember if the market drops your future contributions are getting better value!

Alex.

kidmugsy

Allocating is a matter of guesswork. Probably it is wisest to go for diversified trackers from Vanguard or HSBC or L&G ... Perhaps you should back it up with some gold and commodities. Who knows?

However avoiding tax needn't be a matter of guesswork. Do you intend to use a pension or ISA as a tax "wrapper"?

For OH you might like to try the argument "I'm just trying to diversify our portfolio, dear."

orlaflutter

Many thanks both for thoughts so far. Am like a rabbit in the headlights at the mo as not sure what I am aiming for - I see people on here being asked what is their goal/strategy and beyond growing our money, I don't really know.
Bearing age in mind (early + mid 60s) I gather I should be looking towards income but being naturally cautious have been looking at income+ growth with 'balanced' attitude to risk. Most other savings are very safe; am debt-free and house paid for - am really just trying something with a few thousand spare. (Have +/- £38K in individual shares which pay dividends to help with bills, and although some are a waste of time, OH has vetoed cashing them in)

Will look at the vanguard sites indicated - many thanks - I know they are well thought of, but before taking the plunge was investigating Charles Stanley Direct as another option)
I know I need to open a S&S ISA but am a little confused as the platforms like CSD seem to recommend their ready-made portfolios rather than choosing your own funds.
In your opinion, is it better to plump for one of these ready-mades when I freely admit I don't really know what I'm doing? Daren't risk an actively managed fund (yet) until I've seen what can be achieved with a tracker.

orlaflutter

Kidmugsy - I was thinking S+S ISA. Not sure whether SIPP do-able (or useful) at my age, given that I'm newly in receipt of an NHS pension and HMG has already given me the tax relief once. I know you can pay into a SIPP up to 74.

cloud_dog

What is your income situation, specifically taxable income for yourself now and with state pension?

orlaflutter

cloud_dog wrote: »

What is your income situation, specifically taxable income for yourself now and with state pension?

Joint or just mine?
I'm officially retired although I left work 2 yrs early due to a move and doing a further degree and so lived on husband's pension(s). Have started some private music teaching which is currently generating a tiny income of about £240 a month (hoping it grows!) and NHS pension of around £550 per month.
OH's pensions bring in about £21K annually and current investments yield about £2000 a year.
I won't get my state pension for another 6 years.

cloud_dog

So you are currently approx £2400 under your personal tax allowance (£11850 2018/19).

You may want to consider making use of the SIPP option (as mentioned), gaining the free 25%, possibly leaving it as cash and making withdrawals. Just a thought)

Alexland

orlaflutter wrote: »

Have +/- £38K in individual shares

That was a surprise you guys are far from just starting out!

Holding individual company shares is much higher risk than owning a low cost well diversified global equity or mixed asset fund. Now we know that then I don't see a problem with investing the £5k upfront as you guys would probably be used to the volatility that comes with owning shares and a mainstream fund would probably be a smoother ride anyway. Provided you won't need to access the money for at least 5 years or preferably longer.

I hear that Charles Stanley Direct are a good platform but I wouldn't go for their expensive own brand funds which charge at least 4x the fee of the equivalent Vanguard, HSBC or Blackrock funds.

Alex

orlaflutter

Alexland, the shares weren't really bought consciously as investments; the major ones were offered 2for1 by the company OH worked for before redundancy, so most employees just filled their boots, so to speak. We were fairly young and skint so couldn't afford many, but they've done ok. The rest were either inherited from deceased parents or bought by the handful when floated. E.g Lloyds, Kingston Comms etc.
I will keep suggesting that we shed some of the useless ones but I don't think they'd realise more than a couple of hundred.
Thanks for the advice about the CSD funds; I'm a bit confused about charges so need to study the blurb a bit more.
Also chewing over the SIPP thing....