Best time to invest in Vanguard Funds

Cactus_Jack

Hi OP.

You could either put the lump sum in now, or cost average and feed in a few grand per month. The truth is, that nobody knows where the market is going next. But don't let this put you off. A wise quote I have heard, is that the biggest risk of the stock market, is not being in it.

Sometimes the replies in this forum to new people asking questions, I think, could be re-thought to be less harsh and intensely questioning. People will be put off investing at all with this approach!

Alexland

I agree with the others that its better to be invested in the market but yes asset prices are not cheap (relative to their return) at the moment and global interest rates are rising so apply caution when considering your portfolio ratios. Get in the water but don't be a hero - this might be a period to play it slightly safer. But at the same time don't go too heavy on bonds as they are offering an almost return free risk at the moment.

Personally with a 20+ year investment horizon I am 70% equities, 20% bonds and 10% cash. If the markets stay positive I will still get a good result and if not then my cash and future contributions will be buying low.

Alex.

bcfclee27

Alexland wrote: »

I agree with the others that its better to be invested in the market but yes asset prices are not cheap (relative to their return) at the moment and global interest rates are rising so apply caution when considering your portfolio ratios. Get in the water but don't be a hero - this might be a period to play it slightly safer. But at the same time don't go too heavy on bonds as they are offering an almost return free risk at the moment.

Personally with a 20+ year investment horizon I am 70% equities, 20% bonds and 10% cash. If the markets stay positive I will still get a good result and if not then my cash and future contributions will be buying low.

Alex.

Seems to be no obvious play at the moment.

Cash = pointless (eroded by inflation)
Bonds = pointless (risk of losing money with no return)
Equities = very expensive but still best of the 3 options.

I suppose if mortgage interest rates were higher that would be worth paying down.

Even if you put all your S&S ISAs into cash with the plan of jumping all back in on a correction or crash it still may not come for years.....

TBC15

orlaflutter wrote: »

Really? would you explain why you think so, because I was going to set this up myself for a similar period, thinking it was a good thing to do.

With the time frame, in my opinion you could afford to be more adventurous. But each unto their own.

Terry_Towelling

bcfclee27 wrote: »

I suppose if mortgage interest rates were higher that would be worth paying down.

Don't be so quick to dismiss this as part of an overall strategy. Any overpayment has an impact on the amount of interest incurred for the entire period of the mortgage. E.G a single £1000 overpayment on a rate of, say, 2% with 20 years left to pay will save you £20 in the first year and the saving will then continue to compound for the rest of the 20-year term. If you are typical of many who are on a low rate for a few years, then the compounding effect of the savings becomes ever greater after the discounted rate has ended. Sometimes it can be worthwhile servicing more debt at a lower rate so there is less debt to service when the rate goes up.

I'm not suggesting you throw the lot at your mortgage because I know nothing about it (or your circumstances) but as part of a balanced overall strategy there might be some benefit to be had from overpaying some of it.

To once again draw on the wisdom of another contributor to the forum (still can't remember who) if you had no mortgage and wanted to make a £40K stock market investment would you be happy to take out a £40K mortgage to fund it? How you answer that question will tell you much about your attitude to risk and debt and may give you a steer towards what you really want to do.