Lisa and pension getting me down

Alexland

I haven't seen Nutmeg publish any proper analysis to suggest that their 0.75% managed portfolios perform any better than their 0.45% fixed allocation portfolios. If it's all marginal why pay almost double? It's an easy change. Costs are really important when market returns are low.

Sure you can switch to any new provider that accepts inbound LISA transfers. Providers that cap their fee (such as AJ Bell) are attractive when your account valuation is high enough that the capped fee is lower than the percentage fee you would pay with an uncapped platform. But it's not that simple as capped fee platforms tend to charge trade fees on assets where fees are capped. It can still work out cheaper if the balance is high enough. Probably at around £20k or 4 years of contributions. LISAs aren't that old yet.

Alex

Lcwonder

I just thought because markets are volatile that having someone to stop a lose might be better but will look into it a bit more after a year. It is a reason I didn’t save earlier because of the fees I’m just hoping that some of the free money the government gave me is still there after 25+ years

AnotherJoe

Lcwonder wrote: »

I just mean they as in ‘financial advisors’ in papers when ever they said try and beat inflation by buying shares
I literally meant shares as in shares I’m a bit dyslexic

So if you mean shares and not funds then most here would not recommend that for reasons of too many eggs in one basket.
However if you are confusing the two and actually have funds then what works best for you at the moment, counter intuitively, is for the funds to be a low price and even falling.
Reason is quite simple, you will be buying for say 30 years. What works best for you then isa low "fund" price (I'll come back to shares in a minute) because eventually as long as you've bought general stock market globally invested funds they will in the long term go up and so you'll be better off if you spend a small long as possible buying them whilst they were cheap.
Now, if you really bought shares, let's say shares in BT or BP or whoever, well individual companies can and do go bust. So that's a risky business.
Are you able to say what it was you bought and are buying?

Thrugelmir

Stubod wrote: »

We went with a new IFA 2 years ago who advised their "medium risk" investments generally returned 6% - 8% pa.

Historical long term averages based on over 100 years of data are great. Trouble is in between prices can be volatile. Statistically you could potentially need to hold the investments and reinvest the income for a minimum of 12 years to produce such a positive return.

Lcwonder

I’m invested in funds which I guess by shares my pension is with legal and general uk equity based and my shares as in funds are with nutmeg

Alexland

Lcwonder wrote: »

I just thought because markets are volatile that having someone to stop a lose might be better but will look into it a bit more after a year.

Most of the analysis suggests that humans (even professionals) attempting this would damage customer returns and the Nutmeg investment team are clued up enough to generally leave the investments alone even if you are paying the higher fee. Apparently some of the most successful long term investment accounts belong to dead people who are not tempted to fiddle around and make changes in reaction to market noise.

Alex

dunstonh

Invest in shares they said you’ll get a better return they said I just seem to keep losing money.

Most people should not invest in shares. They dont have the knowledge and understanding and should stick with funds instead. Having funds that invest in shares is fine.

2018 was a negative year. The first negative calender year since 2008. Although there have been a couple of larger negative periods since 2008 but did not create negative calender years as they recovered in time.

So I’m saving for my retirement I put 300 into my private pension and with tax relief that’s 375

You mean you are putting £375 into the pension and that costs you £300 due to tax relief. Its a relief, not a bonus.

but all my free money seems to be disappearing on the stock market

A small loss over the last year would be in the ballpark but a loss the level you are suggesting sounds like you are doing something wrong.

just mean they as in ‘financial advisors’ in papers when ever they said try and beat inflation by buying shares

It is rare for any financial adviser to say you should invest in share. The media often dont ask financial advisers. They usually ask higher profile fund managers or unqualified individuals with a high media profile. Often, the media recommends products/investments from their advertisers.

Nutmeg is where my Lisa is

Nutmeg does not allow the holding of shares. It uses a collection of funds. Its not a great option but its not a bad one either. Its simple and I am surprised you are seeing a large loss as you suggest. A little loss over the last year would be about right but nothing more than that.

AnotherJoe

Lcwonder wrote: »

I’m invested in funds which I guess by shares my pension is with legal and general uk equity based and my shares as in funds are with nutmeg

These are funds. Not shares. Might seem trivial but a big difference. Not sure there's a good analogy, so just keep it clear as otherwise people will draw the wrong conclusion as to what you are doing.
So, you most likely are invested in some dull medium risk funds. I suggest you take the time to find out exactly what they are. In any case, as said, 2018 was a down year, and as I said, down years for you, at the moment, are good. You are stockpiling investments, you've just started, it's best they are cheap whilst you are buying them.
Get yourself educated. Read Monevator. Also try The Escape Artist. So you can get a handle on this stuff. It's not that complex but there is jargon you ned to know (such as the difference between shares and funds)

Malthusian

Thrugelmir wrote: »

Historical long term averages based on over 100 years of data are great. Trouble is in between prices can be volatile. Statistically you could potentially need to hold the investments and reinvest the income for a minimum of 12 years to produce such a positive return.

It is worth noting that this does not mean you might invest money, see a crash and then have to wait 12 years for it to recover. This has never happened in living memory. The dot com crash took about six years to recover for those with diversified non-geared portfolios, and that was exceptional.

What the statistics show is that within that 12 year period you will have years in which you are up and years in which you are underwater.

After a period of around 12 years the compounding of previous gains will hopefully have put you in a position where even at the bottom of a crash, you are still above where you started.

This is potentially a problem if you have a need to spend money at a fixed date in the future (say 4, 5, 6 years) because although you know with certainty that there will be up years and down years, you don't know where they will fall. If an underwater year happens to fall in the same year as your spending need then you lose money.

If however your goal is something like "I want to buy a house at some point in the next 12 years", there is no problem, because within that 12 there will be plenty of up years as well as down years, and you just pick an up year to spend your money.

Albermarle

A small loss over the last year would be in the ballpark but a loss the level you are suggesting sounds like you are doing something wrong.

This is what I was thinking . Anybody invested in a standard medium risk multi asset fund /default fund should have seen a small gain over the last two years , even taking into account the drop in 2018.

Maybe if the OP checked the very latest valuations it should look better .