20 year old s&p

HappyHarry

Economic wrote: »

The US is a country not a sector. Pharmaceuticals or technology would be sectors. You said that this investment in the S&P500 was very high risk not high risk, even though the US is 54% of the global index. How would you characterize investment in the shares of a single company or a single sector such as US biotech? You obviously do not not understand the English language and/or risk analysis.

This is an investment exposure to one asset class in one country, and that country is overseas exposing the investor to exchange rate risk on top of everything else. I too would call that very high risk on any scale that measures risk of retail investments.

claire21

I’m a little bit lost but glad you’ve all taken the tome to reply. So I’ll try him you read about LISA as presume as he’s 20 he will want to buy a house at a guess at around age 27 perhaps and look at the Vanguard global one instead . Would that be correct advice I can drop into conversation with him ? Thanks again

Just to recap £500 has gone in the US account
He’s got £10k left
Currently saves £100 pcm from small job (another year at uni until until finished)
I give him £1k a year (as I have 3 children so can gift £3k total a year)

Alexland

Economic wrote: »

You obviously do not not understand the English language and/or risk analysis.

It's not worth getting too tied up on the word sector. I suspect from reading SonOf's other posts that they are very knowledgeable about investment and I am glad they are with us in the forum to give their view.

Alex

Alexland

claire21 wrote: »

I’m a little bit lost but glad you’ve all taken the tome to reply. So I’ll try him you read about LISA as presume as he’s 20 he will want to buy a house at a guess at around age 27 perhaps and look at the Vanguard global one instead .

While a 100% equities fund (preferably with global exposure as discussed above) might be suitable for a 20 year investment period if your son is going to use S&S to buy a property in 7 years then they might want a more balanced fund containing both equities and less volatile fixed income bonds in a suitable ratio. Something like Vanguard LifeStrategy 60 might be more suitable. It would be unfortunate if stock market conditions were to cause his solicitor to withdraw less than he had contributed although that's much less likely considering the LISA bonus.

Alex

masonic

Economic wrote: »

The US is a country not a sector. Pharmaceuticals or technology would be sectors. You said that this investment in the S&P500 was very high risk not high risk, even though the US is 54% of the global index. How would you characterize investment in the shares of a single company or a single sector such as US biotech? You obviously do not not understand the English language and/or risk analysis.

"Sector" is used by the investment industry to refer to any of: country, industry, thematic. So, while you may not find it palatable, SonOf is using the term correctly and such use on this forum is often by financial advisers.

masonic

Alexland wrote: »

Something like Vanguard LifeStrategy 60 might be more suitable.

I'd probably go for something even more bond-heavy than that, or buy 60 in the early years and 20 in the later years.

Alexland

masonic wrote: »

I'd probably go for something even more bond-heavy than that, or buy 60 in the early years and 20 in the later years.

Yes maybe, the Vanguard Target Retirement 2025 is currently 61% equities (similar to VLS60) so maybe start with that and let them automatically derisk you on the 7 year glidepath?

Alex

claire21

Thanks again , I should of also perhaps mentioned his planning relates to being in a ‘good position’ at age 40 to 45, rather than at 60/65 as without going into to much detail that’s already planned for.

Alexland

claire21 wrote: »

Thanks again , I should of also perhaps mentioned his planning relates to being in a ‘good position’ at age 40 to 45, rather than at 60/65 as without going into to much detail that’s already planned for.

If getting into a good position in his early 40s means cashing in the S&S investments in 7 years at 27 to buy a property then it's still only a 7 year investment timescale so a balanced risk is more suitable. Still if he used a LISA and wanted to go 100% equities then he is probably only gambling with the government's money as it is highly unlikely he would have lost more than the bonus by the end of the 7 years accumulation.

Alex

Isaac_:)

Alexland wrote: »

Yes maybe, the Vanguard Target Retirement 2025 is currently 61% equities (similar to VLS60) so maybe start with that and let them automatically derisk you on the 7 year glidepath?

Alex

The Target Retirement Funds seem to be more geared towards drawing down a pension over time, whereas the purchase of a house is more akin to buying an annuity as you exit the market in one go. Personally I wouldn't want to be holding as many equities as the VTR funds do at the target retirement dates.