20 year old s&p

Flobberchops

Like NoMore mentioned, a British youngster ploughing that much money into the S&P500 suggests they've read a few investment books/blogs by US authors and have taken the whole thing a bit literally. It's not a bad idea per se, in fact they could very well come up smelling of roses, but best to view things through a UK lens if that's where they'll be living and working. Utilising an ISA/LISA and a SIPP would be worth considering.

londoninvestor

NoMore wrote: »

I've seen this investment made time and time again by younger people, I think its because they are reading a lot of the FIRE blogs (which all of the popular ones are US based) and choosing the S&P 500 because that's what those sites advise, however they take no account of they are in the UK where such advise does not take account of that fact. Different Tax regimes, Currency risk etc.

I've also seen a few posts on here suggesting that people follow a process of "buy a tracker...which one?...well this S&P500 seems to be the one that's gone up the most in the last 5 years..."

masonic

londoninvestor wrote: »

I've also seen a few posts on here suggesting that people follow a process of "buy a tracker...which one?...well this S&P500 seems to be the one that's gone up the most in the last 5 years..."

I consider this an improvement on 10 years ago, when people followed the process of buying a tracker and ended up in a FTSE 100 tracker. But diversification beyond a single country, especially one on such a high CAPE, seems sensible.

londoninvestor

masonic wrote: »

I consider this an improvement on 10 years ago, when people followed the process of buying a tracker and ended up in a FTSE 100 tracker.

Yes, to be fair that was me at OP's son's age OK, a bit more than 10 years ago and I think it was FTSE All-Share...

claire21

He’s got the Intelligent Investor book ..... I’m not sure what else he’s read

Alexland

[STRIKE][/STRIKE]

claire21 wrote: »

He’s got the Intelligent Investor book ..... I’m not sure what else he’s read

I have that book and it makes a good historical read but even the revised editions are dated. In the book Ben Graham suggests an equity exposure of between 25% and 75% equities (with the remainder in high grade bonds) depending on the investor's analysis of market value. At the time global markets were less available to US investors and methods such as CAPE hadn't been developed yet.

My investments move between 70% and 100% equities depending on my judgement of the opportunity. Over the long term 70% seems to be enough to capture the majority of the market upside as you get a boost from rebalancing. As the money piles up I am starting to feel like Warren Buffet's wife where my investments are highly likely to meet my modest objectives unless we encounter very adverse market conditions.

Alex

claire21

Would there be a book recommendation for a more up to date view please?

Alexland

Smarter Investing by Tim Hale is often recommended although I haven't read any beginner books recently so cannot comment.

masonic

I would second Smarter Investing. Also, Investing Demystified by Lars Kroijer is well worth a read - the essence of this book has been distilled down into a video series that can easily be found on Youtube.

londoninvestor

Also claire21, your son should take a look at this forum, though it will be some time before he's as prolific and highly-thanked a poster as you!