Liquidate entire portfolio until virus is over?

chelseablue

Thrugelmir said:

chelseablue said:

I know investing is for the long term, but I have a question please; 
I'm 36 so have about 30 years until retirement 
Couple of weeks ago my S&S ISA was at £8,200, today its at £6,300
I have a personal loan with £7,800 left to pay, I'm just wondering would it be a good idea to pay off most of the loan with the ISA money before the market tanks any more? Get a bonus at the end of March that will pay off the remainder

Without the loan payment I could save about £1,000 a month (£500 cash, £500 ISA) so wouldn't take too long to build the ISA back up

Leveraging to invest is a double edged sword. In good times easy to think that investing is a one way street. When markets turn falls are savage. Rarely gentle let downs. Personally I would bite the bullet and clear the loan. As you've suggested. Build a cash reserve as well. Might not produce optimal returns but will avoid borrowing money again in the future. 

I've got £5,000 cash savings that I add £500 to a month. This is my emergency fund (well the start of it!) Im a homeowner with a 14 year old car so will keep the cash where it is I think 

Doshwaster

Decision time. My 2019/20 bonus is due to be paid and I have until tomorrow to declare whether I want to take it as cash, pay it into my pension or do a split. The grown up thing to do would be to pay it into the pension to get the tax benefits and (hopefully) cheap units but my credit card bill would say pay me off. The trouble is we need to make the decision before finding out the value of the bonus.

Thrugelmir

Doshwaster said:

Decision time. My 2019/20 bonus is due to be paid and I have until tomorrow to declare whether I want to take it as cash, pay it into my pension or do a split. The grown up thing to do would be to pay it into the pension to get the tax benefits and (hopefully) cheap units but my credit card bill would say pay me off. The trouble is we need to make the decision before finding out the value of the bonus.

Because something has fallen sharply in price. It doesn't make it cheap. The question to ask is whether it offers value at the current market price. 

chelseablue

Doshwaster said:

Decision time. My 2019/20 bonus is due to be paid and I have until tomorrow to declare whether I want to take it as cash, pay it into my pension or do a split. The grown up thing to do would be to pay it into the pension to get the tax benefits and (hopefully) cheap units but my credit card bill would say pay me off. The trouble is we need to make the decision before finding out the value of the bonus.

That seems a bit unfair, we can do the same have it as cash or pay it into our pension but we find out what it is first! (Sorry no helpful advice) 

Reaper

Sue58 said:

May I ask why you decided to invest in Aviva instead of say Legal & General,(both have similar yields)?

Actually I started out looking at Legal & General but then switched to Aviva. There is little to choose between them. Aviva's recent profit figures and slightly higher yield pipped them at the post for me, but I gather Aviva haven't done as well growing their business so there are pros and cons. Either would be fine.

It's good to see the stock markets heading up again after my purchase yesterday. My feeling is there will be a second panic driven downturn when the virus gets a grip in the rest of western Europe and the USA, so I will be looking for buying opportunities again then.

Doshwaster

chelseablue said:

Doshwaster said:

Decision time. My 2019/20 bonus is due to be paid and I have until tomorrow to declare whether I want to take it as cash, pay it into my pension or do a split. The grown up thing to do would be to pay it into the pension to get the tax benefits and (hopefully) cheap units but my credit card bill would say pay me off. The trouble is we need to make the decision before finding out the value of the bonus.

That seems a bit unfair, we can do the same have it as cash or pay it into our pension but we find out what it is first! (Sorry no helpful advice) 

Yeah - quite a few people complaining to payroll about it so we'll see if we can get an extension. It seems to be an arbitrary deadline set by Finance without any reason behind it.
It doesn't help that we are now under a new bonus scheme after being acquired last year which makes predicting your bonus to be much harder than before as there are more factors involved including the parent company's performance.

EdGasketTheSecond

If the interest rate on the personal loan is high (say > 4%), it would be worth paying off before investing. As to whether you should sell off your S&S ISA, no-one can say for sure as the previous posts show; it may regain value or fall further.

Thrugelmir

Doshwaster said:

chelseablue said:

Doshwaster said:

Decision time. My 2019/20 bonus is due to be paid and I have until tomorrow to declare whether I want to take it as cash, pay it into my pension or do a split. The grown up thing to do would be to pay it into the pension to get the tax benefits and (hopefully) cheap units but my credit card bill would say pay me off. The trouble is we need to make the decision before finding out the value of the bonus.

That seems a bit unfair, we can do the same have it as cash or pay it into our pension but we find out what it is first! (Sorry no helpful advice) 

Yeah - quite a few people complaining to payroll about it so we'll see if we can get an extension. It seems to be an arbitrary deadline set by Finance without any reason behind it.

Deadline will be determined by the end of the 2019/2020 tax year / payroll processing cut-off deadline for March. If the bonus pool hasn't been determined yet. There's very little time left to action and process. 

chelseablue

EdGasketTheSecond said:

If the interest rate on the personal loan is high (say > 4%), it would be worth paying off before investing. As to whether you should sell off your S&S ISA, no-one can say for sure as the previous posts show; it may regain value or fall further.

Loan rate is 2.9% so not too high, although mentally I think I would feel better paying it off and 'starting again' 

Alexland

If you are in secure employment and the S&S ISA was the start of a planned long term investing journey then I would continue to contribute regularly to average down your unit costs while also paying off the loan on parallel. No point crystalising a loss unnecessarily.