Starting out investing in your 20s looking to retirement

SamUff

Hi,
This is my first post so please be nice and excuse any naivety, although the questions are fairly simple.

Given the damage ( and potential further damage) to world markets from COVID-19, is now a good time to wait until the end seems to be in sight and begin to start long term investing to grow wealth towards retirement.

I'm 26, I have around 20k to invest to start and will be regularly topping up from salary.
I'd most likely start simple with investment trusts and diversify as I go on.

Another quick question on wealth accumulation if anyone knows - is it best to withdraw funds from your investment portfolio to put into property to further diversify, after some time had passed or would that affect your ability to generate compound interest over time too much?

Any feedback on all of the above would be much appreciated.

Thanks,
Sam

masonic

The markets move in anticipation of news, so if you wait until the end you will probably miss out on the best prices. If you are just starting out, then investing regularly throughout the falls will likely serve you well. It also gives you a bit of a reality check as to your risk tolerance if you get to experience some of the gyrations before things settle down.

Some people do not bother with property as an investment, because they own a home and have exposure through that. Commercial property funds and investments in REITs can be used to diversify, but they aren't a necessary constituent of an investment portfolio. BTL property is more of a business than an investment, and one that is becoming less attractive as previous incentives are withdrawn.

Thrugelmir

Do you have any pension provision through your employer? 
What attracted you to investment trusts? 

kinger101

Employer's schemes are usually the best scheme for retirement, particularly if there is an employer match available, and payments can be made under salary sacrifice.  If you could comment on what scheme your employer has, it would help others provide a better answer.

In some circumstances, adding a LISA to the mix can make sense too.

You might also indicate whether you own, or plan to own, your own home.  Not having to pay rent will improve your retirement prospects considerably, in both the medium and long term. 

dunstonh

Given the damage ( and potential further damage) to world markets from COVID-19, is now a good time to wait until the end seems to be in sight and begin to start long term investing to grow wealth towards retirement.

Why would you want to wait?  This is a great time to be making monthly contributions.   You need events like this to make more money.  If the markets never fell, you would have lower returns.

I'm 26, I have around 20k to invest to start and will be regularly topping up from salary.
I'd most likely start simple with investment trusts and diversify as I go on.

You will see market crashes every 5-10 years.  You have dozens of these to go through yet.   This is all quite normal.

Albermarle

I'd most likely start simple with investment trusts

Not normally the first choice for newbie investors ?

george4064

Albermarle said:

I'd most likely start simple with investment trusts

Not normally the first choice for newbie investors ?

Was thinking the same here, perhaps the OP needs to read up on global multi-asset funds.

worldtraveller

Hi Sam,

All I can add to the thread is to say that I started investing around the same age (a long time ago!). My first investments were in to something reasonably simple, with minimum management charges, with some sort of tax avoiding wrapper. I can't remember exactly now, but I believe it was a UK FTSE index tracker fund of some type, under a PEP wrapper. TBH, I can't be sure now, but it was back in the 1980's.

With FTSE 100, FTSE 250 & FTSE All Share funds now down around 27% from peak today, I'd personally probably be investing at least 25% of your available funds, as a lump sum, right now (meaning as in when I'd expect the main markets to fall again to at least -30% from peak, probably next week!), under an ISA wrapper. Then see how things develop going forward. If the markets subsequently dropped further, to around -35%/-40% from peak, which I personally believe that they certainly could do, I'd put in another, at least, 25% lump sum.

This is NOT advice! This is what I'd do now myself, based on past experience, and, as night follows day, you can be sure that others will have very differing views. You have to make your own decision, of course, but, IMHO, this is an opportunity to get in, at a start, well below peak market.

Whatever, good luck in whatever you choose to do, and, for what it's worth, I think you're wise to start to take the path that you are now, rather than later!

Thrugelmir

george4064 said:

Albermarle said:

I'd most likely start simple with investment trusts

Not normally the first choice for newbie investors ?

Was thinking the same here, perhaps the OP needs to read up on global multi-asset funds.

Which aren't what they might appear either.