4 Month Investment Plan

JulieRight

Hello,
I have around £180k to invest.
- I have 10k inside a trading 212 CFD account which I use to do a little day trading (enough to buy a cup of coffee and food purchases)
- I have 15k in Etoro (which is not ideal due to the fluctuating USD/GBP exchange rate at the time of deposit/withdrawal)

The rest of the funds are sitting inside general bank accounts being eroded by inflation.

I have been monitoring the stock market since the pandemic.  I'd like to invest all the funds for the next 4 months - so all £180k.
I'd then withdraw around £160k to buy an apartment - OR, depending on how much I make in those 6 months, leave the £180k for a further 12 months (during which time I will live in a student apartment whilst studying for a masters course). The latter will only work if I make more than £10k between now and August to fund the student flat for those 12 months. The aim is to use all those funds, whether in 4 months or 16 months to buy a property.

I have read Martin's advice on investing.
He recommends a Vanguard ISA but does this option allow customers to choose individual stocks?  - I'd like to built a transport / commodity / hospitality heavy portfolio because I think tech is overvalued and bloated at the moment due to the pandemic and tech stocks may decrease significantly once travel opens up again over the summer. Big tech stocks like Amazon/Microsoft are OK though.

So I'd like your advice on how you'd spread out the rest of the funds for this short time investment plan of mine? 
Worst case: the market crashes in the next 4 months (tech might) but I think the fundamentals like commodity will still be here?

Advice welcomed.  Thanks.

JulieRight

Sorry - I should have mentioned, I'm specifically looking for names of reputable online brokers I can use and the names of some stocks too - I'm familiar with trading212 - any others with low fees and no issue withdrawals? thanks.

JulieRight

One option:

10k trading 212 CFD - for day trading on the side
20K trading 212 ISA - for tax year 21/22
10k in trading 212 invest - tax liable

That gives: 40k in trading 212 (is that safe to put 40k in one broker)?

What about the rest of the £140k?

Should I stick all this £140k inside a Vanguard account:
-  does the account allow customers to choose individual stocks
-  can I withdraw after 4 months? (are there any time limits on withdrawing)?

advice welcome. thanks.

JulieRight

I'd just say that I'd have invested sooner but this is a lot of money for me and I worry about the market crashing, so am very cautious and hesitant... But I think the worst of the pandemic has happened and the economy is coming out of it soonish, so I can profit off the tail end of the recovery. Well that's my plan.Thanks a lot.

Alexland

JulieRight said:

I'd just say that I'd have invested sooner but this is a lot of money for me and I worry about the market crashing, so am very cautious

You are right to be cautious markets can crash at any time for many different reasons which is why S&S investment is only suitable for periods of at least 5 years preferably longer (especially with such high US valuations at the moment) to reduce the risk of withdrawing at a loss. What happens to share prices over periods of months is almost random.

JulieRight

Alexland said:

JulieRight said:

I'd just say that I'd have invested sooner but this is a lot of money for me and I worry about the market crashing, so am very cautious

You are right to be cautious markets can crash at any time for many different reasons which is why S&S investment is only suitable for periods of at least 5 years preferably longer (especially with such high US valuations at the moment) to reduce the risk of withdrawing at a loss. What happens to share prices over periods of months is almost random.

Looking at the NASDAQ chart, it looks ridiculous frankly.  That is what is putting me off investing.  Surely such bullish run cannot be sustained after the pandemic when we're no longer stuck inside? Or has the pandemic attracted more people to investing who otherwise wouldn't, like me, which is driving up prices??? The whole market looks very unstable and unnatural but I'm no expert. Just my gut feeling tbh. Surely summer must be a good time for stocks - last year was? 

JulieRight

Worst thing that could happen.. I buy now... Nasdaq at 14k... In 4 months, market correction happens or even crashes and Nasdaq drops to 10-12k... My 180k drops to 140-150k... That would be just my luck!!

Alexland

JulieRight said:
 The whole market looks very unstable

Equity market valuations are unstable which is why a longer time period is needed to have much confidence in a positive return. Sometimes crashes take many years to recover and what happened last year with the covid crash should not be considered typical.
Invest by owning assets (rather than using CFDs) over the long term using tax efficient pensions and ISAs with reputable platforms but for money needed in the short term it's most suitable to stick to cash savings products.

JulieRight

Alexland said:

JulieRight said:
 The whole market looks very unstable

Equity market valuations are unstable which is why a longer time period is needed to have much confidence in a positive return. Sometimes crashes take many years to recover and what happened last year with the covid crash should not be considered typical.
Invest by owning assets (rather than using CFDs) over the long term using tax efficient pensions and ISAs with reputable platforms but for money needed in the short term it's most suitable to stick to cash savings products.

Ok but what do you think the likelihood is that the market corrects or crashes in the next 4 months - end of July?  We've just had a tech correction in March and I expect the markets to rally again to a new high into the summer. 

HappyHarry

Investing should not be considered for money that you want to use in four months time. Trading over that time frame is akin to gambling.

Inflation will have little impact over 4 months, certainly far less impact than market movements.

Just keep your funds in a deposit account (or two) whilst you look for the apartment you want to buy. 

Alexland

Its entirely possible that we could see a crash or broad market correction in the next 4 months but nobody knows which is why it's very risky puting money into markets when you need it soon. You know this already which is why you haven't invested the majority of this money. I doubt any of the regulars here would suggest S&S investment is suitable for a few months.