Which stocks & shares ISA

tichtich

danm said:

PJD said:

So looking at this, I can see why you should invest for at least 5 years to ensure the biggest returns, however, most years it raises far beyond a normal cash ISA anyway, - so why is it so important to keep the money in there for so long?
Looking at the history of all of the other Vanguard Lifestratety products, they've all gone up most years well above the best cash ISA

Being invested for the long term is not so much about improving returns but more about about being able to see-through/outlast any market downturns to still come out ahead. To illustrate: at some point over the next ten years, it is perfectly feasible that the market will drop by 30% and then take 3 years to recover that amount. It is also perfectly feasible that after dropping 30% it will increase at 9% per year for the next 7 years.

It's also perfectly feasible that it could be significantly worse than that! By historical standards the stock market is very overpriced at present. Even if there isn't a major correction in the near future,  investing at these prices means that future returns are likely to be relatively poor. 

Personally,  I've decided not to invest my lump sum at present. I realise I risk missing out, but with prices so high I feel that it's more risky to invest right now.