AJ Bell Lisa Which Fund to Invest in?

bostonerimus

katkatmachine said:

Hi All,

I have finally moved my Cash LISA from Skipton to AJ Bell. The problem is there's just so many funds to invest in that I don't know where to start. Can you please recommend some? I'm just so confused! Here's some info about myself:

31 years old
Investment is for my retirement (60 years old)
Adventurous and leaning towards equity and growth stocks/funds
Current balance in LISA: £3200
I plan to invest only £100 per month or £1200 per year. Due to the fees, I'm thinking of just buying shares 2-3 times a year.

Can you please advise/recommend a few funds where I can invest my money in given my info above?

Thanks,
Kat

Don't worry about the last few posts, all you have to do is to invest in a low cost multi-asset fund and you'll get a ready made portfolio. As you are young it's probably best to use one that has a high percentage of equities as it will give you growth, But remember sometimes they will lose money and when that happens you must not panic as given enough time they will come back up, so look at funds like Vanguard Life Strategy 80 or 100 or HSBC Global Strategy Dynamic...also use the accumulation version of these funds as they reinvest the dividends that the funds earn.

katkatmachine

Hi All,

Thank you so much for the comments. I am truly learning in this discussion. I asked for an advice here in the forum as I am not familiar with with UK/US markets especially when it comes to funds. Looking at all the funds in AJ Bell is a bit overwhelming for me so I needed a few recommendations for me to start with. Based on the advices that I received and from what I've researched, Vanguard LifeStrategy 100 Acc suits my investment goal. Yes, I agree with you guys, given my age, and since this will be for my LISA which I will not be able to touch until I'm 60, 100% equity would be best for me. @Alexland is right though, it is US-heavy hence I also have an EM fund. hehehe.

Regarding the EM fund, I actually have a bias towards EM as I am from one. I really think that there's a high growth potential in investing in the companies in Asia. Oh btw, I also have a few stocks in my portfolio in my trading account back home, I've been trading for a few years now so I am familiar with trading/investing.

bostonerimus - oh yes, I chose the accumulation one. I had to google this bit actually as I am not familiar with accumulation vs income at first. Usually if I receive dividends from my stocks, they get added in my capital. I didn't know that in funds it could be automatically reinvested. Good thing I checked first! hehehe. Thank you.

Thanks again guys.

Kind regards,
Kat

bostonerimus

Forget about trading...this is buy and hold for 30 years through the ups and downs. You already have some EM in VLS100 so I would not add to that. Whenever there is high growth potential there is also potential for big losses. Don't back more horses than you need, VLS100 is plenty. Your "hehehe" overweight on EM might be a good idea, but it equally might be a dumb move. Do things for good reasons not on hunches and remember "pride often comes before a fall".

masonic

JohnWinder said:

How were Research Affiliates predictions made 5 years ago, or 2 years ago, that we might see how good they were? Part of their business, to make their money, is to come up with analyses like that. It never has to be right, just done. It can be fun to read, but I doubt it gets most of us anywhere better. Depends how much of a gambler one is I suppose, and no crime in being one.

I first came across Research Affiliates in 2014 and at that time they were predicting that 10 year real expected returns for US large cap stocks would be negative. Meanwhile the S&P500 has more than doubled against cumulative US inflation of less than 15%.

Alexland

My concern with going overweight on EM would be the likely high exposure to China where to circumvent rules on foreign ownership a Variable Interest Entity structure is used which doesn't provide the normal security a shareholder should expect and could make the entire investment vulnerable to political tensions between China and the west.
It's an issue Terry Smith was drawing attention to when he launched FEET and seems increasingly relevant today.

george4064

For LISA, I would invest 100% in the Vanguard FTSE Global All Cap Fund (Acc).

Keep it simple, buy and forget. 

Thrugelmir

masonic said:

JohnWinder said:

How were Research Affiliates predictions made 5 years ago, or 2 years ago, that we might see how good they were? Part of their business, to make their money, is to come up with analyses like that. It never has to be right, just done. It can be fun to read, but I doubt it gets most of us anywhere better. Depends how much of a gambler one is I suppose, and no crime in being one.

I first came across Research Affiliates in 2014 and at that time they were predicting that 10 year real expected returns for US large cap stocks would be negative. Meanwhile the S&P500 has more than doubled against cumulative US inflation of less than 15%.

The rationality of investors is unquantifiable. The S&P 500 is trading far above it's long term measurements such as PE.  

masonic

Thrugelmir said:

masonic said:

JohnWinder said:

How were Research Affiliates predictions made 5 years ago, or 2 years ago, that we might see how good they were? Part of their business, to make their money, is to come up with analyses like that. It never has to be right, just done. It can be fun to read, but I doubt it gets most of us anywhere better. Depends how much of a gambler one is I suppose, and no crime in being one.

I first came across Research Affiliates in 2014 and at that time they were predicting that 10 year real expected returns for US large cap stocks would be negative. Meanwhile the S&P500 has more than doubled against cumulative US inflation of less than 15%.

The rationality of investors is unquantifiable. The S&P 500 is trading far above it's long term measurements such as PE.  

Research Affiliates make their predictions mostly based on CAPE (PE10). In 2014, this was looking high at ~28, well above the long term average at that time of ~16. This, in their view, made the US market uninvestable for the period 2014-present. Those who followed their thesis would have missed out on some of the best returns available in the subsequent 7 years. Now the S&P500 CAPE is up at nearly 40. That's pretty close to where it was at the peak of the dotcom boom. Testament that the markets can remain irrational longer than one can stay solvent. Meanwhile, markets such as Russia and Columbia that looked extremely cheap on valuation metrics have failed to deliver. Perhaps the intrinsic value of a company is more complex than the ratio of its current price to its previous earnings.

Thrugelmir

masonic said:

Thrugelmir said:

masonic said:

JohnWinder said:

How were Research Affiliates predictions made 5 years ago, or 2 years ago, that we might see how good they were? Part of their business, to make their money, is to come up with analyses like that. It never has to be right, just done. It can be fun to read, but I doubt it gets most of us anywhere better. Depends how much of a gambler one is I suppose, and no crime in being one.

I first came across Research Affiliates in 2014 and at that time they were predicting that 10 year real expected returns for US large cap stocks would be negative. Meanwhile the S&P500 has more than doubled against cumulative US inflation of less than 15%.

The rationality of investors is unquantifiable. The S&P 500 is trading far above it's long term measurements such as PE.  

Research Affiliates make their predictions mostly based on CAPE (PE10). In 2014, this was looking high at ~28, well above the long term average at that time of ~16. This, in their view, made the US market uninvestable for the period 2014-present. Those who followed their thesis would have missed out on some of the best returns available in the subsequent 7 years. Now the S&P500 CAPE is up at nearly 40. That's pretty close to where it was at the peak of the dotcom boom. Testament that the markets can remain irrational longer than one can stay solvent. Meanwhile, markets such as Russia and Columbia that looked extremely cheap on valuation metrics have failed to deliver. Perhaps the intrinsic value of a company is more complex than the ratio of its current price to its previous earnings.

The only return that matters is the one over your own chosen time period. While times have changed. The fundamental wisdom of Benjamin Graham still applies. Fundamentals do matter.  Been investing for long enough now to witness the cycles of the markets. As each generation of new investors believes that "This Time is Different".  There's good reason to be nervous of investing in markets such as Russia and Columbia. Just as there is in China and many other markets. Metrics alone aren't a reason to a pick a market. 

masonic

Thrugelmir said:

masonic said:

Thrugelmir said:

masonic said:

JohnWinder said:

How were Research Affiliates predictions made 5 years ago, or 2 years ago, that we might see how good they were? Part of their business, to make their money, is to come up with analyses like that. It never has to be right, just done. It can be fun to read, but I doubt it gets most of us anywhere better. Depends how much of a gambler one is I suppose, and no crime in being one.

I first came across Research Affiliates in 2014 and at that time they were predicting that 10 year real expected returns for US large cap stocks would be negative. Meanwhile the S&P500 has more than doubled against cumulative US inflation of less than 15%.

The rationality of investors is unquantifiable. The S&P 500 is trading far above it's long term measurements such as PE.  

Research Affiliates make their predictions mostly based on CAPE (PE10). In 2014, this was looking high at ~28, well above the long term average at that time of ~16. This, in their view, made the US market uninvestable for the period 2014-present. Those who followed their thesis would have missed out on some of the best returns available in the subsequent 7 years. Now the S&P500 CAPE is up at nearly 40. That's pretty close to where it was at the peak of the dotcom boom. Testament that the markets can remain irrational longer than one can stay solvent. Meanwhile, markets such as Russia and Columbia that looked extremely cheap on valuation metrics have failed to deliver. Perhaps the intrinsic value of a company is more complex than the ratio of its current price to its previous earnings.

The only return that matters is the one over your own chosen time period. While times have changed. The fundamental wisdom of Benjamin Graham still applies. Fundamentals do matter.  Been investing for long enough now to witness the cycles of the markets. As each generation of new investors believes that "This Time is Different".  There's good reason to be nervous of investing in markets such as Russia and Columbia. Just as there is in China and many other markets. Metrics alone aren't a reason to a pick a market. 

I don't disagree with the principle. The implementation, however, is not as straightforward. Companies like Research Affiliates and Cambria Funds have shown that betting the farm on a valuation metric alone can have disastrous consequences. The GVAL ETF, modelled on a very similar methodology as Research Affiliates, has enjoyed real returns of just 0.6% since inception. Those claiming US stocks should have been avoided during the past decade have erred on market timing. Reversion to the mean is inevitable, but these companies who claim to be able to forecast returns have shown their guesses are worth very little.