Where to invest £50k these days?

IAMIAM

Want to be able to access some in an emergency but looking to put it away for 3-5 years minimum potentially longer....

I have a S&S ISA with H&L that has £1000 but now valued at £1650 as it was all fundsmith equity fund that I put in about 3 years ago. With a 65% increase, I am tempted to put it into this?

eskbanker

Three to five years is short for investing but you could invest, say, £40K and keep the other £10K in accessible cash form if you need an emergency fund.

Don't make investment decisions based on past performance as if that'll repeat though, you need to consider the fundamentals about asset allocation, risk levels versus your tolerance, etc, as well as your objectives for the money....

grumiofoundation

IAMIAM said:

Want to be able to access some in an emergency but looking to put it away for 3-5 years minimum potentially longer....

I have a S&S ISA with H&L that has £1000 but now valued at £1650 as it was all fundsmith equity fund that I put in about 3 years ago. With a 65% increase, I am tempted to put it into this?

As said above don't invest based on past performance and 3-5 years in a short period for investing. Is the money needed in 3-5 years?

Also important to note the performance is down to the investment chosen, not the platform. 

Assuming you haven't paid any money into ISAs this year you could pay in 20k this tax year, 20k next tac year (April 2022).


If you aren't willing to accept the volatility of an 100% equity investment (like fundsmith) as suggested above putting some into cash is an option.

IAMIAM

Thanks for this, my only concern was the big scandal with the Neil Woodford scandal 

eskbanker

IAMIAM said:

Thanks for this, my only concern was the big scandal with the Neil Woodford scandal 

If that's your only concern, then what made you choose to invest in another narrowly-focused managed fund like Fundsmith (with its grand total of 29 holdings) rather than something more diversified?

IAMIAM

True. I have been looking, and may do £20k in Vanguard Lifestyle 100% Equity and £20k in fund smith equity. 40k in S&S ISA in April 2022

solidpro

grumiofoundation said:

As said above don't invest based on past performance and 3-5 years in a short period for investing. Is the money needed in 3-5 years?

Whilst I understand the relationship in this idea to 'gambling' on a coin landing heads up just because it did so twice before, as far as broad, amateur investment advice I think you're wrong to simply say don't invest based on past performance. Maybe not 'past performance alone'. What is an amateur supposed to do? Ignore the fact that the Dow Jones has gone from 2,500 to 35,000 over 100 years? 

You've said what not to do but the only advice you've given is 'cash'. That's not an investment.

solidpro

IAMIAM said:

True. I have been looking, and may do £20k in Vanguard Lifestyle 100% Equity and £20k in fund smith equity. 40k in S&S ISA in April 2022

Sounds fair enough to me. And then £10k on black.

grumiofoundation

solidpro said:

grumiofoundation said:

As said above don't invest based on past performance and 3-5 years in a short period for investing. Is the money needed in 3-5 years?

Whilst I understand the relationship in this idea to 'gambling' on a coin landing heads up just because it did so twice before, as far as broad, amateur investment advice I think you're wrong to simply say don't invest based on past performance. Maybe not 'past performance alone'. What is an amateur supposed to do? Ignore the fact that the Dow Jones has gone from 2,500 to 35,000 over 100 years? 

You've said what not to do but the only advice you've given is 'cash'. That's not an investment.

What an amateur is 'supposed' to go is to ignore the past performance of their investments when deciding whether or not to invest.
As opposed to deciding to invest money that may be needed in 3-5 years in a 100% equity investment because it has gone up 65% in the past 3 years. Which if you read the OP this is exactly what the poster was implying they were considering and why. 

At the point you decide investing is suitable you are probably right saying don't invest on past performance alone is maybe more accurate. Although I would infer from that statement that past performance is a, if not the, major factor in choosing where to invest. Worth considering if you invested on past performance you would be investing in small, very volatile companies, concentrated single country funds, cryptocurrencies etc


I don't agree that choosing to hold cash rather than investing is not an investment choice. What I also said was

If you aren't willing to accept the volatility of an 100% equity investment (like fundsmith) as suggested above putting some into cash is an option. 

Which is not the same as saying 'cash'. (And no posters on this site should be giving advice).

IAMIAM

If I were to put 40k in a S&S ISA with no top up, based on averages of 8-10% minimum per annum on these two funds, what would I be looking at in say 5 years time?

eskbanker

IAMIAM said:

If I were to put 40k in a S&S ISA with no top up, based on averages of 8-10% minimum per annum on these two funds, what would I be looking at in say 5 years time?

£40K * 1.09^5 = £61.5K

Not a very realistic planning assumption though, and you could easily be at less than £40K over that timeframe....