Where to invest lump sum now in 2022 - a fund or a property

bitstreams

I have a lump sum currently sitting uninvested. I don't have any debts and already have a property that's let out and a holiday let. Was going to invest in a fund through an existing broker, but perhaps I should be steering away from anything shares related at the moment?
I know the property market is fairly high at the moment, but would I be safer looking at another property? Which way is the wind blowing?

Alistair31

Hard to comment. 

You tell us what you already have in property, but do not do similar for investment funds etc. 

jimjames

bitstreams said:

I have a lump sum currently sitting uninvested. I don't have any debts and already have a property that's let out and a holiday let. Was going to invest in a fund through an existing broker, but perhaps I should be steering away from anything shares related at the moment?
I know the property market is fairly high at the moment, but would I be safer looking at another property? Which way is the wind blowing?

Forecast in the paper this morning that property market could drop 10% or so over next 18 months. Not sure that would be any better than buying investment fund especially when you consider tax

Albermarle

 but perhaps I should be steering away from anything shares related at the moment?

Why? 

Presume like a lot of inexperienced investors , you think there will be a time when there will be lots of good news and this will be the right time to buy .

At which point the market will have already reacted to the good news and share prices will already have gone up. Similarly at the moment the market has priced in what it thinks the impact of Ukraine will be on global share prices. Of course the market can be wrong but less likely to be wrong than an individual like you or me.

I would say especially as you are highly exposed to property risk already . you need to diversify into other investment areas .

 Which way is the wind blowing? Today SSW , tomorrow W apparently . Next week , maybe N , not sure , after that totally unpredictable , just like the stock and property markets.

bitstreams

Alistair31 said:

Hard to comment. 

You tell us what you already have in property, but do not do similar for investment funds etc. 

We have some SJP managed funds and a new fund manager who would be delighted if we added this cash to the pot, but whilst they have performed well above the previous levels of low inflation, I guess I'm more sceptical about making a profit if inflation is up above 5%.

The rented property yields around 11K per year and the holiday let about 12K which is useful money at this stage of our lives (late 50s). 

bostonerimus

Without knowing your overall asset allocation it's impossible to give sensible comments, but here are some comments anyway.
You already have property assets so would adding to them unbalance you asset allocation? What other investments do you have, funds in pensions and ISAs etc? Also remember the answer does not need to be binary; you can put some money into property and some into funds. Also your current circumstances matter ie how close to retirement are you etc?

bitstreams

bostonerimus said:

Without knowing your overall asset allocation it's impossible to give sensible comments, but here are some comments anyway.
You already have property assets so would adding to them unbalance you asset allocation? What other investments do you have, funds in pensions and ISAs etc? Also remember the answer does not need to be binary; you can put some money into property and some into funds. Also your current circumstances matter ie how close to retirement are you etc?

That's fair comment, though I don't think we have much option of splitting the cash, as investing it in property means investing all of it (unless we want to buy in an area that we don't know).

We are both early retired, or out of work, or something in between at the moment.

jimjames

bitstreams said:

Alistair31 said:

Hard to comment. 

You tell us what you already have in property, but do not do similar for investment funds etc. 

We have some SJP managed funds and a new fund manager who would be delighted if we added this cash to the pot, but whilst they have performed well above the previous levels of low inflation, I guess I'm more sceptical about making a profit if inflation is up above 5%.

The rented property yields around 11K per year and the holiday let about 12K which is useful money at this stage of our lives (late 50s). 

First step would be to move away from the vastly expensive SJP funds. When you say fund manager I assume you actually mean adviser? Most people don't employ their own fund manager unless they're multi millionaires.

grumiofoundation

Deleted_User said:

Albermarle said:

 but perhaps I should be steering away from anything shares related at the moment?

Why? 

Presume like a lot of inexperienced investors , you think there will be a time when there will be lots of good news and this will be the right time to buy .

At which point the market will have already reacted to the good news and share prices will already have gone up. Similarly at the moment the market has priced in what it thinks the impact of Ukraine will be on global share prices. Of course the market can be wrong but less likely to be wrong than an individual like you or me.

I would say especially as you are highly exposed to property risk already . you need to diversify into other investment areas .

 Which way is the wind blowing? Today SSW , tomorrow W apparently . Next week , maybe N , not sure , after that totally unpredictable , just like the stock and property markets.

Currently the markets are massively inflated. 

A good single asset example of this is the recent Gamestop story. People banded together and started buying up stock of a worthless company. The ball started rolling and this worthless company's shares went sky high. Those that started the ball rolling made a small fortune, but the moment people started to withdraw the whole thing collapsed. People lost everything. 

When money is printed to artificially inflate the markets you're kinda creating a gamestop situation.

If people get jittery (as they're doing) and start to sell you could end up with nothing. 

The only thing that will always hold it's real, intrinsic value is property, land, tools, oil, gold etc. The price can fluctuate, but it had intrinsic value so will never become completely worthless. 

If you personally feel jittery and you sense others are too, it's probably not the time to invest. It's all about perception and trust.

No gamestop is a frankly ridiculous example to pick to represent the market.

The rest of the market may or may not be in a bubble, or due to crash etc etc but to conflate the whole stock market with one single instance is ridiculously misleading the the OP (whether deliberately misleading to support your own arguments that are littering the forum or simply because you don't really understand the stock market, evidence for which also litters the forum!).

The chances of an investment in globally diversified investment fund going to nothing as you seem to be suggesting is approaching zero. 


For goodness sake actually do what you claim to be doing and actually do some research on the basic fundamentals of the stock market if you are going to post on every thread telling people your opinions.

This is a topic that I've been putting a lot of research and thought into. 

bostonerimus

Being a retiree I don't think it's the best idea to lock away large amounts of capital in property, particularly as you already have money in that area. If you have the right property and tenants, then the income is nice, but it really reduces your flexibility if you go overboard. I'd make sure your emergencuy cash account is well funded and then put the rest into a low cost global equity fund...right now might be a great time to buy if you have a 30 year time horizon. But your best investment move might simply be to get out from under SJP.

Albermarle

We have some SJP managed funds and a new fund manager who would be delighted if we added this cash to the pot, but whilst they have performed well above the previous levels of low inflation, I guess I'm more sceptical about making a profit if inflation is up above 5%.

Even more difficult to beat inflation when paying SJP's high fees.