Vanguard ISA - £20k to invest

Pointers

Hi All,

Looking for some thoughts on what to do with my £20k allowance for this year.

My background:
Aged 42
£132k in Vanguard ISA currently
Moved all cash into S&S ISA last year having held in cash ISAs previously. Based on interest rates being low and being able to take more risks to try to get higher returns.
Already put the maximum amount into my work pension each year
Have savings and so shouldn't need to withdraw ISA funds and can leave invested for 15 - 20 years to benefit from capital growth and tax savings

I have £20k to invest this year.
No need to withdraw cash soon and so if market declines further I can hang on and (hopefully let it recover)

Anyway, I have my £132k invested in a number of funds.
Overall the value is -0.8% over 12 months
There has been substantial deviation in how the funds have performed (to be expected)
Best performer has been the S&P500 fund + 6.46%
Worst performer has been the FTSE 250 fund - 9.79%

All of my investments are in risk categories 5 and 6 and so some volatility is to be expected.

What to do next?
The S&P has performed relatively well but there are some on these boards suggesting its a bubble.
The FTSE 250 has performed badly. If I buy more now am I buying at the bottom or close to the bottom or could it slide even further.
Do i take the diversified approach and put £5k into 4 different funds (different fund types and/or different regions)?

I'm not actually looking for answers to these questions  but more thoughts of what I should be considering in my position and what others would do?

Any ideas welcome.

Thanks

dunstonh

Already put the maximum amount into my work pension each year

£40,000 or 100% of your salary?

What to do next?

Is your fund selection a bunch of randoms or do you follow a prescribed strategy with researched weightings?

Pointers

dunstonh said:

Already put the maximum amount into my work pension each year

£40,000 or 100% of your salary?

What to do next?

Is your fund selection a bunch of randoms or do you follow a prescribed strategy with researched weightings?

£40k 

Somewhere between the two. I do read up quite a lot but as I am starting from a low base of knowledge and have only been looking into this for 12 months my approach is quite random by default I would say. 

In the future I may hire someone to make these decisions for me but for the last 12 months or so I have been trying to better understand the market myself.   

Pointers

I would also add that I haven't had as much time to research recently as I would like and so my approach is less through through than I might ideally like. 

Pointers

One of my initial thoughts was to put more into a FTSE 100 fund as this is more weighted towards mining and energy stocks than others. I believe that these industries will have a good couple of years on the back of high energy and commodity prices globally.  

MX5huggy

If the S&P is a bubble (and we have to accept it is, it’s just a matter of when and how big the pop will be, there’s a case it’s been a bubble since 2013 so should we not of invested since then?) then it will drag all other equity indexes with it to greater or lesser extent. So going 250 or 100 is not going to protect you from that and therefore the 250 could easily fall 40%. 

I’m happy with global all world index investing, once you stop trying to educate yourself in something that no one has ever been able to consistently (even if it is their job, not just a hobby), I’m able to rest easy that my investments will be average, I’m happy with average over 15 to 20 years. 

Do you think about your pension investments this hard? 

Pointers

MX5huggy said:

If the S&P is a bubble (and we have to accept it is, it’s just a matter of when and how big the pop will be, there’s a case it’s been a bubble since 2013 so should we not of invested since then?) then it will drag all other equity indexes with it to greater or lesser extent. So going 250 or 100 is not going to protect you from that and therefore the 250 could easily fall 40%. 

I’m happy with global all world index investing, once you stop trying to educate yourself in something that no one has ever been able to consistently (even if it is their job, not just a hobby), I’m able to rest easy that my investments will be average, I’m happy with average over 15 to 20 years. 

Do you think about your pension investments this hard? 

No, I don't. This is why I like to hear the opinions of others. This then encourages me to research further. 

I have spoken to different financial advisors and may go with them and pay their fees but comments like this make me question whether there is really any value in them? i.e. are they going to consistently achieve above what I could by putting the cash into an index tracker over a very long period? 

"global all world index investing?" does this mean that you put everything in one fund to achieve this or a series of funds that is diversified so that you achieve this? 

Noted that if the S&P does burst this could pull down the 100 or 250 and every other index. Is it the case that all stock markets are this correlated with the S&P500? 

jimjames

Pointers said:

One of my initial thoughts was to put more into a FTSE 100 fund as this is more weighted towards mining and energy stocks than others. I believe that these industries will have a good couple of years on the back of high energy and commodity prices globally.  

If your portfolio is already balanced how you want then wouldn't the simplest option be to invest in the existing funds in the same proportions?

Albermarle

Do you think about your pension investments this hard? 

No, I don't. 

It is better to look at ones financial position in the round and not just concentrate on one area.

So pension ( and the investments within it if it is a DC pension ) ; Other stocks and shares investments ; cash savings ; mortgage/equity in property etc 

"global all world index investing?" does this mean that you put everything in one fund to achieve this or a series of funds that is diversified so that you achieve this? 

Normally just one fund . There are a few of these available . They are not identical but the end results are very similar.

Pointers

jimjames said:

Pointers said:

One of my initial thoughts was to put more into a FTSE 100 fund as this is more weighted towards mining and energy stocks than others. I believe that these industries will have a good couple of years on the back of high energy and commodity prices globally.  

If your portfolio is already balanced how you want then wouldn't the simplest option be to invest in the existing funds in the same proportions?

Its fairly balanced and so I may do this and put some into the existing funds and some into the a FTSE 100 tracker. The FTSE 100 has a greater percentage of energy and mining stocks and I don't have as much exposure to this as much of my current investment is in ESG funds. 

masonic

Pointers said:

jimjames said:

Pointers said:

One of my initial thoughts was to put more into a FTSE 100 fund as this is more weighted towards mining and energy stocks than others. I believe that these industries will have a good couple of years on the back of high energy and commodity prices globally.  

If your portfolio is already balanced how you want then wouldn't the simplest option be to invest in the existing funds in the same proportions?

Its fairly balanced and so I may do this and put some into the existing funds and some into the a FTSE 100 tracker. The FTSE 100 has a greater percentage of energy and mining stocks and I don't have as much exposure to this as much of my current investment is in ESG funds. 

Why would you pick ESG funds if you weren't intentionally avoiding these sectors? Seems strange to hold ESG funds, then 'balance' them with the companies stripped out.