Should I transfer all my S&P 500 into a global tracker?

[Deleted User]

Bostonerimus1 said:

[Deleted User] said:

It's my SIPP I'm talking about. 

Thanks for all the responses.  I'm only 40 so a way to go before retirement so I've just submitted my request to transfer the whole lot from S&P 500 to Global All Cap.  If I lose a couple of quid in the transfer so be it, if I gain a few so be it.  Hopefully I won't need to do any big changes like that again.  I'm now just "set it and forget it". 

I think this is sensible. I'm a big advocate for keeping things simple and not trading or fiddling with things too much once you are happy with your investments. But that should not stop you from managing your finances in general. So use your pension and ISA allowances to be tax efficient. Keep your emergency cash fund healthy and make sure you have the right type and amounts of insurance and monitor your budget so you don't waste money, be mindful of what you spend.

Thanks! You sound like JL Collins (who I wish was MY dad!) <that's a mega compliment btw>

John464

masonic said:

John464 said:

There is another reason I think the UK stock market is undervalued.  UK investors have largely deserted the UK stock market because Government interventions in the housing market have made housing more attractive to investors.  Over 60% of UK equities are foreign owned by people who weren't in a position to capitalise on the UK rentier economy.
On top of that, there are other huge incentives to invest in other assets - like agricultural land and trusts which can be passed on free of inheritance tax.  All of which starves the UK market of investment and adds to the under-valuation.

Do you really think this is the case? UK investors make up a very small proportion of the market. I find it hard to believe that Government interventions in the housing market are impacting the appeal of UK-listed stocks. Supposing inheritance tax is abolished, as has been leaked to the press, will this really result in UK stocks becoming the preferred place for capital to be parked? I'm really struggling to see domestic housing policies influencing the FTSE100, or even the FTSE All share, though happy to be corrected.

My thinking is that, since UK money has gone into buy to let (because its been more profitable) or agricultural land and everything else thats exempt from inheritance tax, that is UK money that might otherwise have gone into UK stocks and raised the price. 

Bostonerimus1

[Deleted User] said:

Bostonerimus1 said:

[Deleted User] said:

It's my SIPP I'm talking about. 

Thanks for all the responses.  I'm only 40 so a way to go before retirement so I've just submitted my request to transfer the whole lot from S&P 500 to Global All Cap.  If I lose a couple of quid in the transfer so be it, if I gain a few so be it.  Hopefully I won't need to do any big changes like that again.  I'm now just "set it and forget it". 

I think this is sensible. I'm a big advocate for keeping things simple and not trading or fiddling with things too much once you are happy with your investments. But that should not stop you from managing your finances in general. So use your pension and ISA allowances to be tax efficient. Keep your emergency cash fund healthy and make sure you have the right type and amounts of insurance and monitor your budget so you don't waste money, be mindful of what you spend.

Thanks! You sound like JL Collins (who I wish was MY dad!) <that's a mega compliment btw>

Thanks, I'll always take a compliment, but I'm very wary of anyone who sets themselves up as a financial guru. Well maybe that's not entirely true, my financial guide star has always been Mr. Micawber who was opining about the dangers of debt and over spending long before Collins and Dave Ramsey.

“Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.”

masonic

John464 said:

masonic said:

John464 said:

There is another reason I think the UK stock market is undervalued.  UK investors have largely deserted the UK stock market because Government interventions in the housing market have made housing more attractive to investors.  Over 60% of UK equities are foreign owned by people who weren't in a position to capitalise on the UK rentier economy.
On top of that, there are other huge incentives to invest in other assets - like agricultural land and trusts which can be passed on free of inheritance tax.  All of which starves the UK market of investment and adds to the under-valuation.

Do you really think this is the case? UK investors make up a very small proportion of the market. I find it hard to believe that Government interventions in the housing market are impacting the appeal of UK-listed stocks. Supposing inheritance tax is abolished, as has been leaked to the press, will this really result in UK stocks becoming the preferred place for capital to be parked? I'm really struggling to see domestic housing policies influencing the FTSE100, or even the FTSE All share, though happy to be corrected.

My thinking is that, since UK money has gone into buy to let (because its been more profitable) or agricultural land and everything else thats exempt from inheritance tax, that is UK money that might otherwise have gone into UK stocks and raised the price. 

I'm sceptical that those who have invested their money in real assets would otherwise have invested it in specifically the UK stock market were it not for government and tax incentives. Many perceive these assets as far safer than risky shares. Those with a more enlightened attitude are likely to opt for or be guided into investments with global diversification. The next generation is growing up with multi-asset funds and robo-investments with little to no home bias, and free share trading apps focusing on US stocks. They are also unlikely to be interested in a market containing so many old world companies. This shift has also been seen in the most popular funds amongst private investors on DIY platforms. There was talk of government intervention in favour of UK stocks, with rumour of an additional ISA allowance, but this seems to have fizzled out. There are existing tax incentives to invest in the UK AIM market, and of course VCT and EIS schemes, but these are rather niche. The more attractive part of the market in my view is small caps. I have some home bias in my portfolio and none of it lies within the scope of the FTSE100, in fact I am underweight UK large caps vs the global index.

mr._prude

Oh dear, most of my pensions and S&S ISAs are invested in the S&P 500, would moving to a world equity fund be a better call, if the bubble is ready to pop?

Albermarle

mr._prude said:

Oh dear, most of my pensions and S&S ISAs are invested in the S&P 500, would moving to a world equity fund be a better call, if the bubble is ready to pop?

Well I reduced my US% about 4 years ago, as all the signs and media speculation was that it was about to pop.
That did not work out too well.....
However I am not a 100% equity investor so less of an issue.

masonic

mr._prude said:

Oh dear, most of my pensions and S&S ISAs are invested in the S&P 500, would moving to a world equity fund be a better call, if the bubble is ready to pop?

What were your original reasons for investing in the S&P500 rather than a world equity fund?

mr._prude

Better growth. 

Say the S&P500 drops 50% at some stage in 2024, if a world equity has 60% of US stocks would it see at least a 30% drop plus the effects this would have on other markets?

Hoenir

masonic said:

John464 said:

masonic said:

John464 said:

There is another reason I think the UK stock market is undervalued.  UK investors have largely deserted the UK stock market because Government interventions in the housing market have made housing more attractive to investors.  Over 60% of UK equities are foreign owned by people who weren't in a position to capitalise on the UK rentier economy.
On top of that, there are other huge incentives to invest in other assets - like agricultural land and trusts which can be passed on free of inheritance tax.  All of which starves the UK market of investment and adds to the under-valuation.

Do you really think this is the case? UK investors make up a very small proportion of the market. I find it hard to believe that Government interventions in the housing market are impacting the appeal of UK-listed stocks. Supposing inheritance tax is abolished, as has been leaked to the press, will this really result in UK stocks becoming the preferred place for capital to be parked? I'm really struggling to see domestic housing policies influencing the FTSE100, or even the FTSE All share, though happy to be corrected.

My thinking is that, since UK money has gone into buy to let (because its been more profitable) or agricultural land and everything else thats exempt from inheritance tax, that is UK money that might otherwise have gone into UK stocks and raised the price. 

They are also unlikely to be interested in a market containing so many old world companies. This shift has also been seen in the most popular funds amongst private investors on DIY platforms. 

?

Over 90 constituents of the S&P 500 index were founded over 100 years ago. The earliest dates back to the 1700's. Social media endlessly perpetuates myths. 

masonic

mr._prude said:

Better growth. 

Say the S&P drops 50% at some stage 2024, if a world equity is 60% of US stocks would it see at least a 30% drop plus the effects this would have on other markets.

It's rather unlikely the S&P will drop 50% at some stage in 2024. But high valuations will test your 'better growth' thesis going forward.