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mark_cycling00

Resolved now

artyboy

Well the first question I'd be asking is why you were in MMFs in the first place.... if it was for the commonly stated reason of capital preservation (ignoring the inflationary risks), well... then if that hasn't changed, you're actually sitting pretty because your MMF returns should now be outpacing inflation. From a risk/return standpoint that's not the worst place to be in.

But if you are now fundamentally changing your risk tolerance... then generally the answer would be 'now' is always the best time to invest. If you really are looking at a long term view...

mark_cycling00

Good question. I didn't really know what to do with that cash long-term. 

I've moved away from riskier P2P and holding individual shares. But mmf is too low risk over 15years. The compounded difference between 6% and 3.5% is huge when I did a calculation and will make a big difference to retirement 

coastline

Just an idea and not advice. I've posted this last year so here goes.  Keep it fairly simple but under control and if the cash is in a tax wrapper then fine. Go 70% STMMF and 30% global tracker. At present the cash element should be an income of around 5% PA  . Maybe a bit less if interest rates are cut. The equity part of 30% total pot will be in the global tracker . If the nightmare crash happens say 50% slump you'd be down half of 30% so 15% of total pot. So not the end of the world. Historical data suggests this crash won't happen overnight and could develop over months or even years. Rebalancing could take place at intervals say every 10% fall in the tracker add from STMMF. 10% down would only be 3% of total pot so again hardly a big hit. Markets do move 10% so maybe every year you'd be rebalancing. Let's say the market drops 20% just like recent years. Rebalance and wait until recovery and if you're feeling confident hold until the ratio is 50% / 50% before rebalancing the other way back to STMMF. Now we have a mechanical system. 

5 year performance below in the chart from Trustnet. Global tracker , RL STMMF and CPI inflation just for a view. There's a few times you'd rebalance on the way down. Pandemic and 2022 -2023 at least. 

  Chart Tool | Trustnet

mark_cycling00

Thanks for the great answer,!