If you had 12k to invest where would you put it?

kjs31

Thanks for the suggestions. For context I have just retired but don’t intend drawing down from my pension until next tax year for tax reasons. I have a relatively large pension pot (£1.3M) plus a small DB pension paying out next year, no debt and circa 500k in cash savings (I prefer the comfort factor of having a largish chunk in cash). I have a full state pension entitlement when the time comes (in a few years). My total S&S ISA is 105k currently so the 12k is a small part of it. I have a few small investments outside of the ISA but not much. 

I manage my own workplace pension (now an inactive member) and made a fair bit of money in US stocks and tech in the last few years. Did have some invested in a global tracker which made far less, Japan (made a bit), and emerging markets where I lost money over 5 years so I’m a bit reluctant to go back into emerging markets. Choice of funds available to select was pretty woeful though. OTOH I’m not seeing how the US / tech boom can continue indefinitely either but I’m still drawn there to a degree. 

I think I might put some into a global tracker and top my Vanguard funds up a bit. I’m still considering Asia though. 

kjs31

kempiejon said:

I try to minimise selling but I do harvest capital gains as tax planning or occasionally redirect if I think the share is overvalued and see another prospect.
How did you conclude 60p as the sale price for Lloyds? It is a nice round number and nothing wrong with taking a profit.
I have been adding Lloyds for 18 months at 45-55p and still think there is more and a useful 5% yield and growing dividend.
. 

I still have nearly 100k of Lloyds shares and felt the need to diversify a bit more. 60p was a number plucked from the air that they hadn’t reached in a while. I’m thinking of adding a ‘sell at 70p’ now (probably a bit ambitious 😉) to rid myself of a few more. 

kempiejon

kjs31 said:

 For context I have just retired but don’t intend drawing down from my pension until next tax year for tax reasons. I have a relatively large pension pot (£1.3M) plus a small DB pension paying out next year, no debt and circa 500k in cash savings...

Well that puts a different spin on in it. It doesn't really matter much were you invest it with that much already in play. You have a fair portfolio and pensions. I assume this money has always been part of the retirement plan?

I guess you've retired because you've done the sums and can afford it. You no longer need to focus on accumulating. 

Perhaps now is the time in your investing timeline to think of other things, legacy, philanthropy and indulgences.

Bostonerimus1

kjs31 said:

Thanks for the suggestions. For context I have just retired but don’t intend drawing down from my pension until next tax year for tax reasons. I have a relatively large pension pot (£1.3M) plus a small DB pension paying out next year, no debt and circa 500k in cash savings (I prefer the comfort factor of having a largish chunk in cash). I have a full state pension entitlement when the time comes (in a few years). My total S&S ISA is 105k currently so the 12k is a small part of it. I have a few small investments outside of the ISA but not much. 

I manage my own workplace pension (now an inactive member) and made a fair bit of money in US stocks and tech in the last few years. Did have some invested in a global tracker which made far less, Japan (made a bit), and emerging markets where I lost money over 5 years so I’m a bit reluctant to go back into emerging markets. Choice of funds available to select was pretty woeful though. OTOH I’m not seeing how the US / tech boom can continue indefinitely either but I’m still drawn there to a degree. 

I think I might put some into a global tracker and top my Vanguard funds up a bit. I’m still considering Asia though. 

You're in a similar situation to me, although you keep far more cash on hand than I do. I have the attitude that I can afford to take risk and I just dump money into US and Global (ex US) trackers whenever I can. I stopped trying to predict markets in any way a long time ago and so essentially just buy the cap weighted global economy. So either spend your 12k, give it to charity or family members or buy the Vanguard Global Equity inside your ISA...you definitely have an enviable "1st world problem".

VNX

kjs31 said:

Thanks for the suggestions. For context I have just retired but don’t intend drawing down from my pension until next tax year for tax reasons. I have a relatively large pension pot (£1.3M) plus a small DB pension paying out next year, no debt and circa 500k in cash savings (I prefer the comfort factor of having a largish chunk in cash). I have a full state pension entitlement when the time comes (in a few years). My total S&S ISA is 105k currently so the 12k is a small part of it. I have a few small investments outside of the ISA but not much. 

I manage my own workplace pension (now an inactive member) and made a fair bit of money in US stocks and tech in the last few years. Did have some invested in a global tracker which made far less, Japan (made a bit), and emerging markets where I lost money over 5 years so I’m a bit reluctant to go back into emerging markets. Choice of funds available to select was pretty woeful though. OTOH I’m not seeing how the US / tech boom can continue indefinitely either but I’m still drawn there to a degree. 

I think I might put some into a global tracker and top my Vanguard funds up a bit. I’m still considering Asia though. 

Good on you! But with a huge pension like this I wouldn’t worry where you put 12k! 

kjs31

Bostonerimus1 said:

You're in a similar situation to me, although you keep far more cash on hand than I do. I have the attitude that I can afford to take risk and I just dump money into US and Global (ex US) trackers whenever I can. I stopped trying to predict markets in any way a long time ago and so essentially just buy the cap weighted global economy. So either spend your 12k, give it to charity or family members or buy the Vanguard Global Equity inside your ISA...you definitely have an enviable "1st world problem".

I only really have that much cash as I was moving house and hadn’t found the right property so wasn’t sure how much money I would end up spending. I now have quite a lot in 12 / 18 / 24 month bonds much of which is returning over 6%. I might move a bit more cash into investments but with decent interest rates at the mo it’s not a priority, although there are immediate tax implications with the interest of course. 

I think I’m going to buy into a global tracker and put more into the US. I do donate some to charity already but plan to also give some of my time now that I’m retired. 

Family members are all ok and don’t need the cash now. Niece and nephew at uni would probably just spend on clothes and beer respectively 😉. It also doesn’t do them any good absolving them from the responsibility of earning any money whilst at uni IMO (especially given the length of the holidays). 

kjs31

kempiejon said

Well that puts a different spin on in it. It doesn't really matter much were you invest it with that much already in play. You have a fair portfolio and pensions. I assume this money has always been part of the retirement plan? 

I guess you've retired because you've done the sums and can afford it. You no longer need to focus on accumulating. 

Perhaps now is the time in your investing timeline to think of other things, legacy, philanthropy and indulgences.

I’ve never really paid much attention to my investments outside my pension TBH. I retired more because I started to find my job dull rather than because I could afford it. I probably could have retired a couple of years ago from a purely monetary perspective but was enjoying my work so carried on. Then there were some changes in my company that I wasn’t thrilled about so I decided to go. 

It’s interesting as ‘pension’ focussed people believe that the pension should be invested with the aim of achieving a well above inflation return. I intend to drawdown circa 3% from next year so I would be happy with an inflation level return as I probably won’t end up spending it all anyway, so not sure I want to take too much risk with the pension as I will never be able to top it up once retired.