Thoughts for simple investment ISA?

ScarletBea

I don't know if you care or not, but it might be good to check the main holdings of the fund you choose.
Recently I sold my Fidelity UK Tracker because I realised it had investments in BP, Shell and other fossil fuel companies...

truescot

Resurrecting this thread now that it's the new financial year and given the turmoil in the markets at the moment. I've got this years £20k ISA allowance ready to go, but as a new investor I'm just having a wee wobble due to the current state of affairs and even some talk of a global recession/depression. I had set my mind on the fairly standard HSBC Global Balanced Portfolio (via iWeb) to dip my toes in, but I also wondered whether putting it temporarily in the Plum cash ISA with its 3 months introductory rate of 5.92% might give me time to just get some indication of what's happening in the markets, with the potential to open the iWeb ISA later. I realise there is no crystal ball and investing is for the long term (probs 10 years ish for me)  but any others in my position and getting cold feet, or any comments? Be gentle 🤣

masonic

I don't think the future will be any clearer in 3 months time, so the sensible choices (assuming you still want to invest) are to push in this lump sum at the best price we've had for over a year, or drip-feed it to hedge against things getting worse. The letter option is what I'd probably do, but I wouldn't do it over more than a few months.

truescot

masonic said:

I don't think the future will be any clearer in 3 months time, so the sensible choices (assuming you still want to invest) are to push in this lump sum at the best price we've had for over a year, or drip-feed it to hedge against things getting worse. The letter option is what I'd probably do, but I wouldn't do it over more than a few months.

Out of interest, what makes you say things won't be any clearer in the next 3 months? In terms of the current unpredictability/volatility. And if I do decide to go for it (likely)  what's the benefit of drip feeding over a few months as opposed to what I suggested above?

masonic

If markets recover, they could fall again. If they remain flat then a recession could still be just around the corner. Even if they continue falling, things could get worse. There is always a reason not to invest.

If you wait 3 months, then apart from reducing your time in the market, what have you achieved? A 1.5% uplift in your £20k, sure, but you'll have nothing invested during this dip, which will only be a good thing if we proceed into a global depression (which is still rather unlikely IMHO)

Also with Plum and its interest forfeiture and need to transfer out, the maximum achievable rate is closer to 5.2%. See https://forums.moneysavingexpert.com/discussion/comment/81386791/#Comment_81386791