Stocks & Shares Advice

KrisP87

Hi - looking for some advice/tips.

I am 37 years old, I have £23,000 in savings and I have just set up a stocks and shares ISA (s&p500 VUSA) and I will be contributing £600 a month to this. I am contributing the maximum amount into my workplace pension and I have £105,000 left on my mortgage.

My questions are should I solely focus on only making the ISA contributions each month or should I be overpaying on mortgage as well and reduce my contributions to the ISA each month? 

What is a realistic expectation on the s&p500 growth and am I investing in the right fund?

Thanks, Chris 

dunstonh

My questions are should I solely focus on only making the ISA contributions each month or should I be overpaying on mortgage as well and reduce my contributions to the ISA each month? 

Depends on your capacity for loss.   Other options also come into play like the pension tax wrapper which beats ISAs for most people as long as the money is long term - and at 37 with a high risk strategy that could require you to be invested for decades, the pension wrapper may well be better.

Going into an option with around 50-60% loss potential suggests you have plenty of savings and can afford the losses.   Unless you are underestimating the risk and only looking for a recency and not the long term.

What is a realistic expectation on the s&p500 interest and am I investing in the right fund?

There is no interest on S&P500 trackers.  There is not much in the way of dividends either and if this is the only fund you have, then no, you are not invested correctly.    

Albermarle

It is usually recommended to be more diversified. If you have a high risk tolerance and are investing for the long term, then a global index fund is usually the goto. It is still around 60/65% US stocks, but not 100% like you are now.

Have you looked into how your pension is invested? Is that also 100% equities ?

tacpot12

KrisP87 said:

...
My questions are should I solely focus on only making the ISA contributions each month or should I be overpaying on mortgage as well and reduce my contributions to the ISA each month? 

...

Really this depends on what return you expect from VUSA and what interest you are paying on your mortgage, bearing in mind that you need to have a realisic idea of what the worst return of VUSA might be over the time period you plan to invest in. 

If you are paying 2% pa on your mortgage and you expect VUSA to return 8% pa over your expected investment term, it's easy. Don't pay off your mortgage, focus on maximising what you can pay into your ISA. But if you're paying 5% pa on your mortgage and this is fixed for a long time, and you are only expecting VUSA to return 6% pa, it's a much closer call. There is a risk that VUSA won't do as well as you had hoped and then, paying something off the mortgage would have been a better deal.

If it were me, I'd probably invest in the ISA, but keep an eye on performance and mortgage rates. 

Eyeful

As far as investing part of your question.
1. You should use tax shelters when available:
Pensions for very long term investing. You get "free money" & pay no tax at least until you withdraw from it.
Stocks & shares ISA: for long term investing lets say 10 years at least.
Cash ISA: Any money you may need within 5 years should be in a savings account.

"Am I in the right fund"
2. First watch this: 
 https://www.kroijer.com/
Then consider if a passive low cost Global Index Tracker Fund or ETF is suitable.
 https://monevator.com/best-global-tracker-funds/
For more control consider a passive low cost Global Multi Asset Fund with a share/bond split you are happy with.
Example:- https://www.hsbc.co.uk/investments/products/hsbc-global-strategy-portfolios/#balanced
https://monevator.com/passive-fund-of-funds-the-rivals/

3. "Should I overpay my mortgage?"
 That is a personal choice. I am not you & no one can foretell the future.