Investment Advice

elltomney

What's the best investment route to take with around £20,000 capital?

Looking at Stocks and Shares ISAs with Vanguard and investing into S&P500 and FTSE, if this is a good idea, would it be better to drip feed monthly or lump sum investment?

Any ideas/advice welcome, thank you.

Mark_d

If the fund meets your needs and you feel the price is reasonable, then invest the while amount now.  If not, then find another fund.  Drip feeing means lots of money sitting in your current account earning no interest, so this is pointless.

elltomney

Mark_d said:

If the fund meets your needs and you feel the price is reasonable, then invest the while amount now.  If not, then find another fund.  Drip feeing means lots of money sitting in your current account earning no interest, so this is pointless.?

Thanks Mark, do you think those two are good funds to invest in? And/Or do you recommend any other funds or investment ideas?

dunstonh

Looking at Stocks and Shares ISAs with Vanguard and investing into S&P500 and FTSE, if this is a good idea, would it be better to drip feed monthly or lump sum investment?

You don't say which FTSE but the shorthand typically refers to FTSE100.    So, splitting it between S&P500 and FTSE100 would not be a good idea.  That would be poor quality investing.

Statistically investing the lump sum at the start beats phasing in around 3/4 of periods.

elltomney

dunstonh said:

Looking at Stocks and Shares ISAs with Vanguard and investing into S&P500 and FTSE, if this is a good idea, would it be better to drip feed monthly or lump sum investment?

You don't say which FTSE but the shorthand typically refers to FTSE100.    So, splitting it between S&P500 and FTSE100 would not be a good idea.  That would be poor quality investing.

Statistically investing the lump sum at the start beats phasing in around 3/4 of periods.

Thanks, yes I was thinking FTSE100 All World UCITS ETF and S&P500 as they both have very solid return rates every year, can you explain why it would be a bad idea to invest in both if they both have great consistent average yearly returns? Thanks

elltomney

elltomney said:

dunstonh said:

Looking at Stocks and Shares ISAs with Vanguard and investing into S&P500 and FTSE, if this is a good idea, would it be better to drip feed monthly or lump sum investment?

You don't say which FTSE but the shorthand typically refers to FTSE100.    So, splitting it between S&P500 and FTSE100 would not be a good idea.  That would be poor quality investing.

Statistically investing the lump sum at the start beats phasing in around 3/4 of periods.

Thanks, yes I was thinking FTSE100 All World UCITS ETF and S&P500 as they both have very solid return rates every year, can you explain why it would be a bad idea to invest in both if they both have great consistent average yearly returns? Thanks

Sorry I meant, FTSE ALL WORLD and S&P500 not FTSE100 ALL WORLD. Thanks

AlanP_2

FTSE can be meant one of two ways:

1) The London Stock exchange indexes e.g FTSE100, FTSE 250 which are the largest 100 or largest 250 companies listed in the UK. Typically the UK business names you will be familiar with e.g Unilever, Shell, BT etc.

2) FTSE all devise and maintain indexes for lots of other markets e.g. FTSE All World as you mention above.


Saying you are considering a FTSE investment, asper your first post, has been taken to mean FTSE 100.

Choosing just the UK largest 100 companies and the 500 largest US companies would not be great investing as you are betting on those geographies doing well over the next n years (whatever your time-frame is).

FTSE All World covers a much broader range of companies, including those 500 in the S&P500. So why would you want to double down on those 500?

A simple global tracker is so much easier and avoids you trying to work out what the best geography / industry / companies will be over your n years.

Take a look at the documentation for the fund you are interested in and see what it invests in, this will help you to decide if it meets YOUR needs as we can't answer that for you.

elltomney

AlanP_2 said:

FTSE can be meant one of two ways:

1) The London Stock exchange indexes e.g FTSE100, FTSE 250 which are the largest 100 or largest 250 companies listed in the UK. Typically the UK business names you will be familiar with e.g Unilever, Shell, BT etc.

2) FTSE all devise and maintain indexes for lots of other markets e.g. FTSE All World as you mention above.


Saying you are considering a FTSE investment, asper your first post, has been taken to mean FTSE 100.

Choosing just the UK largest 100 companies and the 500 largest US companies would not be great investing as you are betting on those geographies doing well over the next n years (whatever your time-frame is).

FTSE All World covers a much broader range of companies, including those 500 in the S&P500. So why would you want to double down on those 500?

A simple global tracker is so much easier and avoids you trying to work out what the best geography / industry / companies will be over your n years.

Take a look at the documentation for the fund you are interested in and see what it invests in, this will help you to decide if it meets YOUR needs as we can't answer that for you.

Thanks Alan, I haven't invested before so I don't know what MY investment needs/wants are.

What is a good example of a simple global tracker?

And out of the two, FTSE All World / S&P500 what would you say is better to invest in? Thanks

dunstonh

And out of the two, FTSE All World / S&P500 what would you say is better to invest in? Thanks

The S&P500 has been very good over the last decade due to US tech companies.   However, many consider tech to be in a bubble and tech is prone to high volatility.    The decade at the start of the millennium, it was the worst place to be by a long way.    So, you shouldn't look at short term returns and think that they are the norm.       The first decade of the millennium, the S&P500 was negative over 10 years.  US equity wasn't the place to be.   So, a lot of what you have had recently is that negative period bouncing back.  

Global is by far more sensible as you are not putting all your eggs in one basket.

elltomney

dunstonh said:

And out of the two, FTSE All World / S&P500 what would you say is better to invest in? Thanks

The S&P500 has been very good over the last decade due to US tech companies.   However, many consider tech to be in a bubble and tech is prone to high volatility.    The decade at the start of the millennium, it was the worst place to be by a long way.    So, you shouldn't look at short term returns and think that they are the norm.       The first decade of the millennium, the S&P500 was negative over 10 years.  US equity wasn't the place to be.   So, a lot of what you have had recently is that negative period bouncing back.  

Global is by far more sensible as you are not putting all your eggs in one basket.

Thanks, so based off of that FTSE ALL WORLD would be a better option?

Im looking long term so 25-30 years, and i saw that the S&P has averaged 10.733% over the last 30 years, so thought it would be a wise investment choice.

dunstonh

elltomney said:

dunstonh said:

And out of the two, FTSE All World / S&P500 what would you say is better to invest in? Thanks

The S&P500 has been very good over the last decade due to US tech companies.   However, many consider tech to be in a bubble and tech is prone to high volatility.    The decade at the start of the millennium, it was the worst place to be by a long way.    So, you shouldn't look at short term returns and think that they are the norm.       The first decade of the millennium, the S&P500 was negative over 10 years.  US equity wasn't the place to be.   So, a lot of what you have had recently is that negative period bouncing back.  

Global is by far more sensible as you are not putting all your eggs in one basket.

Thanks, so based off of that FTSE ALL WORLD would be a better option?

Im looking long term so 25-30 years, and i saw that the S&P has averaged 10.733% over the last 30 years, so thought it would be a wise investment choice.

Except you are a UK investor who lives in a Sterling world, and you suffer exchange rate fluctuations.    The global equity trackers will have around 69% US equity anyway.  

Be wary of how much recent returns makes the S&P500 look better and how things have a habit of returning to norm.
Two charts below.    The left one show the first 10 years of this millennium.  It follows a similar spike in tech.  Green is global. Blue is S&P500 (GBP).  The right one shows 1998 to date and you will see not a lot of difference in them until recent years where tech has bubbled again.    Global and US tend to cycle.  Going 100% into S&P500 now would be after the boom.   That boom could continue for another year or two or whatever but at some point it will burst and typically revert to norm.