Investing - Where to start?

Albermarle

LL_USS said:

Is it good to move to S&S now as the stock market is in trouble people selling out a lot at the moment?

Remember when people say this is definitely a good time to sell or buy, it is only an opinion, as nobody can see into the future.

Also when you say people are selling out, also remember that for every seller there has got to be a buyer.

Investment decisions are  best as part of a long term plan, and not based on anything happening today or tomorrow.

kempiejon

LL_USS said:

Is it good to move to S&S now as the stock market is in trouble people selling out a lot at the moment?

If you are of the opinion that S&S will outperform cash over the long term then invest and once you've started, invest regularly, every month for me. As another poster said, who's buying what those people are selling?

LL_USS

Thank you @eskbanker @Albermarle @kempiejon.

I've just seen my DC pot losing thousands in just a couple of days but I am not worried as it's only a bump and I won't access it for a long time. So yes I've been well-trained thanks for the wisdom in the forum that "time in the market not timing the market".

I have a load of LISAs that I need to turn into S&S now I am a bit more positive about "trying investing", after many years of sitting and watching. So my original plan is to move to S&S around this time at the start of the new fiscal year anyway. I opened a Dodl account about 4-5 months ago but already used up by allowance this year then and was not sure if I could transfer to Dodl without adding anything.

Now, as the new fiscal is starting, I have asked to transfer my LISAs into Dodl and I am waiting to invest. It is a bit extreme where the market is now, so I am a bit unsure, whether just to invest all, or drip the fund into the investment gradually, ignoring that it could be a good time to buy. But as I can see you guys saying here, it's a double edged knife, could be good, could be bad, so perhaps still better spreading out to spread the risk.

LL_USS

@eskbanker @Alexland and others. Sorry I still have more to ask, if anyone could give some idea please do?

I am thinking of getting the S&P500 as it has the lowest fee in the list Dodl displays. I plan just to leave the investments there for 12 years+, adding more when I add annual allowance of LISA in, and move all to cash funds a bit before I take out the money. My target is just to beat inflation and if it gets some good money, it's fine. I understand there's risk.

If you could shed some lights over the following questions it would be great please:

I am wondering if I should spread the risk by choosing another fund too (say, FTSE too)

The market is a bit funny at the moment, should I drip the investments in or just put most of the current pot (leaving some money for fee payment) into investment.

When I have, say 4K in, should I wait till the cash is a bit more, like 10K (after 2 years) to move to investment or any money in just put to investment right away? (I ask as I feel buying S&S each time may cost more????)

I don't see the options yet but I think the value of the investment pot(s) will be shown periodically or daily, but the main thing is it is just some number(s) until I sell them to turn into cash, is this right?

Sorry for asking very basic questions. I have tried to learn these over time from people here on the forum but am still quite nervous.

eskbanker

LL_USS said:

I am thinking of getting the S&P500 as it has the lowest fee in the list Dodl displays. I plan just to leave the investments there for 12 years+, adding more when I add annual allowance of LISA in, and move all to cash funds a bit before I take out the money. My target is just to beat inflation and if it gets some good money, it's fine. I understand there's risk.

If you could shed some lights over the following questions it would be great please:

I am wondering if I should spread the risk by choosing another fund too (say, FTSE too)

My starting position would always be to maximise diversification, by investing globally rather than trying to pick specific markets like the USA or the UK, so the obvious place to go would be either a global equity tracker or perhaps a multi-asset fund, covering all markets.

LL_USS said:

The market is a bit funny at the moment, should I drip the investments in or just put most of the current pot (leaving some money for fee payment) into investment.

When I have, say 4K in, should I wait till the cash is a bit more, like 10K (after 2 years) to move to investment or any money in just put to investment right away? (I ask as I feel buying S&S each time may cost more????)

Statistically it's better to invest as much as you can as soon as you can, rather than drip-feeding, although if you're using a platform with relatively high transaction costs that does eat into returns a bit.

LL_USS said:

I don't see the options yet but I think the value of the investment pot(s) will be shown periodically or daily, but the main thing is it is just some number(s) until I sell them to turn into cash, is this right?

Platforms will generally display the current value of your portfolio, updated close to real time, but yes, there is an important distinction between paper losses and actual crystallised ones.

Hoenir

LL_USS said:

I am thinking of getting the S&P500 as it has the lowest fee in the list Dodl displays.

First rule of investing when you are starting out. Diversify your portfolio.  Don't get sucked into what's hot and the fear out missing out syndrome. Over time you'll realise that there's always something performing better. Trades will come and go. That's the nature of markets.  Also currency plays a major part in the returns achieved. 

Opt for a broad multi asset fund that suits your risk appetite. Given the huge cloud of uncertainty at the moment.  Drip feed the money in over the next year. 

LL_USS

Thank you @eskbanker and @Hoenir

My pot is LISAs and for over 40s moving to S&S I think I don't have lots of options of transfers of cash LISAs in. For Dodl there are these options: https://dodl.co.uk/investments/themed

I did look for global equity but couldn't find in the first place, but looking again now I think it's probably this "On top of the world" one - HSBC FTSE All-World index fund (charge 0.13%). I heard before that SP500 the US ETF is good and I looked at it today as the fee (0.03%) is lowest among all these options.

I trust the wisdom of diversification - yet I still don't know whether it's more expensive to buy for e.g. 5K SP500, 5K Global equity, 5K FTSE100, 5K Vanguard FTSE 100 or Vanguard FTSE250 OR 10K global, 10K US.

I feel more comfortable with ETF than buying shares of a specific company/ specific companies.

I'll check around again as Hoenir says uncertainty time drip-feeding, eskbanker says all in. I know it's never straightfoward but I want to research around to see what seems to suit my case better. I have the fund ready in one bulk at the moment, anything not invested will receive just under 4.6% interest on Dodl platform.

Hoenir

LL_USS said:

I'll check around again as Hoenir says uncertainty time drip-feeding, eskbanker says all in. I know it's never straightfoward but I want to research around to see what seems to suit my case better.

Just to expand on my comment. The current uncertainies will have a negative effect on company profitability. On shoring for example is negative for US companies.  (Apple employs over a million people in China earning less than $2 an hour working 12 hours a day for 11 months of the year).  Ultimately it's company fundamentals that drive markets higher. More recently market momentum has been driven by cash chasing a small select group of global stocks.

eskbanker

LL_USS said:

I did look for global equity but couldn't find in the first place, but looking again now I think it's probably this "On top of the world" one - HSBC FTSE All-World index fund (charge 0.13%).

Yes, that's certainly a prominent global equity tracker, at a reasonable cost.

LL_USS said:

I heard before that SP500 the US ETF is good and I looked at it today as the fee (0.03%) is lowest among all these options.

I trust the wisdom of diversification - yet I still don't know whether it's more expensive to buy for e.g. 5K SP500, 5K Global equity, 5K FTSE100, 5K Vanguard FTSE 100 or Vanguard FTSE250 OR 10K global, 10K US.

It's important to understand that a global equity fund will include extensive exposure to the S&P500, plus some FTSE, so you'd only need to buy multiple funds if you weren't happy with a market cap-weighted fund reflecting the relative proportions of each market and felt the need to allocate based on different percentages, because of convictions about specific markets, etc.

LL_USS said:

I'll check around again as Hoenir says uncertainty time drip-feeding, eskbanker says all in.

There's no right or wrong answer but my view is based on the fact that investments will generally rise, which is of course why we buy them, and therefore on average there should be more up days than down ones, and so the more of those you miss, the worse your returns will be.  The standard adage is 'time in the market, not timing the market', reflecting the fact that it's rarely possible to buy in at the bottom of dips and sell at peaks, so in the absence of any unique insight into optimal timings, it's best just to get on with it.

At the time of posting, the major markets are all starting to move back up again (S&P500 +3.7%), but nobody knows whether that's the start of a recovery or a 'dead cat bounce'....

Hoenir

eskbanker said:

At the time of posting, the major markets are all starting to move back up again (S&P500 +3.7%), but nobody knows whether that's the start of a recovery or a 'dead cat bounce'....

A reflection perhaps that many still think Trump is right and is winning the battle. Nor that anything has fundamentally changed. With no CEO's of major US corporations yet to put their heads above the parapets to express their own business opinions. .