17 year investment starting now

dannybbb

I commented on this elsewhere recently but cant find the post, Im keen to get the 80K I have invested (its already in a SIPP) I have 17 years until I retire and am late to investing.

With a shorter time horizon and with the current instability / high valuation, Im feeling like I should wait a little to see how things pan out with the tarriffs etc in trumpland. I realise its not a good idea to time the market and that no one else knows what will happen  but given my late start and large ish amount of initial investment I feel like It might be sensible to give it a few months and see what happens. 

I intend to invest in a global tracker as I dont have the knowledge or experience to do otherwise but any advice given my age and amount to invest. Im not looking for specific advice on where to invest but more broadly about how to deal with my shorter time horizon, 

thanks

molerat

https://forums.moneysavingexpert.com/discussion/6590043/bonds-gilts/p1

kinger101

If it were me,my investment strategy at 17 years out would be the same as 40 years out.   100 percent global equities via low cost tracker. Last 10 years is when things might change, but that rather depends on other circumstances.  And when I thought I might be 10 years out.

What other fixed income do I have?
How does my plan dovetail with OH?
Would I consider an annuity for done or all?
How happy am I in my job?
Is there a mortgage that needs repaying.

As for going in with 80K or waiting, history says on average now is the best time.  But you could drip feed over a period of time to hedge your bets.   

dannybbb

@kinger101 Thanks for the reply. Was less worried about all in or drip feeding, although I suppose its the same issue, rather that things seem at least to me to be quite volatile with what seems like more possibility for a bigger drop, My inexperience says, if youre going to put it all in at once then the chances of some small growth seem less likely than a big drop and with that in mind waiting a little see,s like a good idea 

barnstar2077

Put it in a globally diverse tracker asap, keep adding to it and try not to think about it too much.  They go up and down, but you are so far from needing the money it isn't worth worrying about.

You may want to give some consideration to keeping your charges under control as well.

DRS1

dannybbb said:

@kinger101 Thanks for the reply. Was less worried about all in or drip feeding, although I suppose its the same issue, rather that things seem at least to me to be quite volatile with what seems like more possibility for a bigger drop, My inexperience says, if youre going to put it all in at once then the chances of some small growth seem less likely than a big drop and with that in mind waiting a little see,s like a good idea 

Finding the perfect time to stick it all in your chosen investment is going to be pure fluke.  The drip feeding suggestion is a good one - just pick a figure (£10k a month say) and invest that each month.

Gary1984

Units in a global equity tracker are about 12% cheaper than they were a few months ago so it seems like a good time to invest. Was your plan to wait until they go back up in price? Yes they might drop further but with 17 years to go I'm not sure it matters much. 

If I were you I would:
1) Invest in a globally diversified, low cost 100% equity index tracker fund
2) Keep investing new money into it monthly. Use salary sacrifice if your job employer allows. 
3) Use a portion of any salary increase to increase your contributions before you get too used to the money.
4) Try and forget about it once you've set it up. Check in annually perhaps.
5) Check your state pension entitlement.

dannybbb

im self employed bit am putting in 1000 per month in addition to the 80 thats there and may add in other lump sums. iwould you suggest less equities 10 years before retirement ( in 7 years?)

Linton

dannybbb said:

I commented on this elsewhere recently but cant find the post, Im keen to get the 80K I have invested (its already in a SIPP) I have 17 years until I retire and am late to investing.

With a shorter time horizon and with the current instability / high valuation, Im feeling like I should wait a little to see how things pan out with the tarriffs etc in trumpland. I realise its not a good idea to time the market and that no one else knows what will happen  but given my late start and large ish amount of initial investment I feel like It might be sensible to give it a few months and see what happens. 

I intend to invest in a global tracker as I dont have the knowledge or experience to do otherwise but any advice given my age and amount to invest. Im not looking for specific advice on where to invest but more broadly about how to deal with my shorter time horizon, 

thanks

When the effect of the tarriffs stabilises, which could be say 5 years away, there is going to be something else happening.    If you want to invest start now, not neccesarily all at once but say £10K every few months.

You say the £80K is already in a SIPP.  What is it invested in?  If it is in cash you are losing value continuously because of inflation.

Do you need the SIPP as a major source of income in retirement? During the next 17 years are you  planning to contribute a lot more money into your SIPP?  17 years is a reasonable time frame for investment and your current £80K would generate perhaps £3K/year so not a life changing amount.

Hoenir

dannybbb said:

I intend to invest in a global tracker as I dont have the knowledge or experience to do otherwise but any advice given my age and amount to invest. Im not looking for specific advice on where to invest but more broadly about how to deal with my shorter time horizon, 

With a shorter time horizon a more diverse multi asset fund may well be a better option. High risk strategies historically don't outperform by as much as people appreciate. Perceptions have been heavily influenced by the events in the post GFC era. An era that won't be repeated for a very long time. Investing is cyclical. A roller coaster ride of up's and down's. 

ali_bear

dannybbb said:

would you suggest less equities 10 years before retirement ( in 7 years?)

That depends on what you intend to do at retirement.

If you were going to convert all the investment into an annuity then it would be advisable to guard against a low stock market valuation at that time by diversifying to less volatile investments in the years running up to. But not many people do that these days. More likely is you will take out some or all of the TFLS at retirement and then start drawdown on the remainder. Thanks to the modern pension flexibility you can choose when to cash in the stock market based investment.