17 year investment starting now

MEM62

dannybbb said:

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. 

What event are you expecting that would make investing in the future better than investing now?   

dannybbb

@Linton its not invested at the moment, but it will be i was just holding out as i say but - hsbc balanced and dynamic funds probably.  im adding to it every month at least this year. My industry is very much under threat of Ai and things are looking bleak. Bad news is I have a lot of cash outside the business losing value to inflation, good news is i have some cash.
 Because of whats happening in my business im considering buying a property to help protect the value but also to provide some regular cash as I expect to be forced into a sort of semi retirement.

 I also have 300k in cash ISAs that i dont intend to touch. The sipp is there to help minimise tax in the last few good years, i will continue to add to it but probably not with the same kind of lump sumd, im adding 1000 er month at the moment

dannybbb

@MEM62 as i say its not what might be better in future but it just seems to me that in the immediate future there is unlikely to be large gains but a higher than normal chance of losses that might eat away at the time I have left to see any growth 

Im inexperienced  -  I read a lot about the stock marked being overvalued, and with the tarriff stuff and general state of the global economics it just struck me as worth waiting it out a little. I realise thats a gamble. too

dannybbb

@barnstar2077 out of interest how long before retirement would you  change from a global tracker. so despite the state of the world and stock market (high valuations and general economic instability)  - if i was putting in smaller amounts every month over a longer period i would be more likely to be able to invest and forget sbout it but feels like a !!!!!! decision with 80 at once at a difficult time - even at 10k over 8 months

dannybbb

@Hoenir a mix of hsbc balanced and dynamic global funds possibly

MetaPhysical

Equity allocation percentage of 100 minus your age is a good rule of thumb that is often quoted.  So if you are 59 then you'd have 41% equities.  If you're 30 then 70% equities.  However, there are some that now say it should be 120 minus your age. 

I'm 57 and have 60% equities and I won't drop lower than that.  Guys at work who are retiring are still 100% equities.  There is no hard fast rule and depends on how adventurous you are.

kempiejon

dannybbb said:.... -  I read a lot about the stock marked being overvalued, and with the tarriff stuff and general state of the global economics it just struck me as worth waiting it out a little. I realise thats a gamble. too

If you read some more you'll probably hear that time in the market is generally considered better advice than timing the market. Daily, weekly, monthly the stock markets fluctuates quite a bit but the trend has been upwards. 
Perhaps what you have been reading is opinion pieces written by journalists or commentators who's job is to sell copy and drive traffic or just uninformed chatter. Perhaps some academic studies of the markets or long term histories of investing might be a better place for your research. I see is as cash loses to inflation, equities have shown better return.
For some investing is hard, staying in cash is comfortable because the numbers never change however spending power is diminished. Today interest rates are above inflation so this is not a terrible time to be in cash if you're on good rates.
As another thought if you have £300k cash in an isa and you're adding a £1k per month to the SIPP to get the tax back you could collect even more tax if you contributed the total of your income to a SIPP and spent some of the cash to live on. That way you keep your assets sheltered for now and the government effectively pays you back all the tax you paid plus a bonus of around £2500, the 20% claimed back on unpaid tax on the personal allowance.
You'd still have a problem of where to invest but you maximise your tax rebate.

barnstar2077

dannybbb said:

@barnstar2077 out of interest how long before retirement would you  change from a global tracker. so despite the state of the world and stock market (high valuations and general economic instability)  - if i was putting in smaller amounts every month over a longer period i would be more likely to be able to invest and forget sbout it but feels like a !!!!!! decision with 80 at once at a difficult time - even at 10k over 8 months

The "to drip feed or not to drip feed" argument has been discussed to death for years.  But bottom line, you invest because you expect markets to go up, so the longer you are in the market the better.  Yes, you could be a little bit unlucky and put everything in and get a drop the next day, but even then it will be a tiny blip over a 17 year period.  As I said, just put all the money in and make regular contributions.

I am planning on staying 100% global equities into retirement, for reasons I have outlined here:

High risk, high reward: A pauper's dream of early retirement. — MoneySavingExpert Forum

However, if a very cautious friend asked me, I would tell them to stay 100% globally diverse equities until they were ten years out.  Then, when they were ten years out, to slowly (over the course of the next five or so years) to change over to a 60/40 split.  Then at retirement, they would have the option of buying an annuity, or going into drawdown, with a pool of less volatile money to draw from, while also keeping 60% invested for the future.

Personally, I am trying to do what I think will give me the best final outcome while trying not to become emotionally invested in the ups and downs. 

Linton

dannybbb said:

@Linton its not invested at the moment, but it will be i was just holding out as i say but - hsbc balanced and dynamic funds probably.  im adding to it every month at least this year. My industry is very much under threat of Ai and things are looking bleak. Bad news is I have a lot of cash outside the business losing value to inflation, good news is i have some cash.
 Because of whats happening in my business im considering buying a property to help protect the value but also to provide some regular cash as I expect to be forced into a sort of semi retirement.

 I also have 300k in cash ISAs that i dont intend to touch. The sipp is there to help minimise tax in the last few good years, i will continue to add to it but probably not with the same kind of lump sumd, im adding 1000 er month at the moment

Apart from nervousness about price fluctuations the main reason for not going for 100% equity is that your plans could be disrupted in the short term if there is a market crash.  In your case with £300K in cash you can simply wait until values increase. A crash would have no short term effect on your ability to pay your bills.

In retirement you will need a financial management strategy.  A common one is to keep a number of years in cash, again to cover large falls in your investments.  If your strategy is to hold 5 years expenditure in cash then it makes sense to start building this cash pot 5 years prior to retirement. 

Their are better/cheaper options than buying a house to safeguard your money. If you were thinking of renting it out the view commonly expressed here is that one house does not make much sense because of the ongoing costs,  tax treatment and risk of tenants stopping paying the rent. Another problem is liquidity: you cant sell a small part of a house should you just need a bit more cash and the selling process could be expensive and take a significant amount of time.
 

MEM62

dannybbb said:

@MEM62 as i say its not what might be better in future but it just seems to me that in the immediate future there is unlikely to be large gains but a higher than normal chance of losses that might eat away at the time I have left to see any growth 

Im inexperienced  -  I read a lot about the stock marked being overvalued, and with the tarriff stuff and general state of the global economics it just struck me as worth waiting it out a little. I realise thats a gamble. too

You cannot time the market.  If you are ready to invest, then invest.  There will always be global events having an impact.  If you wait for some certainty or a better climate you will be waiting forever.