17 year investment starting now

Albermarle

barnstar2077 said:

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. 

I think if you had a very cautious friend and you recommended them to but a 100% equity fund, and in 12 months time it was worth 30% less, you probably would not have a friend anymore. Also they would most likely panic and pull out at the bottom.
100% equity funds are a good strategy for some, but not for the faint hearted.

barnstar2077

Albermarle said:

barnstar2077 said:

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. 

I think if you had a very cautious friend and you recommended them to but a 100% equity fund, and in 12 months time it was worth 30% less, you probably would not have a friend anymore. Also they would most likely panic and pull out at the bottom.
100% equity funds are a good strategy for some, but not for the faint hearted.

I would discuss different scenarios with my friend beforehand, and how they would feel about markets going up and down.  If they couldn't get over their loss aversion then they would just have to expect (but not guarantee) lower performance in the long run.  The choice would be theirs.

A slightly different scenario, but I have a good friend who is with SJP (a company known to provide good customer service at a higher than average cost.)  Even after discussing it with him, he is happy to have them take care of his finances as he feels the service he is getting is good enough.  I can only respect his decision, all be it one that I think personally is a mistake.

Hoenir

barnstar2077 said:

Albermarle said:

barnstar2077 said:

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. 

I think if you had a very cautious friend and you recommended them to but a 100% equity fund, and in 12 months time it was worth 30% less, you probably would not have a friend anymore. Also they would most likely panic and pull out at the bottom.
100% equity funds are a good strategy for some, but not for the faint hearted.

I would discuss different scenarios with my friend beforehand, and how they would feel about markets going up and down.  If they couldn't get over their loss aversion then they would just have to expect (but not guarantee) lower performance in the long run.  The choice would be theirs.

The real art of investing is not to lose so much much in a downturn. Equities is a broad generalisation. Risk adjusted portfolio's are well diversified. There's where many retail investors trip up. Markets do indeed go and down. What frequently gets overlooked is that it's the reinvestment of income that does much of the heavy lifting in generating longer term returns. Not the indices themselves. 

thunderroad88

I think with a 17 year horizon I wouldn’t be worrying too much about small amount drip feeding. A global tracker fund is about 10% off its high…that is very probably somewhere between 0% and 50% from its bottom imo. You’ll never time the true bottom so I always tended to buy at least some on the way down to establish a position. I’d pick HSBC All World, put £25k in now (you’re already getting a decent price) and the rest in a STMMF with a view to putting in a couple of more hefty chunks at some point over the next few months as you see what develops wrt global reaction to tariffs. Then watch it go for 17 years…if it hasn’t made you a very decent profit in 17 years then something will have gone badly wrong and we’ll all be screwed.

barnstar2077

Hoenir said:

barnstar2077 said:

Albermarle said:

barnstar2077 said:

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. 

I think if you had a very cautious friend and you recommended them to but a 100% equity fund, and in 12 months time it was worth 30% less, you probably would not have a friend anymore. Also they would most likely panic and pull out at the bottom.
100% equity funds are a good strategy for some, but not for the faint hearted.

I would discuss different scenarios with my friend beforehand, and how they would feel about markets going up and down.  If they couldn't get over their loss aversion then they would just have to expect (but not guarantee) lower performance in the long run.  The choice would be theirs.

The real art of investing is not to lose so much much in a downturn. Equities is a broad generalisation. Risk adjusted portfolio's are well diversified. There's where many retail investors trip up. Markets do indeed go and down. What frequently gets overlooked is that it's the reinvestment of income that does much of the heavy lifting in generating longer term returns. Not the indices themselves. 

We've only just gone back and forth over this very topic recently Hoenir, so I will spare everyone the repetition.  Suffice to say, some people are trying to preserve wealth and others are trying to grow it over the long term.  

dannybbb

@thunderroad88 thanks - whats a STMMF? what is the advantage of hsbc all world over hsbc dynamic fund?

dannybbb

@Hoenir not losing too much in a downturn was my concern when essentially at the start of my investing journey.  Im hearing that most people consider this  irrelevant...

dannybbb

do you think theres any point in holding different hsbc funds as in some in hsbc balanced, some in dynamic and som ein hsbc all world?

kempiejon

dannybbb said:

@Hoenir not losing too much in a downturn was my concern when essentially at the start of my investing journey.  Im hearing that most people consider this  irrelevant...

Not losing too much in a downturn at the end of your investing journey as you start de-accumulating is the worry. Especially if the pot was to be cashed in for an annuity, that type of planning might move increasing amounts into bonds in the last 3-5 years.
If the thought of the value of ones investments going down at any point in the investing journey causes concern the equity market isn't a suitable place to be.

dannybbb

@kempiejon im ok with them going down  as long as by the timeI need it it has grown, if i move more to mods 5 years in advance of retiring  i will have 11/12 years to be in the equity market so its more that going in just before a crash might not leave me much to grow after a recovery was my thinking and what was making me hesitate at the moment.

And the money that is outside of the business, I was thinking about a house because it would give protection to the initial sum but more importantly some regular income to supplement my declining income - something im starting to see in my business and with Ai in the mix is only going to accelerate so the pension is one thing but creating some regular income in the shorter term is the other