S&S ISA investment advice PLEASE! 🙏

Darnhall123

I’m a complete novice when it comes to S&S investing, but I’m happy to take the advice from ‘experts’ that investing in a S&S ISA is a better return than a cash ISA if the saver is prepared to lock the money away for at least 5 years.
I have a cash ISA thats due to mature in the mid-December (around £24k) with Vida Bank. I was looking to open another cash ISA with Shawbrook who are currently offering. 5yr fix @ 5.25%, but open to investing it instead.
The problem (for me), is that the experts never tell you where to invest! I get it, that over the long term investing is a proven better return, but that’s all we’re told!
I’m hoping that someone will suggest a global tracker or something, but any advice would be gratefully received.
I have a T212 account so probably staying with them and I’d rather put it all into one fund if possible.
I’ll also add another £8k to it in April when the new tax year kicks off.
Can anyone make any suggestions please? (and I know there’s no guarantees… just wanting a bit of guidance).
Thanking you in advance!

El_Torro

You are already aware of global trackers so what’s wrong with that? Invest away. A multi asset fund will be less volatile, though also give a lower return over the long run.

You mention investing for 5 years or more. 10 years or more is a safer bet. Your investment will probably have a good return after 5 years, but it is a bit short term for equities, it might be worth less than what you started with. 10 years is more likely to give a good return, though as always with equities there is no guarantee.

eskbanker

The problem (for me), is that the experts never tell you where to invest! I get it, that over the long term investing is a proven better return, but that’s all we’re told!

The issue is that there's no simple one-size-fits-all answer as to what to invest in, and much depends on personal objectives for the money, together with timescales, risk tolerance, other assets, age, health, pensions, etc, etc.

'Buy and forget' global equity trackers and multi-asset funds are plentiful and low-cost/maintenance, and ought to suit most newbie investors but it's always important to research and understand the principles and pros/cons of investing rather than just looking for specific recommendations without significantly more detail of financial circumstances…

Darnhall123

https://forums.moneysavingexpert.com/discussion/comment/82180472#Comment_82180472

Thanks for your reply.
I’m 63 (65 in May 2028), and have always preferred the certainty of the guaranteed of a fix. I’m into year 4 of an existing Shawbrook 5.22% fix which matures Sept 2028 which will have around £103k in when I put £12k in it in April next year. The other £8k going into S&S ISA as previously mentioned.
The £24k is in Vida Bank and that matures mid-Dec (4.22% cash) and the one I’m possibly looking at investing along with the £8k that I now have to put into S&S because I’ll still be under 65 in April.
(Or do I stay safe and put it the £24k a new guaranteed 5.25% cash return after 5 years with Shawbrook??)

The only reason I’ve mentioned a 5 year investment term is to compare it with the Shawbrook 5yr fix.

Hope this makes sense??

Darnhall123

https://forums.moneysavingexpert.com/discussion/comment/82180448#Comment_82180448

Thanks El_Torro.
So even though I’m aware of global trackers (thanks to ML podcast), there seems to be loads! I don’t know which one to put my money into?! This is where I struggle. I’m also aware of S&P500 from ML, so is that a better bet?
This is why I’ve always opted for cash ISAs. Much more straightforward.
Any advice appreciated and if poss, available on T212.

eskbanker

…have always preferred the certainty of the guaranteed of a fix…

This may be a significant comment - investment returns are nothing like those of savings accounts, so you might find a five year period encompassing, say, -30%, +25%, 0%, +10%, -15%, and one of the key aspects of investing is how you'd react to that, which may be substantially different from how you think you'd react, when considering it in a more detached and abstract way.

El_Torro

I'll echo what eskbanker said: Getting a recommendation of what to invest in is one thing, doing your own research is much better though.

A couple of links to get you started:

https://monevator.com/best-global-tracker-funds/

https://monevator.com/passive-fund-of-funds-the-rivals/

Not to say that Monevator is the be all and end all of investing suggestions. It's not a bad place to start though. The articles give some tips on what to look for in a fund and the key differences to the more popular funds.

One thing to note: All global tracker funds are much of a muchness. They will have some differences but should perform more or less the same way.

I wouldn't invest all your money in the S&P 500, you were on a better track with a global tracker fund. The great thing about a global tracker fund or multi asset fund is that it invests globally. An S&P 500 fund only invests in the US, which is not diversified investing.

savit4l8er

I wouldn't necessarily place everything in the 500 but a good deal of the income some US companies make is not from the US, a portion of S&P 500 are multinational corporations which can be overlooked, better to say S&P invests in US companies but you still get a slice of action outside of the US. Look at Nvidia for example, a massive proportion of their income is from outside the US whereas you could find a European company might earn a vast portion from the US and be listed in a world tracker.

Its just something to consider, I wouldn't discount the S&P entirely, you can get some low fee offerings with it too.

Albermarle

https://forums.moneysavingexpert.com/discussion/6688056/s-s-isa-investment-advice-please

 that investing in a S&S ISA is can be a better return than a cash ISA if the saver is prepared to lock the money away for at least 5 years, although ideally 10 years +

Firstly I have modified your comment in italics

Global index funds are made up of thousands of larger company shares around the world, so if one or more companies do very well or badly, it should even out and the fund should follow the trend of stock markets around the world ( although mainly the US), whether they go up or down. As they are all quite similar the choice of which one is not that important in the great scheme of things. In the long term they would normally be expected to outperform cash savings, but there could be some dramatic see - sawing along the way, which is not liked by those of a more nervous disposition. For the more typical slightly more cautious investor, there are funds where the 100% equity in a global index fund is diluted, to reduce volatility, although the long term growth might be less. These are commonly referred to as multi asset funds, and are also popular for inexperienced investors looking for an easy solution.

Darnhall123

Thank you everyone. Certainly plenty to think about.

El_Torro - Thanks for the links, I’ll check them out.

👍👍

dunstonh

The problem (for me), is that the experts never tell you where to invest!

Who are you referring to as experts? The experts authorised to advise you are required to advise you where to invest. So, whoever you think these other experts are, perhaps they are not telling you as they are not experts.

I get it, that over the long term investing is a proven better return, but that’s all we’re told!

Again, that is not all you are told if you are speaking to an expert authorised to advise you.

The only reason I’ve mentioned a 5 year investment term is to compare it with the Shawbrook 5yr fix.

Why would you want to compare a global tracker over 5 years to a five year fixed rate? That serves no purpose. Since 1915, 5 year returns on global market cap trackers have provided a minimum annualised nominal return of minus 8% , a maximum of 30% and a median of 11%.

Cumulative nominal returns are minus 34% to 275% with a median of 68%.

I’m also aware of S&P500 from ML, so is that a better bet?

No. Martin Lewis's piece has slightly backfired on that front as he showed a chart that said long term but the period was not long term and the medium term period used was one that favoured the S&P500. The previous medium term period to that had the S&P500 as the worst performing fund mainstream area. This is why global is better as you have a bit of everything.