Vanguard advice

Trummelbach · 17 October 2018 at 10:18AM

Hi, I currently have £20k sitting in a cash ISA. I'm looking at transferring this to a Stocks/Shares ISA and investing in the Vanguard Lifestrategy 80 fund.

I have an additional £20k available which I'd be keen to add in monthly installments over the next few years after I've made the first £20k investment.

My question is this. Should I:

A. Invest the initial £20k as a lump sum?

B. Drip feed the initial £20k in over the next year or two?

C. Given that I'm not in a huge rush, wait for a correction in the market before investing anything.

For context, I'm in my 30s and have other cash savings and an emergency fund available. The investment will be left well alone for 15 years or more.

Am I right in thinking that taking out the investment through iWeb would be the cheapest option?

Many thanks for any advice.

chockydavid1983 · 17 October 2018 at 10:28AM

What I would do (not advice- I'll leave that to the pros :-) ):
A) Yes- you're in it for the long term so the more time in the market the better

Invest the next £20k in April- you're in it for the long term so the more time in the market the better
C) Generally, trying to time the market is futile- you could end up missing out on a lot of growth/ dividends before the next correction and it's hard to know where the market bottom will be or if it will even be lower than where we are now

iWeb will likely be the cheapest, or possibly with Vanguard direct:
http://www.comparefundplatforms.com/

Alexland · 17 October 2018 at 10:39AM

Historically the best answer for return would be to invest all the money straight away however if it makes you feel more comfortable (and less likely to initially see a large paper loss) you could invest it gradually. Still the markets might crash as soon as you have finished drip feeding it in. Ultimately it's your choice.

Yes with a lump sum single trade like £20k then iWeb would be cheaper than Vanguard Investor however if you intend to regularly contribute consider Halifax Share Dealing who charge £12.50 per year plus £2 per regular trade = £36.50 per annum which would be cheaper than Vanguard Investor's 0.15% after you exceed £24,333. By comparison iWeb would be 12x£5 per month = £60 per annum. Also iWeb have a £25 setup fee.

Alex

dunstonh · 17 October 2018 at 12:52PM

My question is this. Should I:

A. Invest the initial £20k as a lump sum?

B. Drip feed the initial £20k in over the next year or two?

C. Given that I'm not in a huge rush, wait for a correction in the market before investing anything.

A) if you want

if you want
C) you mean like the correction we have just had? If we have another correction in the short term then it will be a crash. Will you keep waiting for the next correction and how long will you wait. Are you going to wait until it goes up 20% and then down 10% before investing?

Statistically phasing results in lower returns in the majority of cases.
Timing the market is futile as you dont know when to time it.

Perhaps VLS80 is too high risk for you considering your questions which appear to be concerned about losses.

Zorillo · 17 October 2018 at 1:08PM

I've just placed my order for this year's dollop of VLS100 in my LISA and JISAs. I did stall a little to see if the "correction" got worse, and missed out on yesterday's gains as a result.

Alexland · 17 October 2018 at 1:43PM

Zorillo wrote: »

I've just placed my order for this year's dollop of VLS100 in my LISA and JISAs. I did stall a little to see if the "correction" got worse, and missed out on yesterday's gains as a result.

To make you feel better we won't tell you about what's going to happen tomorrow then!

The most accurate way I know to time the bottom of the market is when the associated MSE thread goes quiet and people run out of new or interesting things to say other than that they are just a bit worried in general.

Alex

BLB53 · 17 October 2018 at 1:57PM

For initial one-off lump sum cheaper with Halifax Share Dealing - £12.50 deal fee and £12.50 annual platform fee.

For drip feed probably best with Vanguard Investor as no dealing fees.

Alexland · 17 October 2018 at 2:07PM

BLB53 wrote: »

For drip feed probably best with Vanguard Investor as no dealing fees.

Not when you exceed a valuation of £24,333 as the 0.15% ends up costing more than the £36.50 (£12.50 plus £2 per regular trade) with Halifax SD.

Alex.

Trummelbach · 17 October 2018 at 7:07PM

Thank you to you all for your very prompt replies. Lots of food for thought.

Vanguard advice

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