Invest the £40k into Vanguard LS at one hit or filter it in

[forest172]

So just managed to get my cash ISA transferred into my Vanguard Acc. this week

So I`ve got a remaining £40k sat in the cash part, would people just buy £40k of the LS 60% at one hit or do it slowly over a period of time?

I did actually do £25k yesterday and decided against doing the whole £65k

[red_slr]

I have put £0 in my ISA since April. I am waiting till first week of November. Once we see what happens I might then look at it.

[Mattt]

red_slr said:

I have put £0 in my ISA since April. I am waiting till first week of November. Once we see what happens I might then look at it.

If Sterling collapses then you’d miss out on growth from overseas holdings then.

To the OP, I know several people who came out the market earlier this year as it was too risky but have missed out on huge gains.

What’s your investment horizon?

[red_slr]

Mattt said:

red_slr said:

I have put £0 in my ISA since April. I am waiting till first week of November. Once we see what happens I might then look at it.

If Sterling collapses then you’d miss out on growth from overseas holdings then.

To the OP, I know several people who came out the market earlier this year as it was too risky but have missed out on huge gains.

What’s your investment horizon?

Its true, I have just not added anything. So I still gain, or lose but just taking that 20k gamble.

[putonghua73]

Drip-feed over 12 months or longer to mitigate against potential downside i.e. buying at a fixed price and the market turning against you.

[SJfW]

I played this game just last November, also started a thread on here debating it, in the end I jumped in with both feet.

Down 6% within a month

Average in, definitely

[Mazinbrum]

red_slr said:

I have put £0 in my ISA since April. I am waiting till first week of November. Once we see what happens I might then look at it.

I don't know why you'd do that, I'm up 9% since April and your down the inflation rate since April. If you invest in the FTSE100 and the pound crashes you will be up, if you invest in the Global markets you'll get the gains unaffected by Brexit bar the currency conversions.

[btdk5]

SJfW said:

I played this game just last November, also started a thread on here debating it, in the end I jumped in with both feet.

Down 6% within a month

Average in, definitely

But surely you’re up by about 10% now? Which you wouldn’t be if you averaged in.....

[forest172]

I thought Life Strategy 60% from Vanguard was a worldwide mixed bag anyway

It`s money I`m not really bothered about until 15/20 years time. At the minute £50k in the LS60% with a £40k waiting to get put in. Only been into SS isa`s since July, was cash before that

[anonymous-user]

Morningstar explains,

• Pound Cost Averaging is a technique that reduces exposure to falling markets from investing a lump sum.
• By investing at regular intervals more shares are purchased when share prices are low and fewer shares are purchased when prices are high.
• The investor will be better off in falling markets.
• The investor will be worse off in rising markets.
• Instills a sense of investment discipline which avoids second guessing markets.

I generally invest a lump sum. For the last 100 years the overall market trend has been "upwards" so it seems to me that, on average, delaying investment will lead to lower returns. In order to take this approach you need to accept the risk of a possible nasty shock in the short term!

[red_slr]

Mazinbrum said:

red_slr said:

I have put £0 in my ISA since April. I am waiting till first week of November. Once we see what happens I might then look at it.

I don't know why you'd do that, I'm up 9% since April and your down the inflation rate since April. If you invest in the FTSE100 and the pound crashes you will be up, if you invest in the Global markets you'll get the gains unaffected by Brexit bar the currency conversions.

Its a gamble, that's why I want to do it. I mitigate inflation with 1.5% interest on the cash. Not 100% though, of course. Its a unique situation (Brexit) though, IMHO.

If you invested 20k in April and you are up 9% what fund is that, if you don't mind me asking?

[red_slr]

forest172 said:

I thought Life Strategy 60% from Vanguard was a worldwide mixed bag anyway

It`s money I`m not really bothered about until 15/20 years time. At the minute £50k in the LS60% with a £40k waiting to get put in. Only been into SS isa`s since July, was cash before that

If its 15-20 yrs then why not VLS100?

[forest172]

good advice guys

thought LS 60% was happy medium

suppose I could do the rest in LS100%, but then I may as well have gone for the LS80% overall

[SJfW]

btdk5 said:

SJfW said:

I played this game just last November, also started a thread on here debating it, in the end I jumped in with both feet.

Down 6% within a month

Average in, definitely

But surely you’re up by about 10% now? Which you wouldn’t be if you averaged in.....

Interesting question, just ran the numbers.

In reality, I lump summed my entire ISA allowance. So I excel’d a scenario for doing it in 4 monthly investments, to invest the entire allowance over the remaining 4 months I had in that year. Result was pretty much identical.

So, back to not feeling so bad about the lump sum, just wishing I had pulled the trigger a couple of weeks later!

[Mazinbrum]

red_slr said:

Its a gamble, that's why I want to do it. I mitigate inflation with 1.5% interest on the cash. Not 100% though, of course. Its a unique situation (Brexit) though, IMHO.

If you invested 20k in April and you are up 9% what fund is that, if you don't mind me asking?

S&P 500 UCITS ETF (VUSA)
Global Equity Income Fund - Accumulation
LifeStrategy® 80% Equity Fund - Accumulation

Not saying I recommend those, others have probably done better but it seemed liked a good spread.

[red_slr]

Interesting I hold almost all VLS100 (up about 8% from April) might look at the S&P one ta.

[TartanPaint]

The old saying is, "Time in the market is better than timing the market". Meaning over a large enough number of investments and a long enough period of time, there's no advantage to drip feeding. Getting all your money in sooner is better. Of course, any single investment could go either way, but trying to time the instalments isn't really investing, it's gambling.

Vanguard LS is supposed to be easy and cheap, so why overthink it? If you're going to time it and overthink and plot and plan, why bother with Vanguard LS at all? You've obviously got more appetite for risk that the average LS customer already. Why not stick £38k in Vanguard and £2k on red?

That's not advice, just an observation. For reference, I'm very poor.

[putonghua73]

red_slr said:

forest172 said:

I thought Life Strategy 60% from Vanguard was a worldwide mixed bag anyway

It`s money I`m not really bothered about until 15/20 years time. At the minute £50k in the LS60% with a £40k waiting to get put in. Only been into SS isa`s since July, was cash before that

If its 15-20 yrs then why not VLS100?

Up until 2000, equities generally outperformed bonds. From 2000 onwards, bonds have outperformed equities. See 'Credit Suisse Global Investment Returns Yearbook 2018'

Whislt the S&P500 may be on the longest bull-market (number of days) ever recorded in US history, the 2 crashes in 2001 [dotcom] & 2008 [financial crisis], in tandem with the accelerated decrease in Govt bond rates from the 1980s - as bond rates decrease, their price increases and vice versa - has seen bonds outperform equities over this period. Also, bonds have historically provided a greater cushion in falling markets - especially bear markets - compared to equities.

Don't let the tax tail (or inflation fear tail c1.5%) wag the principal dog i.e. don't let the fear of eroding principal through inflation dictate your investment strategy. I'd much rather take a small inflation hit over the next 12 months and drip-feed the principal into the fund, rather than invest a lump-sum in current market conditions and valuation levels.

FWIW, my advice is through the lens of a very bearish position, so YMMV.

[Stedman]

putonghua73 said:

Drip-feed over 12 months or longer to mitigate against potential downside i.e. buying at a fixed price and the market turning against you.

This and forget about it

[anonymous-user]

putonghua73 said:

the 2 crashes in 2001 (dotcom) & 2008 (financial crisis), in tandem with the accelerated decrease in Govt bond rates from the 1980s - as bond rates decrease, their price increases and vice versa - has seen bonds outperform equities over this period.

As ever, beware graphs with a dodgy starting point. 1 January 2000 is an extremely misleading date from which to measure the comparative performance of equities and bonds - because equities were at a highly unusual peak right at that instant. Share values had roughly doubled in just five years.

The effect of measuring from 1 January 2000 greatly flatters the bonds.