First S&S ISA

[Janosh]

I've been reading the wealth of info from various threads and am ready to open my first S&S ISA.

I have £20k that I'm planning to invest in an 80% equities fund and I'm assuming a longterm horizon.

Given the current state of the market and potential volatility, would it be sensible to drip feed the funds over the course of the year or just lump it in and forget for the foreseeable?

Thanks in advance

[Jon39]

Janosh said:

.... Given the current state of the market and potential volatility, would it be sensible to drip feed the funds over the course of the year or just lump it in and forget for the foreseeable? ....

First - you are right to consider putting your savings into equities.
For more that 100 years, long-term equity holdings (parts of businesses) have been unbeatable.

Secondly - that performance has been achieved by holding continuously. Probably the majority, including 'experts' rewarded by fees using other peoples money, think they can 'time the markets', so are keen on activity (buying and selling). That introduces gambling.

Your question - you are effectively asking if we have a crystal ball. What the stock market will do this week, next week or this year, no one knows and those who do make forecasts, are either kidding themselves or others.
Investors have to accept there will always be downs and ups.
As for the current state of volatility - There is always uncertainty of some sort.
If you want to become a really serious equity investor, hoping to sometimes outperform the market average, learn as much as you can, then search for good solid businesses to buy shares in.

Good luck, be patient, don't use money you need to withdraw and don't panic sell during crashes. Really serious crashes are fairly infrequent, but it is just the time when the best businesses become better value and more attractive to investors.

Imagine some time in the future, when the news feeds are all about a record stock market crash, everyone appears to be selling, prices are tumbling every day, you (on paper) are losing thousands of Pounds, but you sleep well each night and looking for buying opportunities. That is the type of mind that you eventually need.

Edited by Jon39 on Wednesday 27th April 14:04

[Drew106]

Following with interest as I'm in the same boat. Looking to open my first S&S ISA, although I've not got a big lump sum. I've a safety net in my easy access savings, a small amount in Premium Bonds and no large purchases on the horizon, so I'm looking to set up a monthly transfer into a S&S ISA.

Any platform recommendations? I was planning to go with Vanguard, as I see it cited regularly for its low fees.

[greengreenwood7]

Each to their own. I'd say that certain stocks are pretty beaten down at present so prob a fair time to jump in with a decent proportion of your cash.
If it were me, i'd keep 10/15% back in case there#s a further dip/opportunity.

Depends to a degree what your stress levels are like ( in terms of seeing 'red' on your balance), what your time horizn really means, and whether you want to buy and forget about it all.

No idea about how funds look right now, as i made the decision to move away from that concept to just holding a few key companies for the medium/long haul. So what you're looking at may not have been so affected by recent macro events.

[toon10]

I'll add my thoughts since I was in the same position recently and I'm a complete noob at this finance stuff. I spent a lot of time looking into investing before doing anything about it and eventually settled on S&S ISA funds using Vanguard. I've upped my pension contributions and I have a years salary in Premium Bonds as my emergency fund. I've also cleared my debt apart from the mortgage.

To test the water, I've put £3k in which is spread across a few funds which I'm just monitoring before using my full allowance for the year '. The advice seems to be not to monitor the funds too often as they will be up and down daily. For reference, in the last couple of months my £3k investment has been worth a high of £3046 but currently sitting at £2933! I'm not worried as the theory is that it will beat inflation over the longer term when I need it. I plan to retire in maybe 12 to 13 years and in it for the longer haul.

I plan to put the rest of my allowance in but just want to get an idea of which of my funds are on the up more than down but again, they all vary and past performance isn't necessarily an indicator of future performance! (I'm a cautious person by nature.)

I have a LifeStrategy 80, VHYL all world and VUSA S&P 500 funds. It took me a while to pull the trigger so decided to dip my toes rather than go all in but I will be putting the remaining £17k in this year. My only problem is that I'm not sure whether to drip feed over the year or invest it all in one go. There seems to be mixed messages on this on YouTube and on the Internet.

Setting up Vanguard is easy if that's the platform you go with. There's YouTube videos on how to do it. I find the whole thing quite straight forward but the biggest part of the process is choosing what funds to invest in and making sure they are diverse enough. Time will tell whether my DIY approach has worked or if I should have paid some adviser to do it for me.

[AdamIM]

Janosh said:

I've been reading the wealth of info from various threads and am ready to open my first S&S ISA.

I have £20k that I'm planning to invest in an 80% equities fund and I'm assuming a longterm horizon.

Given the current state of the market and potential volatility, would it be sensible to drip feed the funds over the course of the year or just lump it in and forget for the foreseeable?

Thanks in advance

Drip feeding or DCA (dollar cost avg) is a sound strategy, particularly for new or risk averse investors. There is no absolute correct answer which method will yield the best returns. The psychological aspects can be profound sow whatever you choose you have to be able to manage your emotions.

What we do know is that history has shown, quality stocks/portfolios/funds do well over long time periods. Hope that helps.

[Jon39]

greengreenwood7 said:

Each to their own. I'd say that certain stocks are pretty beaten down at present so prob a fair time to jump in with a decent proportion of your cash.
If it were me, i'd keep 10/15% back in case there#s a further dip/opportunity.

Depends to a degree what your stress levels are like ( in terms of seeing 'red' on your balance), what your time horizn really means, and whether you want to buy and forget about it all.

No idea about how funds look right now, as i made the decision to move away from that concept to just holding a few key companies for the medium/long haul. So what you're looking at may not have been so affected by recent macro events.

Good man Mark.

Most forum posters here, including the financial advisers talk mostly about funds, pensions and some tax free thing probably involving fees, where your money is trapped until you are ready for pipe and slippers.

It sounds as though you prefer to spot individual business opportunities. It is the way to try to better market averages, but of course needs more initial effort to learn. My very first holding cost just £180, but after a year it showed me there are tremedous opportunities with equities. You have to be patient for many years, but I no longer have any money worries. Nearly all done with hold and keep shares. Having an exceptional time so far this year, +15% YTD (Index -1%), but that was totally unpredictable when about 5 holdings all rose strongly together. Can never tell beforehand, but investment luck comes along from time to time.

I have posted some bits recently which you might find interesting, including a few charts, on the 'Sitting on cash so where to put it?' Finance topic.

Best of luck.

[Somebody]

toon10 said:

I spent a lot of time looking into investing before doing anything about it and eventually settled on S&S ISA funds using Vanguard. I've upped my pension contributions

I plan to retire in maybe 12 to 13 years and in it for the longer haul.

If you're investing for retirement then why are you not putting the money in the Vanguard SIPP for the 25% top up on the amount invested in tax relief?

[greengreenwood7]

@Somebody - because maybe he's looked/factored in the tax implications - so as to minimize tax when wanting to draw funds.

[JagYouAre]

"Time in the market, not timing the market" is a good quote to remember for long-term investment.

Basically it is suggested that missing the best performance days in a market when trying to time investing in dips can cause significantly lower returns vs just investing from the outset and forgetting about it.

[Jon39]

JagYouAre said:

"Time in the market, not timing the market" is a good quote to remember for long-term investment.

Basically it is suggested that missing the best performance days in a market when trying to time investing in dips can cause significantly lower returns vs just investing from the outset and forgetting about it.

Exactly right.

What makes it especially valid, is the impossibility of anyone knowing when upward spurts are going to occur.

I began this year as usual, not having any idea how my portfolio would perform during 2022, but hoping that I might keep up with the market (whether it be positive or negative), and even perhaps be fortunate to have another annual outperform.

What a great surprise 6 weeks later, to see I was 15% up, whereas the index was negative YTD.
Five holdings had risen strongly in unison.

It just emphasises the importance of your post.

[Janosh]

A little update on my first S&S ISA... I've drip fed £15k so far over the last few months, it was almost 10% down at one point but currently sat around 2% up.

I strangely enjoyed watching the balance go down so I could buy some 'sale' units!

With time I just hope I can stop checking the balance so regularly.