When should I stick £20k in my S&S ISA?

[FreeLitres]

I've got £20k sat in my current account which I'm keen to stick in my S&S ISA as it's not earning any interest and is getting eroded by ~10% inflation.

Is there a "right time" to dump this in? So I wait for a day when the market dips a little?

I read in another thread that they expect the markets to take a battering in the next few months with the energy crisis, QE and such. Is it better to just hold onto the cash for now?

[Simpo Two]

I'm holding fire.

[CrgT16]

Drip feed monthly and you will even out highs and lows or chance it and go for it. As the market stands if your want to be cautious then drip feed.

Personally I am doing 10 then six months later the other 10.

[Ryan_T]

I’m normally in VUSA / VUSD (hedging against currency), but out atm as it feels like we’re due for a crash. If I was you I’d probably put £1,700 in a month for the next 12 months, or even just eek it out over the next couple of years.

[Kickstart]

There is absolutely no way of knowing what the market will do

Hopefully in 20 years (if you have a long investment horizon) it really won't matter

Statistically it is said to be better to lump sum it but that can be difficult to do in practise - have a look at the Bogleheads wiki - its a good place to start

Good luck

[Simpo Two]

Ryan_T said:

or even just eek it out...

'eke'

Quite different from eeking

[FreeLitres]

It feels a bit like a rock and a hard place situation. The markets are volatile so you might lose a chunk in an S&S ISA or stick it in a "safe" savings account earning no interest and watch the buying power go down the pan while inflation runs rampant.

I like the idea of a drip feed so I have cash available should things start looking a bit shaky at work

[Caddyshack]

CrgT16 said:

Drip feed monthly and you will even out highs and lows or chance it and go for it. As the market stands if your want to be cautious then drip feed.

Personally I am doing 10 then six months later the other 10.

This is correct if you can be bothered with the hassle. Phased investing helps take the guess out.

I would also say, just get on and do it then forget about it and look again in 5-10 years. If there is a crash then pile in but you can never time the bottom or the top.

[glennjamin]

Depends on if your short or long term investment. FTSE 250 was at 24,000 this time last year bottomed out at 18,000. Now increasing today to 19,500. I'd be tempted to drip feed investment reducing risk. But as for when to jump in ? Maybe wait until New Year and see what the winter brings. Take a look at some graphs..

[duckson]

Is there a timescale for using the £20k or is there no real plans for it?

With interest rates rising a 1yr fixed savings account might be more attractive than previous, they might hit 4% in the next 2/3/4 weeks after the BoE meeting shortly (they are currently mid 3%'s).

[Jiebo]

duckson said:

Is there a timescale for using the £20k or is there no real plans for it?

With interest rates rising a 1yr fixed savings account might be more attractive than previous, they might hit 4% in the next 2/3/4 weeks after the BoE meeting shortly (they are currently mid 3%'s).

This is what I'm doing.

I've got about £60k in cash that I don't feel comfortable investing at the moment. If there is a risk free option for 4%, rather than a potential loss of 20% in markets, with an upside thats not going to be the same, I'd rather just stick it in a fixed savings account.

Mind you I will probably need the money in a few years. if I had a 10-15 year time horizon then I won't really care.

[Simpo Two]

duckson said:

Is there a timescale for using the £20k or is there no real plans for it?

With interest rates rising a 1yr fixed savings account might be more attractive than previous, they might hit 4% in the next 2/3/4 weeks after the BoE meeting shortly (they are currently mid 3%'s).

Which is a guaranteed loss in real terms

The problem is not just the state of the world but the disparity between inflation and savings rates.

But somebody will be making lots of money out of it, they always do.

[Caddyshack]

Jiebo said:

duckson said:

Is there a timescale for using the £20k or is there no real plans for it?

With interest rates rising a 1yr fixed savings account might be more attractive than previous, they might hit 4% in the next 2/3/4 weeks after the BoE meeting shortly (they are currently mid 3%'s).

This is what I'm doing.

I've got about £60k in cash that I don't feel comfortable investing at the moment. If there is a risk free option for 4%, rather than a potential loss of 20% in markets, with an upside thats not going to be the same, I'd rather just stick it in a fixed savings account.

Mind you I will probably need the money in a few years. if I had a 10-15 year time horizon then I won't really care.

Getting 4% with inflation over double means that there is no risk free savings account as you are sure to lose money (real term)

[Simpo Two]

Caddyshack said:

Getting 4% with inflation over double means that there is no risk free savings account as you are sure to lose money (real term)

There's no risk, you know exactly what you'll get - a loss in real terms. Risk is uncertainty.

[Caddyshack]

Jiebo said:

duckson said:

Is there a timescale for using the £20k or is there no real plans for it?

With interest rates rising a 1yr fixed savings account might be more attractive than previous, they might hit 4% in the next 2/3/4 weeks after the BoE meeting shortly (they are currently mid 3%'s).

This is what I'm doing.

I've got about £60k in cash that I don't feel comfortable investing at the moment. If there is a risk free option for 4%, rather than a potential loss of 20% in markets, with an upside thats not going to be the same, I'd rather just stick it in a fixed savings account.

Mind you I will probably need the money in a few years. if I had a 10-15 year time horizon then I won't really care.

Getting 4% with inflation over double means that there is no risk free savings account as you are sure to lose money (real term)

[Jon39]

FreeLitres said:

I've got £20k sat in my current account which I'm keen to stick in my S&S ISA as it's not earning any interest and is getting eroded by ~10% inflation.

Is there a "right time" to dump this in? So I wait for a day when the market dips a little?

I read in another thread that they expect the markets to take a battering in the next few months with the energy crisis, QE and such. Is it better to just hold onto the cash for now?

Cash in a current account, or cash in a S&S ISA would of course be no different for you.
I have cash building all the time in ISAs from dividend payments, so pay it in now and then you are ready to invest immediately you see opportunities. You can always draw it out (normally without charge) if required.

Trying to time markets is pointless. There is always some reason not to invest. The best time of course is during a market crash, but few people are brave enough and the really severe ones don't occur very often. March 2020 was the last perfect time to buy, but we thought humanity might come to an end at the time. I bought some holdings then and gave them to family. No need to give high price gifts, when you don't have to ! -

Edited by Jon39 on Monday 12th September 22:25

[Jiebo]

Caddyshack said:

Getting 4% with inflation over double means that there is no risk free savings account as you are sure to lose money (real term)

My personalised inflation rate is about 7%. There is a good calculator on BBC news.

Assuming I plan to use the money in 24 months.

The decision is then between a real 6% loss, versus a real risk of greater than 6% loss in equity markets. It’s very realistic to expect markets to fall by 20% and take years to recover, and me realising a loss of 14% due to inflation, plus another 10-15% from selling too early..

Buying stock only makes sense for investments over at least 5 years.

[Carbon Sasquatch]

Simpo Two said:

Caddyshack said:

Getting 4% with inflation over double means that there is no risk free savings account as you are sure to lose money (real term)

There's no risk, you know exactly what you'll get - a loss in real terms. Risk is uncertainty.

You don't even know that it will be a loss in real terms do you ? It somewhat depends where inflation is in a years time....

Inflation has been something like 10% in the last year vs a savings account promising 3-4% over the next year. Sure, if inflation is over 3-4% next year then you've lost out, but that's far from a certainty.

[Janosh]

TL:DR just invest it and be done

I had the same question a few months back and have since drip fed the £20k in random chunks. For what it’s worth, I’m a few quid up at the moment & the net result would largely be the same if I’d just put the lump sum in at the start.

My view is that I’m in for the long haul and therefore won’t stress about shorter term flux. I’m also assuming that I’ll add another £20k next year.

However if your total investment is going to be £20k then I’d probably drip it in at £1k a month and average out over a longer timeframe.

[SamR380]

I had a similar feeling earlier in the year and put my money into an S&S ISA. I wish I'd just bought a couple of old motorbikes. Your luck may vary.