FTSE100 tracker
Discussion
Ari said:
Almost reduced to £1,000 down
You contributed and withdrew £20,855.00
Your investments returned you ?£1,194.20
You ended up with £19,660.80
Your rate of return is -10.24%
Still thinking long term...
A sudden and unexpected jump in three days! You contributed and withdrew £20,855.00
Your investments returned you ?£1,194.20
You ended up with £19,660.80
Your rate of return is -10.24%
Still thinking long term...
You contributed and withdrew £20,855.00
Your investments returned you −£556.47
You ended up with £20,298.53
Your rate of return is -4.80%
Getting very close to breaking even - for now at least!
Okay so, here is the million dollar question (and I appreciate that no one can answer it, but interested in thoughts/opinions).
I'm now seriously considering buying a bigger house next year. If I do, I'd rather cash out of this and put it toward buying the house (because it seems nonsensical to me to borrow money to invest - which effectively what I'd be doing. Every pound in investment instead of in the house is a pound extra borrowed instead).
So, if it does break even tomorrow, do I cash it all out and put it in the 'going to buy a house' fund?
Point is, if I am going to use this (plus savings plus a mortgage plus value of current house) next year, then this is no longer a long term strategy, and arguably therefore a bad place for what has just become short term savings.
I'm now seriously considering buying a bigger house next year. If I do, I'd rather cash out of this and put it toward buying the house (because it seems nonsensical to me to borrow money to invest - which effectively what I'd be doing. Every pound in investment instead of in the house is a pound extra borrowed instead).
So, if it does break even tomorrow, do I cash it all out and put it in the 'going to buy a house' fund?
Point is, if I am going to use this (plus savings plus a mortgage plus value of current house) next year, then this is no longer a long term strategy, and arguably therefore a bad place for what has just become short term savings.
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hstewie said:
hstewie said: The FTSE or any 100% equities investment isn't the place to be for money you need in a years time IMO.
Simply put if you have £100 in there today how would you feel if you see your dream home and there's only £65 in there?
Dial the risk down if you need to be sure your original capital is preserved.
Simply put if you have £100 in there today how would you feel if you see your dream home and there's only £65 in there?
Dial the risk down if you need to be sure your original capital is preserved.
Kind of my thinking, thanks.
I'm actually thinking, take half out, that way it halves any potential losses without removing me completely from any gains.
NickCQ said:
I think traditional portfolio theory would say 'sell it all'. You don't have a long enough time horizon to deal with the volatility.
The alternative is to dollar cost average on the way out (i.e. sell £x per month) which de-risks you over time.
But... given just how cheap mortgages are likely to be, up to some low LTV (<50% maybe) it is tempting to try and play for a bit of spread. Doesn't have to be equities either.
Indeed, but my philosophy (rightly or wrongly) has always been, clear any and all debt as stage one. Then start saving/investing.The alternative is to dollar cost average on the way out (i.e. sell £x per month) which de-risks you over time.
But... given just how cheap mortgages are likely to be, up to some low LTV (<50% maybe) it is tempting to try and play for a bit of spread. Doesn't have to be equities either.
Chris Type R said:
Mortgage cash is generally cheap to borrow. Also, in terms of spreading investments you don't want property to be your only investment - there's a good chance that the housing market is due a correction.
This is why I'm not going to buy until next year at the earliest - it feels like a perilous time to buy property right now, even if it is to live in. Ligne said:
If I were in your position... my major concern would be having all of my money in a UK asset, in a (IMO) pretty useless currency whilst also earning my living in that same currency. I'd be borrowing the maximum I could still comfortably afford, diversifying into markets outside of the UK and not exposing myself to that risk. Of course you could look like an idiot if UK house prices rocket and sterling strengthens. I just can't see either of those things happening tbh.
Edited to add that the FTSE itself has been well hedged against currency depreciation in recent times.
Interesting, thanks Edited to add that the FTSE itself has been well hedged against currency depreciation in recent times.
Edited by Ligne on Friday 5th June 21:14
NickCQ said:
I think there are two different issues here. One is diversifying away from UK macroeconomic risk and the second is diversifying from GBP.
When all your assets and liabilities are GBP denominated (i.e. you live in the UK and always expect to), then introducing another currency for the sake of it to me adds risk rather than removes it. I agree on your second point that getting exposure to other non-correlated economies is a good idea.
Clearly a lot to think about! When all your assets and liabilities are GBP denominated (i.e. you live in the UK and always expect to), then introducing another currency for the sake of it to me adds risk rather than removes it. I agree on your second point that getting exposure to other non-correlated economies is a good idea.
Not updated this for a while (to be honest, not even checked it for a while, it's not happy reading).
You contributed and withdrew £21,605.00
Your investments returned you −£1,860.54
You ended up with £19,744.46
Your rate of return is -14.49%
It's not been an unmitigated success..!
Onward.
You contributed and withdrew £21,605.00
Your investments returned you −£1,860.54
You ended up with £19,744.46
Your rate of return is -14.49%
It's not been an unmitigated success..!
Onward.
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