Set and forget investment plan with monthly installments
Discussion
I hope to retire in about 5 years time and although I have investments that will give me rental income, I would like to start putting away say 1.5 - 2k each month as well, to generate another lump sum.
About 10 years ago, I dropped a largish lump sum into the stock market and maintained my own portfolio of stocks and ETFs but even though I was actively trading and moving money around to rebalance it occasionally, after about 18 months I cashed in having made what I thought was a reasonable profit.
This time I want to do it on a more sedate level, ie set up something that I can 'dollar cost average' by putting money into the portfolio every month but I want to leave it, ie resist the urge to jump in and mess about with it, as I found, it is too stressful watching things go up and down each day.
I looked at online brokers such as EToro and it seems that buying will not have the high commission costs that were inhibitive to monthly trades 10 years ago when I last did this, so it seems I can enjoy buying monthly without worrying about that.
Does it make sense to look invest in Euro entities as I am in Euros and want to avoid currency risk if possible? I am hoping to find something suitable for my short investment window without it being too conservative and being the equivalent of a box under the bed.
Any advice, very much appreciated.
About 10 years ago, I dropped a largish lump sum into the stock market and maintained my own portfolio of stocks and ETFs but even though I was actively trading and moving money around to rebalance it occasionally, after about 18 months I cashed in having made what I thought was a reasonable profit.
This time I want to do it on a more sedate level, ie set up something that I can 'dollar cost average' by putting money into the portfolio every month but I want to leave it, ie resist the urge to jump in and mess about with it, as I found, it is too stressful watching things go up and down each day.
I looked at online brokers such as EToro and it seems that buying will not have the high commission costs that were inhibitive to monthly trades 10 years ago when I last did this, so it seems I can enjoy buying monthly without worrying about that.
Does it make sense to look invest in Euro entities as I am in Euros and want to avoid currency risk if possible? I am hoping to find something suitable for my short investment window without it being too conservative and being the equivalent of a box under the bed.
Any advice, very much appreciated.
Anywhere you put your money is going to be a risk, especially over such a short period of time. I opened a Vanguard life strategy account in February with the same idea as you, Covid happened and suddenly the money I had put in was worth 20% less over night. Now luckily I only had a small amount in there, but if I had been saving £2k a month for five years I would have been pretty nervous seeing the value drop by around £24K over night.
If you find an investment that is guaranteed not to lose money please let me know and I will be piling in.
Yes I know that everyone on Pistonheads is a powerfully built money making machine and knows exactly when to get in and out of investments.
If you find an investment that is guaranteed not to lose money please let me know and I will be piling in.
Yes I know that everyone on Pistonheads is a powerfully built money making machine and knows exactly when to get in and out of investments.
jazzdude said:
Does it make sense to look invest in Euro entities as I am in Euros and want to avoid currency risk if possible? I am hoping to find something suitable for my short investment window without it being too conservative and being the equivalent of a box under the bed.
Any advice, very much appreciated.
Don't forget that to avoid currency risk, you'd need to not just buy Euro denominated assets, but those assets can't have a significant part of their income come from non euro denominated sources.Any advice, very much appreciated.
Restricting what you buy to meet that criteria may trade currency risk for a pretty restricted portfolio.
That being said <devil's advocate>isn't there a Euro version of Fundsmith? </devil's advocate>.
In some ways currency risk isn't really a problem. For instance, if you buy shares in a UK company with overseas operations and the £ drops in value then every Euro, Dollar or other currency the company earns as profit is worth more ££ when it's remitted to UK. And the same applies elsewhere.
Much of the secret of successful investing is IMO making sure you don't try to be clever. Look at what has traditionally worked over the long term and just do that. Keep it simple.
You probably know already that the cumulative benefit of keeping costs low can be very significant. You probably also know that it's very high risk to jump in and start making your own off-the-cuff decisions in an investment world full of highly knowledgeable and highly paid experts.
There's something to be said for identifying one or more mainstream equity funds (probably global, either indexing or managed to suit your taste) and starting a regular pattern of monthly buying. Then avoid looking at daily prices for a few years...
And make sure you're using the available tax allowances within ISA and/or SIPP. The cumulative benefit is massive.
Much of the secret of successful investing is IMO making sure you don't try to be clever. Look at what has traditionally worked over the long term and just do that. Keep it simple.
You probably know already that the cumulative benefit of keeping costs low can be very significant. You probably also know that it's very high risk to jump in and start making your own off-the-cuff decisions in an investment world full of highly knowledgeable and highly paid experts.
There's something to be said for identifying one or more mainstream equity funds (probably global, either indexing or managed to suit your taste) and starting a regular pattern of monthly buying. Then avoid looking at daily prices for a few years...
And make sure you're using the available tax allowances within ISA and/or SIPP. The cumulative benefit is massive.
Whilst I agree with your concerns Joey about the recent drop, I would hope that if that was to occur again at the early stages, not much will be lost and hopefully, that with buying more units at lower prices and if there is enough of a recovery in the remaining years, that the initial loss will be absorbed.
Obviously, coming near to the end of the period, I would like to think that by putting some kind of stop into at least cash out near the point of the initial investment, that another drop would basically put me back to the box under the bed scenario.
I'm now looking at a decent platform to use 'Interactive Brokers' looks good and to work out where to find something that at least tracks the total market, perhaps with a tech slant. Without getting tied into to any mutual funds, is there an ETF or two out there that might look at?
I agree re buying into a company with overseas operations but I am nervous about buying shares in a specific company.
I would also be interested in any opinions on whether a couple of k per month is better sticking to a single fund or splitting it up, especially regarding costs.
Obviously, coming near to the end of the period, I would like to think that by putting some kind of stop into at least cash out near the point of the initial investment, that another drop would basically put me back to the box under the bed scenario.
I'm now looking at a decent platform to use 'Interactive Brokers' looks good and to work out where to find something that at least tracks the total market, perhaps with a tech slant. Without getting tied into to any mutual funds, is there an ETF or two out there that might look at?
I agree re buying into a company with overseas operations but I am nervous about buying shares in a specific company.
I would also be interested in any opinions on whether a couple of k per month is better sticking to a single fund or splitting it up, especially regarding costs.
I've been reading about 2 fund portfolios (ie Total Market + Total bonds) and feel that these might be the way to go. I was also surprised to find 'balanced' ETFs that seem to incorporate a proportion of bonds as well.
For my timescale, it seems I should be looking at a heavier allocation towards bonds, but as I am also looking for a bit of growth, what proportion should I consider? With the projected yields from bonds looking like being negative overall, I can't help feeling that a large allocation to bonds at the moment looks similar to just taking out a big chunk of the amount and putting it under the bed.
For my timescale, it seems I should be looking at a heavier allocation towards bonds, but as I am also looking for a bit of growth, what proportion should I consider? With the projected yields from bonds looking like being negative overall, I can't help feeling that a large allocation to bonds at the moment looks similar to just taking out a big chunk of the amount and putting it under the bed.
jazzdude said:
I've been reading about 2 fund portfolios (ie Total Market + Total bonds) and feel that these might be the way to go. I was also surprised to find 'balanced' ETFs that seem to incorporate a proportion of bonds as well.
For my timescale, it seems I should be looking at a heavier allocation towards bonds, but as I am also looking for a bit of growth, what proportion should I consider? With the projected yields from bonds looking like being negative overall, I can't help feeling that a large allocation to bonds at the moment looks similar to just taking out a big chunk of the amount and putting it under the bed.
Have any of them beaten Fundsmith? Up 7.6% this year:For my timescale, it seems I should be looking at a heavier allocation towards bonds, but as I am also looking for a bit of growth, what proportion should I consider? With the projected yields from bonds looking like being negative overall, I can't help feeling that a large allocation to bonds at the moment looks similar to just taking out a big chunk of the amount and putting it under the bed.
https://www.fundsmith.co.uk/fund-factsheet
+18% annualised.
Mr Pointy said:
Have any of them beaten Fundsmith? Up 7.6% this year:
https://www.fundsmith.co.uk/fund-factsheet
+18% annualised.
I had a quick look, I assume it is a mutual fund but I could not find any details on their costs.https://www.fundsmith.co.uk/fund-factsheet
+18% annualised.
jazzdude said:
I had a quick look, I assume it is a mutual fund but I could not find any details on their costs.
? They're at https://www.fundsmith.co.uk/fund-factsheet look at the column headed "OCF* ". Performance quoted is after fees.Gassing Station | Finance | Top of Page | What's New | My Stuff