Author Topic: Passive Investing in the UK: help!  (Read 3146 times)

Nikster

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Passive Investing in the UK: help!
« on: May 31, 2013, 02:44:33 AM »
Hello all,

First time poster so please go easy on me!

I've been reading a bit about passive investing and I'm looking to dip my toe into the water. I'm thinking of initially investing 2500 within a S+S ISA in index trackers in a rough ratio as follows:

UK Equity 30% : developed equities 20 % : emerging markets 20 % : UK bonds 30%

I will then look to put in 2000 per month to rebalance the ratios.

My main concern is that the markets are at such a high level. Am I better off waiting (in the hope that the Markets drop) or jumping in now? Should i diversify a bit further to include markets like Canada that haven't hit the same peaks as the US and UK?

Thanks in advance

Nik

johnsmith

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Re: Passive Investing in the UK: help!
« Reply #1 on: June 02, 2013, 04:28:57 AM »
Hi Nikster,

I am in a similar situation to you. But not able to invest as much monthly

However I have realised I am an awful investor and need the most hands off aproach possible. I am nearly 25 so I went with a vanguard lifestrategy 80% equity fund and will pay in 500 monthly for 25 years +, I should then be able to retire. I could pay in more but I am comfortable with this amount, and ill have a teachers pension incase this all goes wrong.

The vanguard fund is diversified and automatically rebalances, so no nasty meddling needed on my part. This is a great article from monevator in the UK which tells you about these funds .   http://monevator.com/vanguard-lifestrategy/

Remember there is a ISA limit of just over 11,000 a year, so you might think about just filling this every year if you are just dipping your toe in the water rather than your 2000 a month which would take you over.

I invest through Hargreaves and Lansdown as they are the cheapest for a 1 fund portfolio. The monevator website has a cost comparison of all the different brokers in the UK, which can help you decide who to invest with.

Hope this helps and good luck.

daverobev

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Re: Passive Investing in the UK: help!
« Reply #2 on: June 02, 2013, 09:09:44 AM »
If you DO decide to put more than the 11k ISA limit a year, I'm sure you can put the rest into a pension scheme and thus lower your tax bill? Otherwise, check out asset allocation - make sure you have anything that gets a tax break (eg, UK stocks) in the taxable account, and things that do not (bonds) in the ISA.