The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Nikster on May 31, 2013, 02:44:33 AM
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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
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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.
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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.