Investing - the stock market and more

[wazzap24]

Just now, Xela said:

Get buying! 

I’d love to, just don’t have the £££. I’m in a very specific play and I’ve just got to wait it out. 
 

I regret not opening some short positions at the end of last year/beginning of this. The writing was on the wall. 
 

At some point I plan to buy as much Disney as I can afford. The house of mouse is a money printer. Too much focus on streaming and it’s caught up in politics at the moment, but the rebound will be epic. 

 

 

[HanoiVillan]

This is not any sort of advice and will almost certainly be wrong, and in any case has mostly not formed coherent positions yet, but in my mind at the moment:

Long - Africa / Norway / Renewables / Berkshire Hathaway / Chinese Consumer stocks / cruise lines (medium term)

Short - US & China Tech / Germany / the FTSE 250

Edited May 6, 2022 by HanoiVillan

[Davkaus]

Been a rough few days hasn't it? Quite a slow descent since the end of last year, but it's been brutal this week. Despite sticking in a fixed sum every month I'm significantly down on where I was in November. In terms of returns, probably close to 40% down.

In other words, it's all on sale, time to buy!

 

[wazzap24]

I actually lol’d at the FTSE going up on the retail data today. The proper crash is going to be epic. 

[wazzap24]

S&P now officially in Bear Market territory, hitting the -20% mark today.
 

Jon Bon, play that tune…

 

 Whoah, we’re half way there

[Xela]

10 hours ago, Davkaus said:

Been a rough few days hasn't it? Quite a slow descent since the end of last year, but it's been brutal this week. Despite sticking in a fixed sum every month I'm significantly down on where I was in November. In terms of returns, probably close to 40% down.

In other words, it's all on sale, time to buy!

 

I'm similar, not quite as much down as you as I started putting chunks in last May, but i'm probably close to 20% down

Don't even want to check my work pension! Thats in 100% global equities as well. 

[Xela]

No idea where best to invest - equities, commodities, used Rolexes or classic cars! Or keep it as cash and hope inflation is the least damaging. 

I suppose paying my mortgage off quicker is a sensible idea - saving all that future interest. 

[NoelVilla]

I have my financial security in stocks in big Swedish companies. I actually don't see that it is me selling them but to see them decrease so much in value is nerv-breaking. Thankful for being in a position that I don't need to sell them right now.

[Davkaus]

2 hours ago, Xela said:

 

I suppose paying my mortgage off quicker is a sensible idea - saving all that future interest. 

I've taken the view that on a long term very low fixed rate, and inflation making that debt worth less and less (and, crucially, being nowhere near matched by the pitiful interest rate increases), the money is better off invested and growing than paying the mortgage down.

I think I'd only overpay in the current economy if I was close to the end of a fixed term and trying to move down an LTV bracket.

[Villa87]

7 hours ago, Davkaus said:

I've taken the view that on a long term very low fixed rate, and inflation making that debt worth less and less (and, crucially, being nowhere near matched by the pitiful interest rate increases), the money is better off invested and growing than paying the mortgage down.

I think I'd only overpay in the current economy if I was close to the end of a fixed term and trying to move down an LTV bracket.

I do agree to a point - if only wages were keeping up with inflation!

[Rugeley Villa]

Is a S&P 500 fund better off in a tax advantaged account or a taxable account ? 
 

p.s I already hold a TDF(Target Date Fund ) in a tax advantaged account 

Edited July 24, 2022 by Rugeley Villa

[Davkaus]

8 minutes ago, Rugeley Villa said:

Is a S&P 500 fund better off in a tax advantaged account or a taxable account ? 
 

p.s I already hold a TDF(Target Date Fund ) in a tax advantaged account 

Other things being equal, there's no point exposing yourself to tax liabilities when you don't need to, but what kind of account are you looking at, they'll usually have some limitations.

For a typical investor who isn't of particularly high net worth, a stocks and shares ISA is going to be the way to go, as it's only limitations are around the amount you can invest per year (around £20k), but depending on if you're maxing out employer contributions, which tax bracket you're in, and your intended timeframe to invest for, it could be worth considering pensions too.

Edited July 24, 2022 by Davkaus

[Rugeley Villa]

24 minutes ago, Davkaus said:

Other things being equal, there's no point exposing yourself to tax liabilities when you don't need to, but what kind of account are you looking at, they'll usually have some limitations.

For a typical investor who isn't of particularly high net worth, a stocks and shares ISA is going to be the way to go, as it's only limitations are around the amount you can invest per year (around £20k), but depending on if you're maxing out employer contributions, which tax bracket you're in, and your intended timeframe to invest for, it could be worth considering pensions too.

I’ve already got a S&S Isa which my TDF is in which is tax advantaged . Just wondered if I also put an S&P 500 fund in that Isa would it be best decision ? I won’t be maxing out the S&S Isa , no. Also I’m currently down as Self employed so no workplace pension , but I will be starting new job in week or so which will offer me a workplace pension. I earn below 50k usually and the new job will keep it that way so whatever tax bracket that is. I intend to invest for the long term .  Just got some spare cash sitting there doing nothing but losing value so thinking of trying to do something with it.  Obviously have an emergency fund which doesn’t get touched unless an emergency. 

[KentVillan]

55 minutes ago, Rugeley Villa said:

I’ve already got a S&S Isa which my TDF is in which is tax advantaged . Just wondered if I also put an S&P 500 fund in that Isa would it be best decision ? I won’t be maxing out the S&S Isa , no. Also I’m currently down as Self employed so no workplace pension , but I will be starting new job in week or so which will offer me a workplace pension. I earn below 50k usually and the new job will keep it that way so whatever tax bracket that is. I intend to invest for the long term .  Just got some spare cash sitting there doing nothing but losing value so thinking of trying to do something with it.  Obviously have an emergency fund which doesn’t get touched unless an emergency. 

Not professional advice, but I’d just keep filling up the S&S ISA if you aren’t hitting the contribution limit. Don’t see any reason for doing otherwise?

[Rugeley Villa]

2 minutes ago, KentVillan said:

Not professional advice, but I’d just keep filling up the S&S ISA if you aren’t hitting the contribution limit. Don’t see any reason for doing otherwise?

Thanks. Basically I know TDFs are better off in tax advantaged accounts. Just wanted to make sure SP 500 is too. I’ve scowled the net and couldn’t really get a straight answer. 

[KentVillan]

1 minute ago, Rugeley Villa said:

Thanks. Basically I know TDFs are better off in tax advantaged accounts. Just wanted to make sure SP 500 is too. I’ve scowled the net and couldn’t really get a straight answer. 

Yeah I have a mix of passive / active investment trusts, funds and individual equities in my S&S ISA. Most of it is in the Legal & General International Index Trust.

The only thing I could think of maybe is fees, but the tax savings are surely more important unless you’re getting incredible fees outside a tax free wrapper.

Obviously the calculations can change a bit depending on how much you’re investing. There is a CGT allowance which at low levels can make investing outside a tax free wrapper not all that different, but for long term peace of mind and low hassle I would just stick with the S&S ISA.

My approach is to have a cash emergency fund of a few months’ normal living costs, then I put about 90-95% of the rest into low cost passive index tracker, and 5-10% is “fun” money for doing stupid stuff - Seedrs, weird active funds, trying my luck at stock picking, etc.

How best to split this across ISA / pension depends on employment status, salary, and how much matching your employer does. I’d say always maximise your matched contributions, as that’s basically free money. Then beyond that I think the ISA is more convenient until you hit the contribution limits. (If you’re exceeding the limits you should probably pay for some professional advice anyway.)

[Davkaus]

1 hour ago, Rugeley Villa said:

I’ve already got a S&S Isa which my TDF is in which is tax advantaged . Just wondered if I also put an S&P 500 fund in that Isa would it be best decision ? I won’t be maxing out the S&S Isa , no. Also I’m currently down as Self employed so no workplace pension , but I will be starting new job in week or so which will offer me a workplace pension. I earn below 50k usually and the new job will keep it that way so whatever tax bracket that is. I intend to invest for the long term .  Just got some spare cash sitting there doing nothing but losing value so thinking of trying to do something with it.  Obviously have an emergency fund which doesn’t get touched unless an emergency. 

When you start the new job maxing out those pension contributions to get the maximum free cash from your employer will be the best way to invest, but after that it's really up to you and your goals. Nothing wrong with continuing to fill up your ISA, but it might be worth considering what long term goals you have. Might you want this money in 5 years? 10 years? How far are you from retirement?

If you were intending to just keep this cash invested as your life saving with no specific planned end point, even after you max out your employer contributions, it can still be worth contributing more to your pension, either via the employer pension or a SIPP, as you can continue to get tax relief, but at the cost of locking it away until 10 years before state pension age. That's a free 20% right away, so it can be the sensible move if you are intending to lock it away for the long term, but a S&S ISA will be the way to go if you want the flexibility at the cost of missing out on that 20% tax relief boost.

IMO the flexibility is worth missing out on that especially as there can be tax implications on a pension when it's time to pull the cash out, ISAs are a lot more simple.

Edited July 24, 2022 by Davkaus

[Rugeley Villa]

Cheers lads . Will definitely see how much matching my new employer does regarding my pension and would be silly not to take full advantage of that. I’ve no plans for the money anytime soon, it’s basically retirement planning. I’d even like to not touch one of the funds and leave it for the kids, but we’ll see how things are when I retire in around 25 odd years touch wood I make it that far . 

[KentVillan]

ISA = taxed on the way in, but then it’s all tax free forever

Pension = tax savings on way in, but you’ll be taxed when you start drawing down on it

IMO the pension tax savings make the most sense if you’re on Higher / Additional Rate income tax (or if you’ve got *loads* of money to invest and are trying to max out all your tax free wrappers).

Otherwise I’d just pay in whatever is being matched by your employer and stick the rest in more accessible savings & investments, as you never know when you might need it.

But this is all just based on my own reading and conversations with accountant re my personal situation, so there may well be exceptions to what I’m saying… not an expert.

[Rugeley Villa]

Never used to give a shit about it but then thought bloody hell I’ve got no retirement plan or pension . Was always set in my mind that I could save money in bank for retirement but I just don’t think that would cover it and is a negative way of doing things .