Keep direct debit into stocks and shares investment?

[Threelilducks]

I have a monthly direct debit of £300 that goes into a stocks and shares with vanguard. The money that is in there I will keep in and hope it recovers. But would you continue to add money in each month at the moment? Last month most of the money I put in just disappeared in loss. But I have no clue really. Any advice welcome

You have to make a judgment here. Is this Armageddon or an event which, no matter how unpleasant, will pass in the next year or so and things will go back to normal.

Before you do that, though, do you have enough cash buffer to keep you going should you lose your job (or is your job impossible to lose)?

If your answer to the latter is yes and you feel we will have a cure/vaccine in a year or so, keep putting money in. If you are not sure on either of the above points, I would stop.

Generally ‘drip feeding’ or ‘time averaging’ is a good way to invest but these are exceptional times. We have had far bigger pull backs in the past during wars and depressions.

We are keeping ours up because it's a long term investment for us and we are fortunate enough not to need that money now. Remember that whilst stocks and shares are low, your £300 will buy many more than when they're high, so when it does recover you'll have more, iyswim.

Cheshire,

That is only true if companies both survive and don’t need to ask for more equity capital using rights issues or government bail out money.

I sold a bit (10% of my portfolio) after the first 10% decline. I am keeping the rest but not putting in new money until there is some clarity about an end point,

There is value in keeping some dry powder for the inevitable opportunities that come with major economic dislocations.

I'm pretty clueless but last month I put in £300 and over £200 was lost in my overall portfolio. So I don't see how the money is buying stocks whilst they are low if it's just being lost.

Three,

A share represents a proportion of a company so, if at 7,500 in the FTSE your £300 would by .01% of a company (say) at FTSE £5,000 it would buy .015%. Then if the market recovers to where it was, that 0.015% would be worth £450.

Thanks Larry, food for thought. I've got 18 years for this to right itself.... it's got some major catching up to do after the last few weeks....

I've stopped my direct debit, I just couldn't bear seeing it keep go down. I'll start up again when things are more stable.

I'm buying in. I save 400 a month but I'm going to reduce this to 300. I've upped my saving in premium bonds. You need more cash right now. I've no idea if redundancy is in the horizon so I needs cash pile and quick.

What exactly are you putting the money into and how near are you to retirement.

If you examine the vanguard lifestrategy and target retirement funds they are exemplary.

In the recent crash the lifestrategy 60% Acc lost around 15%.

If you have a long time horizon it is best to keep going and ignore all the noise.

If you need proof look at the last quarter of 2019 when stocks spiked up a lot and were expensive.

That is when you should have asked this question.

It all depends on your financial circumstances.

I'm continuing to invest as have no debts and no mortgage, sizeable cash savings and a reasonable time (15 - 20 years) before I intend to start drawing down from those investments. The way I see it is that the funds are way cheaper to buy than they were last month.

On the other hand, if I had a mortgage and/or little in the way of savings, I would cancel the direct debit.

The time to put your money into stocks and shares is when it has fallen. We have just put a big chunk of cash into a tracker. When it climbs back to where it was before Covid (and it will) we will have made about 30% on it.

Am continuing to keep my DDs into S&S ISAs. Only because I am in my 30s, am not intending to touch them for 10+ years and have other savings. Hoping that I will benefit in long-term still from continuing to buy now.

And have also stopped checking on them weekly - keeping my head down and trying to hold my nerve!

The stocks are on sale, why wait until they go back up to full price again to start buying?! That would be insane.

@HollyBollyBooBoo that’s honestly a bit like waiting for the January sales to end before you go shopping to buy stuff that was in the sale. Honestly, it’s against everything professionals will be doing.

My portfolio is now up 20% due to money I put in as it crashed.

I should add ONLY if your finances are strong and you won’t need it back. Liquidity trumps a good investment every time