Emotions stopping me from investing

[Woodpecker22]

I am an idiot. I had a pension invested in a SIPP (mainly investment trusts) and some savings in stocks and shares ISAs.

Over the years I have continually stressed about what the stock market is doing which led to me putting the money into cash in 2019. Since then I have been equally stressed about the stock market going up while my money is in cash.

I really need to reinvest this but for the last few months everyone has been saving the market is overvalued. I know I should not care as I don't need the money for 20 years but know that as soon as I reinvest it the market will go down.

Please can someone talk some sense into me. It is making me really stressed. I know I should just invest it somewhere for the long term but I don't think I can cope with the stress of it.

Can you get a FA to manage this for you?

Perhaps a series of regular smaller payments would feel less scary - it's a perfectly valid method of investing, which means you don't have to worry about 'timing' the market.

It may also be helpful to remember that a) by keeping your money in cash you are virtually guaranteed to lose hard earned money in real terms (due to inflation eroding your purchasing power) and b) that it is very differentl to invest in a well diversified portfolio vs. 'gambling' on a few individual shares.

Look into something like Vanguard - they offer pre-made portfolios of different investments (they call them 'Life strategy' funds) that cater to different risk appetites and time horizons. They also have the advantage of being very cost effective, so you're not paying for some fund manager to get rich while you see little of the profits.

It takes a little while to not freak out when the market goes down a little, but I'm now really chilled out about it. Even the massive drop last spring hasn't really affected me - I just used the opportunity to buy some cheap investments and am looking better than before the drop.

I am not sure about using a FA as I would probably worry just as much about what he/she is doing.

I was wondering about just putting everything in Vanguard Life Strategy 100%. Previously I had everything in multiple investment trusts and I think there were a lot of them to worry about. They have done great over the last year which has really depressed me.

I think investing over time would help however my funds are all with aj bell at the moment and they charge a lot for regular investments which has put me off doing this. I am not sure if I can just transfer to vanguard and then invest over time or whether I have to invest the whole lot in one go when it is transferred?

I use the 100% equity lifestrategy fund almost exclusively for my ISA - I'm reasonably financially literate but too busy / lazy to regularly shift things around myself. It's a good '"leave the money in and forget about it" fund for me. My time horizons is also about 20 years and I have a separate pension, so have a relatively high risk tolerance.

With regards to cash: you can definitely leave cash uninvested but they don't pay any interest on cash balances. Might still be worth putting in a larger sum now just to max out this year's ISA allowance though. There are no charges per transaction.

I was reluctant to invest a few years ago and realised that I liked having a big cash cushion, even if mathematically it was not the best decision. So I would review the size of your emergency fund... how much makes you feel secure. In my case I have a year's salary.

Then with investing set it on autopilot. Have money going in every month where you do not need to do anything. Once you get used to that, increase the amount 10%, then leave on auto for another few months. Repeat that, until you start to worry again.

You can transfer AJBell to Vanguard. Any funds you have which Vanguard Investor has should transfer over as a fund (in-specie transfer) anything else is sold and the cash moves over.
You could keep that cash on the account for a while.

100% equities - are you sure you are happy with that risk level?

I suggest that you set aside say one hour a week to worry/plan your investments and the rest of the time whenever it pops into your mind just remember it is not "worry" time yet!!! Do not look at the markets outside the "worry" window!
Maybe set a target for the worry window - to invest a set amount?

Then eventually make this one hour a month!

Yes, I'm not convinced that a 100% equities fund is for you. It's high risk, and you say that you worry about risk so I can't understand your thinking at all!