Losing money in my investments

[Sweetchocolatecandy]

So I’m 34 and last year I decided to take control of my finances so opened a SIPP and S&S ISA as I want to start saving after years of being reckless with money. After doing a lot of reading I invested in a few vanguard funds including their life strategy fund and one that tracks the American stock market. When I checked today I’m already in a minus and a lot of my money has been ‘lost’ in the stock market.

My question is- is is normal for money to go down before it recovers? As when I’ve read other threads about ISA’s etc other people seem to be doing really well, or have I just picked really rubbish funds? Are anyone else’s investment doing badly?

I thought I was doing the right thing by opening these accounts but now I just feel like I’ve gambled a big chunk of my money away.

I invested 20k in a Vanguard S&S ISA, spread across three different funds in the middle of last year. It goes up and down all the time. At one point before Xmas it was up to 21k, now it's down to 20.5k. I'm in it for the long haul so I'm pretty much ignoring it.

I've got money spread over a few vanguard life strategy
I haven't had them that long but at first they were up and then dropped to something like -6. At one point they were up to 9 and now they've dropped to nearly 3
So don't worry it's a roller coaster but will smooth out in time

If it helps OP think about how you'd have lost money anyway if you'd left it as cash because inflation is high. Your investment should recover, cash wouldn't.

I work in investing. You’ve done the exact right thing.

Vanguard is cheap and effective. Most of their funds are trackers, which follow the overall performance of the stock market. Some funds will do better than this, others will do worse. So a tracker will always give you the midpoint and you don’t need to worry about whether you’ve picked the ‘right’ fund.

My one suggestion (and this is important) is not to just put in one lump sum. Keep adding to it. There’s a risk with a lump sum that you’re unlucky and picked a high point in the market. You need to keep paying it to smooth this out. A monthly direct debit means you’ll naturally benefit from investing during some dips in the market.

Investing is a long term thing. Markets (especially big tech, which is a major % of global stock market) are struggling a bit with inflation, interest rates and omicron. Stick with it and keep adding little and often.

Do not cave into the temptation to sell now - you’ve not made a loss until you sell the assets.

Op, if you have got vanguard funds then you will already very likely own apple already
That's the beauty of buying index funds.
And if apple did have problems and wasn't as successful, you Won't loose your money.

Jack bogle said, why look for a needle when you can buy the hay stack.
Others drip feed money in.

Assuming you are going to be trying to save money (i.e. sticking some into your pension / ISA etc each year) for the next 20-30 years you should WANT the market to go down near term, so that the money you are putting in for the next few years / decades is going further and not buying at historically very richly valued levels.

As long as you are reasonably diversified and not sticking it all into 'meme' stocks as per another thread today, you don't need to lose any sleep over the fluctuations. And realistically, in 20-30 years a (for example) £3k difference between buying before or after a 15% correction will be trivial compared to the consequences of a lot of other life choices you make between now and then.

@eagerlywaitingfor

Did you not speak to an independent financial adviser first?

Investing in the stock market is risky, it can be incredibly profitable, but it can just as easily go the other way, so you should only do it if you are prepared to kiss goodbye to your money.

What a ridiculous comment .

Most people do NOT need an IFA. Read meaningful money handbook , self education is possible and will save thousands of pounds .

The whole market atm is dropping ... stop checking your accounts - investments are a 5 year + hold

I've only been investing for the last 12 months, I do regret listening to the conventional wisdom of leaving it alone and allowing it to accumulate rather than sticking to my original plan of skimming off the gains every time they rose by 5%... I'm basically back to the same sum I started with 12 months ago now, if I'd skimmed off every time it rose 5% I'd have at least £20k cash sat in the bank right now.

If it makes you feel better OP, take a look at the 5 year performance for any of the funds you have chosen (you can easily do that on Vanguard). You’ll see lots of bumps, ups and downs, some quite drastic like the one over the last few days, but look at the overall trajectory of the line over the last 5 years.

The problems with Russia and the Ukraine are causing the downturn at the moment. Hopefully it will be resolved soon and the markets will start to show some growth again.

@Yants

I've only been investing for the last 12 months, I do regret listening to the conventional wisdom of leaving it alone and allowing it to accumulate rather than sticking to my original plan of skimming off the gains every time they rose by 5%... I'm basically back to the same sum I started with 12 months ago now, if I'd skimmed off every time it rose 5% I'd have at least £20k cash sat in the bank right now.

If you had 'skimmed off' every time the market went up 5% for the last decade, how would your returns look? Presumably you'd have been mostly sat in cash for the last few years.....?

Oh I've just checked mine and they've really taken a battering haven't they? 😬 oh well

Beck30 - I haven't done the maths to figure whether it would have made more sense to skim off every 5% gain for the last 10 years, it probably wouldn't have.

But the fact remains it would have made a hell of a lot of sense to have done that for the last 12 months... and who's to say the last 12 months of volatility doesn't become the new normal for the next 10 years?

It's totally normal to obsessively check when you're new to investing, but the saying goes "time in the market beats timing the market" and if you're in it for the long haul then that's absolutely true.

With an initial investment of 6k into a PEP 1999 and no further contributions to the fund gains of over 850% have been realised to date.
It's a long game but returns can be good. Volatility is your friend as significant gains can be made on the upturn of markets.
Stick with it and add in regular contributions if you can, it will help ride out the market highs and lows.
I'd only check your investment value every 6months as frequent valuation checks can cause alarm if the markets have dropped. With investments spread over a vast number of companies you'll reap rewards in time.

Absolutely true what others have said, your in it for the long term, forget about it.
S&S are a good medium to long term investment and can be easily liquidised if necessary.

I'm a similar position. I opened a Vanguard account about 9 months ago and have been putting away about £1k a month into the Lifestrategy 60 fund. I was £130 up at the end of December and now almost £400 down! So hard to sit on my hands and not take it out.

I'm no expert but I got investments in Canada, which have done well , then when I was new to investing I picked 4 funds all gained , I just got given a lump sum , I added a new fund , set up a sipp , I set it up smaller companies UK , USA, and emerging nations, a China fund , a India fund , 2 European funds , a robotics fund and a tech 1

Then next tax year setting up 3 more with HSBC, so my portfolio is a total mix