Vanguard questions

[Sortingfinances2]

I have money in a cash ISA doing nothing and need to sort this out.

It seems like a Vanguard S+S ISA would make the most sense with the lifestrategy funds. I don't have time or enough knowledge to put together my own portfolio.

So......
They seem to be dipping at the moment.
Do I wait a while until they plateau and transfer all money in in one go.
Or wait and start to do small transfers over time.
Or start now with small transfers.
The money can be locked away indefinitely as I already have premium bonds as my emergency fund.

I have 40K so 20 this tax year and 20 next potentially depending on if they keep dropping (might as well stay in the cash ISA in that case).

Thanks for any suggestions!

Op i would drip in every week now and the tax year end is coming up then drip in after tax year April.

As the money is already in an ISA wrapper you can retain the ISA status by moving it directly to the new ISA account. This means that in the new tax year you will still have the full £20k allowance available to you for any new money you want to add.

Thank you !
@Sunseed I didn't think of that!
If transfering from cash ISA to S+S ISA can I still dripfeed across?

Please can I understand why you drip feed? I’m starting to try and get my head around investing!
Thanks

@Rahgh

The market goes up and down all the time. If you buy today in one lump sum and the market drops by 10% next week your £100,000 is now worth £90,000.

If you spread this over several smaller amounts instead you’ll still have lost 10% on the first little bit you put in. BUT you’ll be making up for it by buying today when everything’s 10% cheaper.

Investing in S&S isn't a short term thing- they may be dropping currently, but you're not going to be cashing out this week.
FWIW, my vanguard S&S ISA has made 7.7% this financial year to date. Some months have been more like 13%, some months have been losses. You need to look at it over ten years or more.

@Sortingfinances2 You'd need to check the Terms & Conditions of your current and new ISA products to see if they allow partial transfers out and in. Some will only deal with a full transfer.

The thing about investing is that it makes sense to invest when share prices lower not when they rise (thinking about funds rather than individual shares here). It seems counterintuitive when first starting out, as the temptation is to wait until shares rise in value. However, timing the market isn't really that helpful overall, as prices fluctuate all the time and investing is for the long term not for quick gains (unless you are a trader).

You drip it in to smooth out your returns. It is called dollar cost averaging.

So long as you don't need the money and can afford to wait out the dips, buy even when the market is going down. In fact, it is the best time to buy as when the index/fund picks up again, you will get a strong upside.

The important thing is to stay invested. It is almost impossible for an amateur to time the market. So you need to make sure you are invested when the market surges, which will almost certainly happen before you are aware it has.

Thank you so much for your help - sorry for slow reply

So is now a good time to invest in a S&S ISA? I'm Thinking about initially investing £750, will add over the years and don't plan to touch it for at least a decade. Is it possible to lose it all and end up owing money?

Drip feeding/pound cost averaging loses out to all-in investment 2/3 of the time.

You're investing in something that you expect to increase over time, so by drip feeding you're keeping most of your money back from that expected increase.

Here's a Vanguard article about it: www.vanguardinvestor.co.uk/articles/latest-thoughts/how-it-works/what-is-pound-cost-averaging

Interesting. Ds1 wants to invest in it. Woman at Nationwide told me they were risky. I told her that the nationwide %'s offered on the childrens savings were so poor, anything had to be better!

Really recommend Hargreaves Lansdown. I drip feed monthly into mine, and the articles on their website have really helped me to understand it.

They're also really helpful and patient when you phone to complete anything or ask questions!

Time in the market not time to the market is more effective. Start transferring it over to Vanguard now and I would recommend doing it in one lump sum. My ISA transfer took several months.

@CurtainTroubles that's really helpful, thank you. Will look into this as my investments are certainly not obscure!!