Vanguard stocks & shares ISA losing my nerve!

[User364837]

I took £15K out of my cash ISA and put it into a stocks and shares ISA. Went for Vanguard global fund can’t remember the exact name but it came up on here and other sites and seemed like a good bet.

i know it’s only been a couple of months but I’m down £500 ☹️. Trying not to think of the interest I could’ve been getting in my cash ISA (5.21%). I know it’s a longer term thing and can go down as well as up, and wasn’t planning to need it for at least a decade. But it’s giving me the willies a bit. Have I made a mistake?

How long are you planning to leave the money there for? 5 years plus - just try to forget about it!

Diversify?

Try the S&P 500 or FTSE all share. Both are doing very well for me. A lot depends on the charges for funds & they can really affect the yield. Is it a tracker or managed? Managed funds cost more. Ideally you want the cheapest trackers poss for the best value.

Agree you need to hold your nerve and not check.

Planning to leave it in for 10 years plus. I know I need to try and forget it.
wondering now if I didnt buy at a good time/should have drip fed.

i do have £5K allowance left for this year and some in a 5% regular savings account so could add more if its low at the moment

it’s the global all cap fund, just checked, it is a fairly safe place isn’t it?

Its tracker.

i could diversify and split up the lump sum rather then just having the £15K in the global all cap

wasnt sure about the American markets with the elections and everything

This is money from a divorce settlement and am not going to be able to save going forwards so just wanted to be sensible with it.
i have more in a cash ISA, some in a regular savings account (5% currently) and £12K premium bonds and £17K index linked savings account that matures in a couple of years

Both my FTSE and American index funds are up >30%

I've been drip feeding money in for 10 years. It's gone through the global financial crisis, Brexit, Covid.

Hold your nerve. Don't worry about the elections. There's always something going on.

It’s stressful but you really do just have to hold your nerve. Over a couple of years my vanguard ISA is now up 25%. There were a few months where it was in the red and I was quite stressed about it.

Best thing to do is buy more, shares are 5% cheaper than this time last week, you need to look at as an opportunity to buy more at a lower price. If your not in a position to buy more take Jake Bogle's ( Vanguard founder) advice and just stand there do nothing and stop looking at your portfolio. The stock market is volatile, thats the price we have to pay for the hope of better returns than cash.

Did you WITHDRAW from your cash ISA or did you TRANSFER? Sorry for the caps but it's an important distinction. Once money is in an ISA (any type), you want to transfer it to keep its tax-free status and avoid using up your annual £20k allowance.

The global fund you've invested in is already well diversified. If you have the savings available, worth thinking about gradually adding more to it.

I transferred rather than withdrew

I can buy more, I have £5K left of this years allowance that I could pay in from a normal savings account, I think I’ll do that since the price is low then.

Thank you for the reassurance it’s a decent fund. I did my reading and thought that at the time but the early drop just had me doubting myself a bit.

Stop looking. I invested in a vanguard tracker isa and it fell pretty much the day after. It’s now doing quite well.

it’s a long term investment, so let it be.

Buy more then delete the app and stop looking.

A global all cap fund is a great choice and will include the same holdings as PP’s S&P and FTSE funds plus others. Everything is down this week 🤷‍♀️

It's worth doing some further reading I would say. A good book for U.K investors is Smarter investing by Tim Hale. Andrew Craig has also written a couple of good books with U.K investors in mind.
It should be noted that most commentators don't recommend being 100% in equities unless you have funds elsewhere to be able to wait out a significant stock market drop.
What's happened in the last week is at the moment a relatively small correction 2008 was about a 50% drop all told the COVID one was 30% but bounced back quick. US stocks actually made no gains at all from 2000-2013 due to the Dot Com crash and the 08 crash happening pretty close together.
So you have to be prepared for some uncomfortable times it's totally normal.
Boglehead's have a good forum but it's mostly US content.
Good luck

I lost £14k on Friday from my new Vanguard SIPP. Hold your nerve and don't be panicked into selling . Its to do with concerns over the American economy apparently

I think you bought at a relatively toppish time and there has been a correction. Over the medium to longer term it should come up again.

So echo-ing other posters to stop looking. My portfolio has lived through the prolonged blips financial crisis and covid and is up multiples of my initial investment.

If you are compelled to look and are inordinately perturbed by falls, then equities may not be the right investment for you.

Otherwise, I believe studies show that the best strategy is to buy and hold. Over time, developed markets trend upwards but you have to be invested when the bull run happens.

It is difficult to time a bull run and so easy to miss the boat or miss the wood for the trees in short term volatility.

In short, keep the faith and don't look too often!

A good risk-minimising strategy is dollar cost averaging if you have spare cash to drip feed on a regular basis.

Don’t panic and don’t keep checking. I check my fund values once a month and that’s only because I opted into a text message to receive them. They bounce up and down in the short term, but are upward in the long term.

I have read a few books on investing and money, but one of the best things I have done is the Rebel Finance school. It’s free and it’s amazing. This years course is currently running and you could catch up on YT. It’s really worth investing the time for this, and I think around lessons 6/7/8 you’ll be feeling very confident and comfortable with what you have done with your money.

If you want to buy more, I would do it on an automated basis. 8 months of the tax year left, so could setup a recurring payment for say the 10th of each month, with £600 going in. When setting that up, choose investment for it to buy, so you don't then need to do anything.

Note: If fund is an ETF then Vanguard Investor only currently lets you buy whole units, so any of the £600 that cannot be used to buy will drop into the cash part of your account. So you may want to log in every 3 months to invest anything that has dropped to cash.

You will hear the term: Dollar Cost Averaging.
That is what you are doing by making monthly payments, you buy more at whatever price the units are at the time.
So if unit price drops you are buying more units then when unit price is up.

For long term investments, try to automate and avoid looking too often. Week to week, month to month, it will be a rollercoaster. Over 5+ years you should see an upwards trend.

Thanks everyone, really appreciate the advice.

i think im being relatively conservative in that with an extra £3.5K today, only £18.5K of my divorce settlement is in the stocks and shares and then the remaining £62K is in cash ISA, premium bonds, index linked savings account and normal savings account. So not all eggs in one basket. But potentially over time I could shift more into stocks & shares

So you’ve taken all the advice onboard about being in a global diversified fund for the longer term and for some reason are no choosing to care about what’s happening to the fund today?

either follow the advice of ignoring short term movements or maybe investing in equities isn’t right for you?

I checked mine this week & have had some big drops. Overall still up but I’m trying to not it worry. I have 10 plus yrs to ride it out.

There is some recovery going on today. I am nicely up on my US holdings, but only slightly up on London.
Vanguard have some good funds but I prefer managed equities. Managed professionally that is.

S&S are long term savings and frequently go down (as well as up!) so only invest money you can afford to potentially loose (but it’s more likely you’ll be up in the long term). So make sure you also have a comfortable amount of cash savings.

To make money you need to INVEST when it’s DOWN and SELL when it’s UP. Problem is people freak out when it’s down and grow in confidence when it’s up and do the total opposite.

Personally I drip feed a set amount via standing order into my S&S ISA into 3 different funds which I decide on at the beginning of the tax year which will help to average out the ups and downs and spread investments out. I also put an amount in (roughly every month) which I try and ‘time the market’ ie. Invest only when down. Kind of works ish - I invested like crazy when the US markets were down during 2021, I’m now up 40% on those investments. I have been down 40% on those investments in the past. So hold on in there!