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?

If you are investing for 10 years then drops now are a good thing!

FWIW Ihave always taken the view that markets are moved by fear and greed. As such have always taken a contrarian view, buy when the herd are fearful! Been doing this for 30+ years now and have had some notable losses in that time . However just approaching retirement now, and will start to draw down what is now a very nice pot of money. Good luck, if it was easy we would all be billionaires, but sound investment + time wins out in the end. PS ETF’s are a great way of spreading risk, research and then look at morningstar fund ratings plus a couple more(can’t remember the names offhand) if you get 2 out of 3 positive ratings I have found you will usually do well

Hold your nerve, don't keep checking it you will reap the benefits down the line.

Very grateful to the people on here who recommend S&P 500 to me about 3-4yrs ago. I started an ISA and moved money from low interest savings into it. Some in S&P 500 but I diversified and also did an ethical fund and a couple of other trackers. Just over 20% growth so far. All of them "lost" at some point, you really do just have to hold your nerve.

Old Rachel has given mine the jitters , I've lost £10k since she announced her no growth budget .

Hold your nerve. My Vanguard isa was down, now it's +18%

@hattie43 I’m curious- are you invested in a UK companies fund, or predominantly UK?
What % down are you?

Bet it's up a huge amount today. My mid-risk Vanguard ISA is up 23% as a significant chunk is US.

yes- my ISA has made a nice chunk today - I am surprised the markets seems to be so happy with the US election results 🤷🏼‍♀️

Yep a nice chunk , presumably the Donald factor

The ‘Donald Factor’ (grim as he is) is certainly a thing. US markets are expecting tax cuts and deregulation which will provide a short term sugar rush to US share prices. Some commentators predicting the S&P 500 could hit close to 7,000 in 2025 which will have a big impact on global equity trackers.

However, increased inflation, higher medium term interest rates (from the increased deficit) and the impact of tariffs might spell worse news later down the line. That’s before we even get to heightened geopolitical risk.

As others have said, if you don’t need the money then the best plan for all these equity ETFs is to sit back and leave well alone. The long term trend will see even the hardest crash recover.

What’s it worth today?

It’s up 12.18% 😁

Please take everyone’s advice and ignore ignore ignore short term price fluctuations! You are an investor for the long term now, and are a (very small) shareholder in the top 3 or 4 thousands of companies in the world! Don’t sell now to invest in FTSE or S&P - you already own those shares.

There’s are people who are good at timing the market and trying to buy at the bottom and sell at the top, there are people who are good at knowing if U.K. will outperform the US or China, but unless you KNOW you are one of them, why would you use your hard earned savings to test this out?

Youve done the right thing for a retail investor. Stick it in the all world fund, at to it on a regular basis if you can, and forget about it until you are retired (or at it’s been 10 years).

btw, by investing in the all-world, you are almostly certainty never going to be the top performing fund in any one year (eg the S&P did better in 2024 and 23). But over a LONG period, as long as you don’t sell, you are almost always in the top 25% of best performing funds and that should be good enough.

(source: I’m an asset manager)

It's a good thing you didn't pull out then

Out of interest, when it comes to April and the ISA allowance refreshes, wondering if it’s best to put more into the same fund or a different tracker one 🤔
currently 20% roughly of my capital is in the S&S ISA with the rest in cash isa/premium bonds/normal savings account but I’d like to put another 20 in.
and is it best to feed it every month rather than put it all in in a chunk in April?

It is generally better to drip investments in as it smooths out the market due to dollar cost averaging. However, US equities are very toppish at the moment and maybe waiting till April, which is not too far away, to put it in in one lump sum might be better. I don't have a crystal ball. The market is not behaving the most rationally at the moment. I try to avoid the scramble in early April by people trying to make the tax year as that could artificially raise prices.

So on balance, feed it in every month and forget about it.

Thanks, would be 6 April earliest as I’ve maxed out my allowance this year

I would take the opposite view from the PP and say that most of the research suggests that putting a lump sum in straight away will outperform drip feeding over a longer time (e.g. https://www.vanguard.co.uk/professional/vanguard-365/financial-planning/financial-well-being/cost-averaging). That said, there clearly is the risk that you put it all in at the top of the market and are one of the people for whom drip feeding would have been better. Part of the decision depends on how you'd react in that situation. If you'd panic and pull it out, or be put off investing again, then drip feed. You could always take a mix e.g. put £8k in straight away and then £1k a month (or whatever balance worked best for you).

If it's a good deal, put mostest in soonest (to misquote the American Civil War baddies).

Timing the market is usually guesswork.

When it works, tell everyone how well you did. When it's a flop, tell nobody. That's what top pundits do.

That is very interesting. Thanks for the link @Mia85.

Dollar cost averaging has been a good strategy for me over the years as I used it as savings out of regular employment income. However, I am slightly struggling having come into a lump sum how to invest it.

Just putting it into the market in one lump sum is attractive rather than faffing about with drip feeding it in, especially based on what the article says. My only concern is that there is so much Trump froth in equities right now but I am not keen on bonds.

Certainly food for thought.

Yes, I completely understand the caution around putting a lump sum in, even if the maths suggests it's most likely to be the right decision. Part of it depends on the psychological side. If you are likely to hesitate about putting a lump sum in because of the market then you should defintiely drip feed, otherwise the cash will sit there waiting for the 'right time' and you're most likely to miss out on gains by doing that. It then becomes even harder to buy in!

What about doing a smaller lump sum straight away and then higher monthly DCA than usual?

If you have decided to invest in the stock market because you think it will give the best long-term returns, why withhold part of your capital from the market by drip feeding? The portion held back is not then invested in the very thing you have already decided will give the best return.

Time in the market beats timing the market.

What about doing a smaller lump sum straight away and then higher monthly DCA than usual?

@Mia85 That sounds like a good idea. Dithering is never a good strategy anyway.

I got stung having invested a lump sum in the Scottish Mortgage Investment Trust in late 2021 just before the Russian invasion of Ukraine. I managed to climb out of that one through subsequent dollar cost averaging but it was a long ride. The US market is defying gravity at the moment. Just when I think it cannot possibly go higher, it does

Just to check, when you say you’ve maxed out your allowance, are you counting in this the £15k transfer you mention at the start of the thread? Because it was a transfer from one ISA provider to another (vs you taking the money out and then putting into another provider yourself), then that £15k doesn’t count towards the £20k annual cap.