Advice on £4k Diversification

[Pottedbeef]

On 04/06/2019 at 11:23, richatthecroft said:

Not here or with any of these crooks: 

https://www.theguardian.com/money/2019/jun/04/neil-woodford-fund-equity-income-fund-withdrawals

https://www.theguardian.com/money/2019/jun/03/neil-woodford-blocks-investors-from-pulling-cash-from-flagship-fund

It came back to me in a flash, just why I stick to Half Sovie's and Libs...

I just got burned by this. I was going to pull it a couple of weeks ago but didn't push the button as I remembered he pays a dividend on the 31st. Tried to sell yesterday and....

[AuricGoldfinger]

Also read the book “the richest man in babylon” if you’re following its message it will give you reassurance and confidence in pursuing your goals, if your not quite on its message it will give you the knowledge and tools to do so.

[MLNCoins]

1 hour ago, AuricGoldfinger said:

Also read the book “the richest man in babylon” if you’re following its message it will give you reassurance and confidence in pursuing your goals, if your not quite on its message it will give you the knowledge and tools to do so.

It's on the list, once the course is done I have about 5-6 books I want to read, this one is included in that list 😊.

[richatthecroft]

4 hours ago, Pottedbeef said:

I just got burned by this. I was going to pull it a couple of weeks ago but didn't push the button as I remembered he pays a dividend on the 31st. Tried to sell yesterday and....

I'm sorry to hear this- as per the question posed in the title of this thread, its important to diversify investments.  

My confidence is very much dented in terms of any future investment in stocks.  This follows, what was for me a massive loss of capital within three hours of a disastrous company RNS.  This was around 2 years ago- the shares I hold are continuing to bump along the gutter price wise- and I'm not holding my breath for recovery anytime soon.  

I do hope you achieve a more positive outcome than I.      

 

[vand]

I just started buying the Woodford Income Fund and TBH I think it's great that he's getting hung out to dry. Woodford's star has fallen and his name is toxic now... HL have struck him off their Wealth50... these are "so bad it's good" levels of sentiment around his fund right now. I will consistently accumulate more over the next couple of years and leave him to get on with the job with rebuilding the fund and his reputation.

I won't pretend that everything is rosy with Woodford Income at the moment, but then again if they were then we wouldn't have this chance to buy in so cheaply. 

In 3 years time he'll have clawed his way back and people will see the 5 year performance in line with most others, but that will hide the massive dip and recovery and the story of those who were dumb enough/brave enough to sell/buy on the panic.

[richatthecroft]

8 minutes ago, vand said:

I won't pretend that everything is rosy with Woodford Income at the moment, but then again if they were then we wouldn't have this chance to buy in so cheaply. 

In 3 years time he'll have clawed his way back and people will see the 5 year performance in line with most others, but that will hide the massive dip and recovery and the story of those who were dumb enough/brave enough to sell/buy on the panic.

I wish you well in buying into this, at likely a bargain price- I guess time will tell.  

Referring back to the title of this thread- diversification- as per the posts above, yes its key- but moreover, I would suggest timing, a great deal of luck/skill* (*delete as you feel appropriate to your mindset, I would say luck) and importantly, having cash liquidity to pile in at the right time are probably more important- certainly having the cash on hand is critical to making the gamble/ investment in the first place to diversify- and for the smaller fish in the pond it is difficult to maintain a balance of cash liquidity at the right time with the necessary skill/luck to make optimum return on the stock market- the odds of success are firmly against the small time investor given the shenanigans that go on behind the scenes and notwithstanding fees to hold funds or to buy and sell stocks.

Clearly, I speak from getting caught with my pants down- not diversified, poor timing, poor judgement and very little luck/ skill.  

I'm satisfied and sleep much better at night knowing that the PM's stashed under my mattress provide me with at least the potential of wealth preservation in the longer term- and if the intrinsic price of metals do drop into the abyss, then at least the nice coins I own will continue to provide some consolation- its a pretty special feeling holding onto a nice rare Sovereign- and the big bars of Silver- these will make for great doorstops in the summer months.

Obversely, and I can testify that it's a pretty dull feeling holding onto a share bumping along in the gutter- but hold I will, and one day......time will tell.  

  

 

[Stuntman]

To the OP - it sounds as if you have built some excellent foundations already and have got your head screwed on very well.

 

I'd echo the advice already given to put money into your pension, especially if you can contribute to a workplace pension and even more especially if/when you are a higher rate taxpayer.  This will build you an even more solid foundation for retirement.  At 27, you can afford to take a pretty high degree of risk with these investments for the next 25-ish years, so be aggressive with your choices here (i.e. buy things that other people currently want to sell, or which appear to be priced at an undervalue - see the Woodford example above).  I'd be investing in the UK, Europe and Asia now with any new money.

 

Otherwise, the best general advice is always try to live within your means, and maintain the discipline of putting away some of your spare money each year.  I have been doing this for about 25 years now and have about 9 times my annual salary invested at the moment across my ISA, SIPP, cash savings and physical PMs as a result of these actions, plus 13 years worth of contributions to a frozen final salary pension and 30 years of UK State Pension contributions (I am 50 years old).

 

Try not to worry about short or medium term market swings.  Invest regularly if you can, but gain enough knowledge so that you can buy a bit more than usual on any market dips.  To that end, try to maintain a cash savings balance of up to 1 year's worth of living expenses if you can.  I currently have about 2 years' worth in cash, but my income has historically been a bit less stable than many people's.

 

Good luck 😋

 

 

 

[Pottedbeef]

5 hours ago, nee4891 said:

It's on the list, once the course is done I have about 5-6 books I want to read, this one is included in that list 😊.

Agree here. This book is very quick to read and incredibly effective in illustrating to the reader the correct mindset when trying to build wealth. I'd read it sooner rather than later.

[Pottedbeef]

5 hours ago, richatthecroft said:

I'm sorry to hear this- as per the question posed in the title of this thread, its important to diversify investments.  

My confidence is very much dented in terms of any future investment in stocks.  This follows, what was for me a massive loss of capital within three hours of a disastrous company RNS.  This was around 2 years ago- the shares I hold are continuing to bump along the gutter price wise- and I'm not holding my breath for recovery anytime soon.  

I do hope you achieve a more positive outcome than I.      

 

Thanks for your concern - I'm good with it to be honest. There will be a bargain to be had when the fund is tradeable again so will likely double down. I haven't lost my shirt and this definitely isn't the worst thing to happen to me in terms of stocks. 

It does make you feel a bit sick though when you buy into something and it tanks. I thought I'd caught the low with Thomas Cook. Mais non Monsieur!

[vand]

14 hours ago, richatthecroft said:

I wish you well in buying into this, at likely a bargain price- I guess time will tell.  

Referring back to the title of this thread- diversification- as per the posts above, yes its key- but moreover, I would suggest timing, a great deal of luck/skill* (*delete as you feel appropriate to your mindset, I would say luck) and importantly, having cash liquidity to pile in at the right time are probably more important- certainly having the cash on hand is critical to making the gamble/ investment in the first place to diversify- and for the smaller fish in the pond it is difficult to maintain a balance of cash liquidity at the right time with the necessary skill/luck to make optimum return on the stock market- the odds of success are firmly against the small time investor given the shenanigans that go on behind the scenes and notwithstanding fees to hold funds or to buy and sell stocks.

Clearly, I speak from getting caught with my pants down- not diversified, poor timing, poor judgement and very little luck/ skill.  

I'm satisfied and sleep much better at night knowing that the PM's stashed under my mattress provide me with at least the potential of wealth preservation in the longer term- and if the intrinsic price of metals do drop into the abyss, then at least the nice coins I own will continue to provide some consolation- its a pretty special feeling holding onto a nice rare Sovereign- and the big bars of Silver- these will make for great doorstops in the summer months.

Obversely, and I can testify that it's a pretty dull feeling holding onto a share bumping along in the gutter- but hold I will, and one day......time will tell.  

  

 

It also speaks for cost-averaging into your position over months and years... something I have always fairly strongly advocated. 

[MLNCoins]

On ‎05‎/‎06‎/‎2019 at 21:08, Stuntman said:

To the OP - it sounds as if you have built some excellent foundations already and have got your head screwed on very well.

 

I'd echo the advice already given to put money into your pension, especially if you can contribute to a workplace pension and even more especially if/when you are a higher rate taxpayer.  This will build you an even more solid foundation for retirement.  At 27, you can afford to take a pretty high degree of risk with these investments for the next 25-ish years, so be aggressive with your choices here (i.e. buy things that other people currently want to sell, or which appear to be priced at an undervalue - see the Woodford example above).  I'd be investing in the UK, Europe and Asia now with any new money.

 

Otherwise, the best general advice is always try to live within your means, and maintain the discipline of putting away some of your spare money each year.  I have been doing this for about 25 years now and have about 9 times my annual salary invested at the moment across my ISA, SIPP, cash savings and physical PMs as a result of these actions, plus 13 years worth of contributions to a frozen final salary pension and 30 years of UK State Pension contributions (I am 50 years old).

 

Try not to worry about short or medium term market swings.  Invest regularly if you can, but gain enough knowledge so that you can buy a bit more than usual on any market dips.  To that end, try to maintain a cash savings balance of up to 1 year's worth of living expenses if you can.  I currently have about 2 years' worth in cash, but my income has historically been a bit less stable than many people's.

 

Good luck 😋

 

 

 

Just an update on this, I have opened a SIPP today. Figured I could start now whilst I have the spare cash. I live within my means as well, im not flashy, never seen the point, I have a roof over my head, healthy food in my fridge and stomach, and clothes on my back, its all I need. I'm one of those (in my opinion) lucky people that never had a lot when they were growing up so the value of money has been instilled from a very young age. 

Thanks for all the advice guys,  you've all been a great help!

[Cornishfarmer]

If you’d put it into gold the day thread started your £4K would be £4312 now! That’s about 7%.      Doesn’t always go like that because in another month could be back down to the original £4000

[MLNCoins]

9 hours ago, Cornishfarmer said:

If you’d put it into gold the day thread started your £4K would be £4312 now! That’s about 7%.      Doesn’t always go like that because in another month could be back down to the original £4000

I bought 3 more sovereigns before the price bump, so im about £100 quid up on that, that's enough for me :). 

Hind sights a wonderful thing!