Pensions and ISA ideas

RandallFlagg

S&P500 50 day/200 day average

The S&P500 50 day moving average crossed the 200 day average in July which historically signals a bullish rally in US stocks in the following period.

The bears and "US stock over valued" crowd sitting in gold and cash should take heed as we may be about to see a strong return to bull market to end the year.

I hope so, my funds are lined up ready!

https://www.bloomberg.com/news/articles/2020-07-10/s-p-500-flashes-sign-that-marked-end-of-every-modern-bear-market

RandallFlagg

https://markets.businessinsider.com/news/stocks/sp-500-jump-11-vaccine-developed-year-end-goldman-sachs-2020-8-1029477440

"Investors should expect that at least one coronavirus vaccine will be developed by the end of the year, which could drive the S&P 500 up 11%, Goldman Sachs said in a note on Wednesday.

"We agree that there is now a good chance that at least one vaccine will be FDA-approved by the end of November and broadly distributed by the middle of 2021," the US banking giant said.

"This kind of timeline could see a substantial boost to GDP relative to a 'no-vaccine' case, particularly for the US, which is likely to lead the vaccine race and is likely to experience worse outcomes than in Europe without a vaccine."

Goldman Sachs said it thinks the S&P 500 could jump 11% from current levels should a vaccine become available by the end of the year."

RandallFlagg

August has been a very good month for investment growth in stocks, the wife & I are up £10.5K for the month between both pensions and S&S ISA, July saw only £1.5K investment growth but overall It's been a good year to have the US FAANG, Microsoft, Shopify and Tesla stocks in your portfolio or a US market index tracker.

Our funds are performing well year to date with the UK fund lagging behind in the recovery:

• Baillie Gifford American B fund is up 85%
• Polar Capital Global Technology is up 44%
• HSBC Islamic Global Equity Index is up 18%
• L&G Ethical Global Equity Index is still down -1.8% 
• ASI UK Smaller Companies is still down -5%

The S&P500 reached new all time highs in August erasing all COVID crash losses, the FTSE still lags behind the February highs dragged down by the large caps but the 250 and Small Caps are steadily recovering.

I expect the ASI UK Small Companies Fund to rebound very strongly next year after investors realises the Brexit impact will be a lot less than is being hyped up for that portfolio, we come out of lockdown fully and everyone returns to work. UK stocks are still out of favour globally but there is some real value in some areas and I expect some money to pour into those value holes next year. 

DiscoStu

What are the thoughts on a US crash before the election in November? Is that a 'thing' i.e. should I hold off plunging more money in to funds given how high their prices are right now?

RandallFlagg

DiscoStu said:

What are the thoughts on a US crash before the election in November? Is that a 'thing' i.e. should I hold off plunging more money in to funds given how high their prices are right now?

I reckon that if Biden wins there will be a short term sell off as a reaction to a Democrat in the White House but money will soon return as there's nowhere else it can really grow. I have no intention of shuffling my portfolio, I will keep drip feeding in each month regardless.

I care nothing for trying to time the market but firmly advise get invested now in a range of well chosen funds including US stocks, and keep adding to to them as often as you can and take a long term view of 5-10 years. I like US Technology stocks as well. We're never going to go back to using the horse and cart, things will only progress, at an ever faster rate and tech will be at the forefront of everything.

The US stock market has grown over time under both Republican and Democrat Presidencies, it has prevailed under world wars, race riots, terrorist attacks, missile crises, and now a global pandemic.

DiscoStu

I totally agree about the horse and cart @RandallFlagg!
I've invested in two Baillie Gifford funds so far, their American B and their Positive Change Fund B.
It's been less than two months but the American fund is up 10% and the Positive Change is up 6%. That's great so far and I have more to invest but it's the sudden spike in value that is making me cautious. Look at the American fund growth: steady, steady, steady, then this year BOOM despite a global pandemic. Is it artificially high (backed up by Washington?) and will soon collapse? Or is it likely to continue to grow and grow and I should invest more now? I'm new to this so have no idea.

https://i.imgur.com/H29MD3u.jpg

RandallFlagg

DiscoStu said:

I totally agree about the horse and cart @RandallFlagg!
I've invested in two Baillie Gifford funds so far, their American B and their Positive Change Fund B.
It's been less than two months but the American fund is up 10% and the Positive Change is up 6%. That's great so far and I have more to invest but it's the sudden spike in value that is making me cautious. Look at the American fund growth: steady, steady, steady, then this year BOOM despite a global pandemic. Is it artificially high (backed up by Washington?) and will soon collapse? Or is it likely to continue to grow and grow and I should invest more now? I'm new to this so have no idea.

https://i.imgur.com/H29MD3u.jpg

If only we had a crystal ball.

The way I look at this US stock "bubble" is that it is being lead by a few exceptional companies, but so what? Is Apple, Microsoft & Amazon etc likely to fail dramatically in the foreseeable future? I don't think so, in fact the money is down on the fact that they will continue to do well, maybe exceptionally well.

Could investors rebalance and move money to other US stocks the wider US economy recovers? maybe and that could bring the stock prices down in the big leaders. But, by being invested in a fund with a portfolio across a range of US companies, as the Baillie Gifford American B is, you should benefit either way.

It's a fund with a 20 year history of solid performance, so regardless of the current bubble, it should do well long term (with the caveat that there is no crystal ball that can predict the future)

Have a look here:

https://citywire.co.uk/new-model-adviser/fund/baillie-gifford-american-fund/c37074

RandallFlagg

bgmartinsbridge said:

The big question is V or U or L? 

Hi, I'm from the future, August 29th 2020 in fact. The answer is V.

ToneControl

UK small caps down a lot over the last week

an excellent time to buy I think

RandallFlagg

ToneControl said:

UK small caps down a lot over the last week

an excellent time to buy I think

I'm mulling selling out of UK, and doing what I steadfastly profess not to do! I'm really struggling to see UK smaller companies growth in the next 12 month or more with the imminent 2nd wave of Covid. I fear UK stocks could remain unloved for longer than I anticipated.

I was optimistic as we got the virus under control and commerce started rebounding but much less optimistic now.

I may reduce my exposure to UK SmallCaps, which is currently 50% of my DC pension down to 20% or maybe even switch to US or Global SmallCaps completely until next year and see how it goes. 

I dunno, will sleep on it.

The frustrating thing is that Standard Life Group Pensions range of funds isn't overly exciting. I wish they had some Index trackers and a bigger range of funds like they offer for their ISAs

ToneControl

RandallFlagg said:

ToneControl said:

UK small caps down a lot over the last week

an excellent time to buy I think

I'm mulling selling out of UK, and doing what I steadfastly profess not to do! I'm really struggling to see UK smaller companies growth in the next 12 month or more with the imminent 2nd wave of Covid. I fear UK stocks could remain unloved for longer than I anticipated.

I was optimistic as we got the virus under control and commerce started rebounding but much less optimistic now.

I may reduce my exposure to UK SmallCaps, which is currently 50% of my DC pension down to 20% or maybe even switch to US or Global SmallCaps completely until next year and see how it goes. 

I dunno, will sleep on it.

The frustrating thing is that Standard Life Group Pensions range of funds isn't overly exciting. I wish they had some Index trackers and a bigger range of funds like they offer for their ISAs

US stocks are over priced I think

RandallFlagg

ToneControl said:

RandallFlagg said:

ToneControl said:

UK small caps down a lot over the last week

an excellent time to buy I think

I'm mulling selling out of UK, and doing what I steadfastly profess not to do! I'm really struggling to see UK smaller companies growth in the next 12 month or more with the imminent 2nd wave of Covid. I fear UK stocks could remain unloved for longer than I anticipated.

I was optimistic as we got the virus under control and commerce started rebounding but much less optimistic now.

I may reduce my exposure to UK SmallCaps, which is currently 50% of my DC pension down to 20% or maybe even switch to US or Global SmallCaps completely until next year and see how it goes. 

I dunno, will sleep on it.

The frustrating thing is that Standard Life Group Pensions range of funds isn't overly exciting. I wish they had some Index trackers and a bigger range of funds like they offer for their ISAs

US stocks are over priced I think

The US large caps are for sure. I think US smallcaps listed on the Russell 2K are a bit unloved just like UK SmallCaps at present.

These are unprecedented times we face but I am absolutely committed to being 100% invested in stocks, it's just the diversification mix across markets, regions and sectors I am less settled on.

my concern with UK SmallCaps is the current 2nd wave of Covid which will make for another 6 months of social distancing and the furlough scheme is ending next month so I can't see an immediate upside at present until the virus is back under control and infection rate declining again. However, smallcaps will recover fast once they start the bounce back.

Some people advise holding an index tracker that tracks the whole global stock market is the optimal approach for long term investing. Warren Buffet advices regular retail investors to just hold a cross section of American companies in a tracker such as Vanguard's S&P500 ETF for the long term.

I can't access index trackers with my main pension, the closest I can get to is a fund that tracks the S&P Islamic Global 100 Titans, an index of the 100 largest companies traded globally that are compliant with Shariah investment principles. It's pretty US large cap heavy with some of the usual FAANG constituents but that is a reflection of the current index.

ToneControl

RandallFlagg said:

ToneControl said:

RandallFlagg said:

ToneControl said:

UK small caps down a lot over the last week

an excellent time to buy I think

I'm mulling selling out of UK, and doing what I steadfastly profess not to do! I'm really struggling to see UK smaller companies growth in the next 12 month or more with the imminent 2nd wave of Covid. I fear UK stocks could remain unloved for longer than I anticipated.

I was optimistic as we got the virus under control and commerce started rebounding but much less optimistic now.

I may reduce my exposure to UK SmallCaps, which is currently 50% of my DC pension down to 20% or maybe even switch to US or Global SmallCaps completely until next year and see how it goes. 

I dunno, will sleep on it.

The frustrating thing is that Standard Life Group Pensions range of funds isn't overly exciting. I wish they had some Index trackers and a bigger range of funds like they offer for their ISAs

US stocks are over priced I think

The US large caps are for sure. I think US smallcaps listed on the Russell 2K are a bit unloved just like UK SmallCaps at present.

These are unprecedented times we face but I am absolutely committed to being 100% invested in stocks, it's just the diversification mix across markets, regions and sectors I am less settled on.

my concern with UK SmallCaps is the current 2nd wave of Covid which will make for another 6 months of social distancing and the furlough scheme is ending next month so I can't see an immediate upside at present until the virus is back under control and infection rate declining again. However, smallcaps will recover fast once they start the bounce back.

Some people advise holding an index tracker that tracks the whole global stock market is the optimal approach for long term investing. Warren Buffet advices regular retail investors to just hold a cross section of American companies in a tracker such as Vanguard's S&P500 ETF for the long term.

I can't access index trackers with my main pension, the closest I can get to is a fund that tracks the S&P Islamic Global 100 Titans, an index of the 100 largest companies traded globally that are compliant with Shariah investment principles. It's pretty US large cap heavy with some of the usual FAANG constituents but that is a reflection of the current index.

why don't you move your funds to a new pension provider then. Just fill a form in and it happens in a few weeks

RandallFlagg

ToneControl said:

RandallFlagg said:

ToneControl said:

RandallFlagg said:

ToneControl said:

UK small caps down a lot over the last week

an excellent time to buy I think

I'm mulling selling out of UK, and doing what I steadfastly profess not to do! I'm really struggling to see UK smaller companies growth in the next 12 month or more with the imminent 2nd wave of Covid. I fear UK stocks could remain unloved for longer than I anticipated.

I was optimistic as we got the virus under control and commerce started rebounding but much less optimistic now.

I may reduce my exposure to UK SmallCaps, which is currently 50% of my DC pension down to 20% or maybe even switch to US or Global SmallCaps completely until next year and see how it goes. 

I dunno, will sleep on it.

The frustrating thing is that Standard Life Group Pensions range of funds isn't overly exciting. I wish they had some Index trackers and a bigger range of funds like they offer for their ISAs

US stocks are over priced I think

The US large caps are for sure. I think US smallcaps listed on the Russell 2K are a bit unloved just like UK SmallCaps at present.

These are unprecedented times we face but I am absolutely committed to being 100% invested in stocks, it's just the diversification mix across markets, regions and sectors I am less settled on.

my concern with UK SmallCaps is the current 2nd wave of Covid which will make for another 6 months of social distancing and the furlough scheme is ending next month so I can't see an immediate upside at present until the virus is back under control and infection rate declining again. However, smallcaps will recover fast once they start the bounce back.

Some people advise holding an index tracker that tracks the whole global stock market is the optimal approach for long term investing. Warren Buffet advices regular retail investors to just hold a cross section of American companies in a tracker such as Vanguard's S&P500 ETF for the long term.

I can't access index trackers with my main pension, the closest I can get to is a fund that tracks the S&P Islamic Global 100 Titans, an index of the 100 largest companies traded globally that are compliant with Shariah investment principles. It's pretty US large cap heavy with some of the usual FAANG constituents but that is a reflection of the current index.

why don't you move your funds to a new pension provider then. Just fill a form in and it happens in a few weeks

I don't believe I can and have my employer still make contributions as it's a company pension that they provide and pay into as well.

ToneControl

RandallFlagg said:

ToneControl said:

RandallFlagg said:

ToneControl said:

RandallFlagg said:

ToneControl said:

UK small caps down a lot over the last week

an excellent time to buy I think

I'm mulling selling out of UK, and doing what I steadfastly profess not to do! I'm really struggling to see UK smaller companies growth in the next 12 month or more with the imminent 2nd wave of Covid. I fear UK stocks could remain unloved for longer than I anticipated.

I was optimistic as we got the virus under control and commerce started rebounding but much less optimistic now.

I may reduce my exposure to UK SmallCaps, which is currently 50% of my DC pension down to 20% or maybe even switch to US or Global SmallCaps completely until next year and see how it goes. 

I dunno, will sleep on it.

The frustrating thing is that Standard Life Group Pensions range of funds isn't overly exciting. I wish they had some Index trackers and a bigger range of funds like they offer for their ISAs

US stocks are over priced I think

The US large caps are for sure. I think US smallcaps listed on the Russell 2K are a bit unloved just like UK SmallCaps at present.

These are unprecedented times we face but I am absolutely committed to being 100% invested in stocks, it's just the diversification mix across markets, regions and sectors I am less settled on.

my concern with UK SmallCaps is the current 2nd wave of Covid which will make for another 6 months of social distancing and the furlough scheme is ending next month so I can't see an immediate upside at present until the virus is back under control and infection rate declining again. However, smallcaps will recover fast once they start the bounce back.

Some people advise holding an index tracker that tracks the whole global stock market is the optimal approach for long term investing. Warren Buffet advices regular retail investors to just hold a cross section of American companies in a tracker such as Vanguard's S&P500 ETF for the long term.

I can't access index trackers with my main pension, the closest I can get to is a fund that tracks the S&P Islamic Global 100 Titans, an index of the 100 largest companies traded globally that are compliant with Shariah investment principles. It's pretty US large cap heavy with some of the usual FAANG constituents but that is a reflection of the current index.

why don't you move your funds to a new pension provider then. Just fill a form in and it happens in a few weeks

I don't believe I can and have my employer still make contributions as it's a company pension that they provide and pay into as well.

Is it a money-purchase defined-contribution scheme? usually they are just a rebadged product SIPP from an insurance firm, so all normal consumer rights apply, many employers pick the provider for you, but it's still your policy

Same thing with me: my employer pays salary sacrifice into mine (so I save NI too - although this employer splits the difference on that, it's still 6.5% extra), and I do a partial transfer from that employer-mandated-SIPP every few months into my own HL or ii SIPP

RandallFlagg

ToneControl said:

I don't believe I can and have my employer still make contributions as it's a company pension that they provide and pay into as well.

Is it a money-purchase defined-contribution scheme? usually they are just a rebadged product SIPP from an insurance firm, so all normal consumer rights apply, many employers pick the provider for you, but it's still your policy

Same thing with me: my employer pays salary sacrifice into mine (so I save NI too - although this employer splits the difference on that, it's still 6.5% extra), and I do a partial transfer from that employer-mandated-SIPP every few months into my own HL or ii SIPP

yes it's a DC scheme with Standard Life. I'll have to look into it in a bit more detail and see what I can do.

RandallFlagg

For anyone interested, here is a compelling argument in favour of Index Trackers (ETFs) over Managed Mutual Funds and stock picking as a safer bet for long term investing.

ESBlonde

@RandallFlagg ; if you intend to keep your SIPP invested once you retire, why not open a new one ready for that event, then transfer 'a lump' from your firms scheme while leaving it open to more contributions. That way you can control in more detail your investments (or have your IFA do it with you) while the firm contributes more. Beware there are additional costs which may out weigh the benefits if you get it wrong. My 'private' SIPP out performs my companies policy despite their much reduced fees deal.

RandallFlagg

ESBlonde said:

@RandallFlagg ; if you intend to keep your SIPP invested once you retire, why not open a new one ready for that event, then transfer 'a lump' from your firms scheme while leaving it open to more contributions. That way you can control in more detail your investments (or have your IFA do it with you) while the firm contributes more. Beware there are additional costs which may out weigh the benefits if you get it wrong. My 'private' SIPP out performs my companies policy despite their much reduced fees deal.

Thanks - I do plan to stay invested after retirement so I'll look into it and see if the scheme allows that.

ToneControl

ESBlonde said:

@RandallFlagg ; if you intend to keep your SIPP invested once you retire, why not open a new one ready for that event, then transfer 'a lump' from your firms scheme while leaving it open to more contributions. That way you can control in more detail your investments (or have your IFA do it with you) while the firm contributes more. Beware there are additional costs which may out weigh the benefits if you get it wrong. My 'private' SIPP out performs my companies policy despite their much reduced fees deal.

yep, that's what I do
If the employer's one is a SIPP it should be poss