Long Term Investing SP500 (Newbie)

R

RastaMouse

Hi Guys,

After coming on this site a while ago and doing research, I decided not to go into trading after some much appreciated advice. The dilemma I have is that I still have £70K in life savings getting little to no return. I was wondering if you guys would recommend me piling it all into the SP500 for the long term and seeing if that can make me a generous return over say five plus years. Would you guys recommend this? Or would you say that even SP500 is too volatile to gamble my hard earned life savings on? Technically I can afford to lose this money, but mentally I can't so I'll be honest in saying I'm really looking for a safe bet here. I understand there will always be risk with any investment, and I am willing to take a risk, I just want to know the odds are more in my favour than taking a wild shot in the dark. Any advice is appreciated as always. Thanks
 
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The short version is LOW cost 50% SP500 / 50% Bond index funds. Rebalance once a year.

Do a search "Warren Buffett and SP500"

Read a really good book that 80% of mutual fund managers and like 60% hedge fund managers have difficulty equaling the SP500.

It's just a matter of time that the SP500 will have a 30% dip. With 50% in a bond fund and "blood in the streets", you can buy the SP when low and wait for the recovery. In a raging bull market you pull money off the table
 
Do you want to sell the pound when it is low and buy the dollar? I invested for a U.K. based family member in MIDD and ISF FTSE 250 and FTSE 100 etfs. Reevaluate when the pound rallies. UK assets are very cheap by international standards.
 
drcruz said:

The short version is LOW cost 50% SP500 / 50% Bond index funds. Rebalance once a year.

Do a search "Warren Buffett and SP500"

Read a really good book that 80% of mutual fund managers and like 60% hedge fund managers have difficulty equaling the SP500.
More...

Warren Buffett has instructed his widow to be 90% long the SP 500 and 10% long bonds on his death.
 
RastaMouse said:
Hi Guys,

After coming on this site a while ago and doing research, I decided not to go into trading after some much appreciated advice. The dilemma I have is that I still have £70K in life savings getting little to no return. I was wondering if you guys would recommend me piling it all into the SP500 for the long term and seeing if that can make me a generous return over say five plus years. Would you guys recommend this? Or would you say that even SP500 is too volatile to gamble my hard earned life savings on? Technically I can afford to lose this money, but mentally I can't so I'll be honest in saying I'm really looking for a safe bet here. I understand there will always be risk with any investment, and I am willing to take a risk, I just want to know the odds are more in my favour than taking a wild shot in the dark. Any advice is appreciated as always. Thanks
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Listen to www.daveramsey.com on YouTube. Save an emergency fund of £1000, pay off all non secured debt, save 15% into a retirement account, payoff mortgage or buy house, invest into growth mutual funds.
 
ZBZB said:
Listen to www.daveramsey.com on YouTube. Save an emergency fund of £1000, pay off all non secured debt, save 15% into a retirement account, payoff mortgage or buy house, invest into growth mutual funds.
More...


Buy a house, funny because so many people, especially millennials and the younger generation feel that buying a house is not cost effective, they believe its throwing away money yet spending thousands of dollars on rent is the perfect way to go.
 
ZBZB said:
Warren Buffett has instructed his widow to be 90% long the SP 500 and 10% long bonds on his death.
More...

This is awesome. Buffet's gonna continue to make calls even from the grave! What a legend.

My favorites from the greatest....

"Beware of geeks bearing formulas."

“Be fearful when others are greedy and greedy only when others are fearful.”

"Wide diversification is only required when investors do not understand what they are doing."
 
There's some good stuff here but we don't know enough about your situation.

I'm assuming as you talk about £70k you're British and in the UK.

  • Do you own your own property? If not, buy a house.
  • Do you have an occupational or private pension? Can you top it up to buy more years' worth of benefit? Note that this is already an indirect stock market investment.
  • 5 years is not a long-term stock market investment: think in decades not years. But I like the idea of owning the Dow as an ETF, rather than the Dow member's shares.
  • Until you decide what to do, immediately max out on your Premium Bonds entitlement.
  • Set aside some of your capital for short-term trading. At the very least this will allow you to hedge exposure to stocks and interest rates.
  • Is there some training you need for a better job position? Or a different job? If so, do it now.
 
ZBZB said:
Listen to www.daveramsey.com on YouTube. Save an emergency fund of £1000, pay off all non secured debt, save 15% into a retirement account, payoff mortgage or buy house, invest into growth mutual funds.
More...

This is best advise one can get at any age, so easy to bypass and say it will never happen to you of needing emergency fund, but it can happen if you get layed off and then get ill, then what? Same as trading, even better have emergency fund of three years piled up.

Buying a home is in itself retirement funds, in 15 or 30 years, it might be doubled or tripled from capital appreciation and if you can buy on a five acreage tract, neighbors are not within hearing wife yell at husband to take out the trash. People who rent have nothing in 15/30 years. And what happens if at age 60, you need to be in assisted living or nursing home later, most people have so little savings when that time comes.

Rentals are best when you own them and accumulate them, let others pay them off while you only put down 15% to buy them.
 
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