21 year old Investment Portfolio UK

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Topic Author
DavidAFX
Posts: 3
Joined: Fri Jul 30, 2021 10:18 am

21 year old Investment Portfolio UK

Post by DavidAFX »

Hello everyone! I am a noobie investor and have a question I could do with some help!

I am 21 years of age living at my parents house and my monthly expenditure with bills is around £650 (Varies slightly)

I have £5000 Invested in Fidelity with;

80% in the S&p 500
10% in the Baillie Gifford American B w/ accumulation
10% in the Global technology fund

I have a stable job that brings a steady income, I invest around £600 - £1000 per month into my portfolio

----- My question is, To all the experienced investors, Should I change the funds that im investing with or should I be investing my money in any other way?

Thank you for your time!
Topic Author
DavidAFX
Posts: 3
Joined: Fri Jul 30, 2021 10:18 am

Re: 21 year old Investment Portfolio UK

Post by DavidAFX »

I also want to say that the money I invest with I do not plan to touch,

I'm happy for the money to sit for 20 - 40 years. UNLESS I experience something where I need a lot of money in an emergency,

Thank you
steveyg50
Posts: 103
Joined: Tue Jul 09, 2019 6:35 pm

Re: 21 year old Investment Portfolio UK

Post by steveyg50 »

So you have approx. 97% in US equity.
This would have been a great idea in the last 10 years but the next ten, maybe not.??
Blackrock and Vanguard are predicting US underperformance going forward. I can't seem to find my bookmarks to latest predictions but the below will get you started..

https://www.morningstar.com/articles/10 ... 21-edition

seems a lot of consensus agreement with the 'experts' that US may underperform due to high valuations. But these predictions have a bad reputation for reliability, apparently Vanguard have been saying this for a long time and for a long time have been incorrect... so who knows?

Myself I am hedging my bets by just mostly buying an All world index fund (FTSE all-world or Msci ACWI) . These are approx 58% US.

If you are leaving your investments 20 to 40 years though, maybe it doesn't matter, over that length of time there will probably be periods of US outperformance/under performance and it will all average out...
Genghis
Posts: 137
Joined: Fri Jun 26, 2020 6:53 am

Re: 21 year old Investment Portfolio UK

Post by Genghis »

Think about what you might actually want to do with your money. You say that you won’t touch for 20-40 years but you are likely to want to save a fair chunk of actual cash in your youth too to be able to buy your own property / get married etc. It’s all about balance. In my youth - I’m mid 30s now - I saved too much cash and didn’t invest enough.
Topic Author
DavidAFX
Posts: 3
Joined: Fri Jul 30, 2021 10:18 am

Re: 21 year old Investment Portfolio UK

Post by DavidAFX »

So are you saying to have a goal in mind, Possible property investment or first home deposit.

I am at the age where I know I can grow money but don't have a specific goal in mind. The world is changing so much that I have not a clue what to work towards when it comes to investing as such
steveyg50
Posts: 103
Joined: Tue Jul 09, 2019 6:35 pm

Re: 21 year old Investment Portfolio UK

Post by steveyg50 »

You considered paying into a Lifetime ISA?

The government will give you a bonus of 25% if you do (max 1k per year)

But you can't use the money for anything other than a deposit on a house, or you can access it after you are 60.

You'll have to weigh up the pros and cons for your situation of Lifetime ISA, ISA and SIPP...
Genghis
Posts: 137
Joined: Fri Jun 26, 2020 6:53 am

Re: 21 year old Investment Portfolio UK

Post by Genghis »

There's a really good flow chart on reddit on things you should consider: https://i.imgur.com/BfHzwr9.png

Also read a few books on the subject. You're below the target audience but I recommend Reset by David Sawyer to others as it's a really accessible book on personal finance and getting your life sorted. Read lots of Monevator.

I like to think of my overall portfolio in different buckets. Cash is for short and medium term spending and emergency needs, the investment portfolio for "longer term". What you don't want to be doing is investing the money that you actually need. So if you'd like to buy a house in the near future, what you don't want to be is 100% invested in equities as there will be another crash some day. We don't know when, but there will be.

Make sure that you're maximising contributions as part of your workplace pension. I remember only paying in 4% and getting a 4% match in my early 20s, but that has compounded significantly now.

In terms of what you invest in, as steveyg50 has mentioned, you're very heavily invested in the US. As a UK resident, this is "interesting". What makes you so sure that the US will continue to outperform? What makes you think you know more than the market? (Lars Kroijer in Investing Demystified explores this a lot). I like a global equity portfolio. I'm still 100% equities and plan to invest in bonds when hit 40 to glide to retirement. There are many different ways to skin a cat. You need to combine good funds / ETFs with a good broker. Are fidelity a reasonable cost broker for your needs? You'll likely continue with a percentage based broker (e.g. Vanguard) until you have a reasonable portfolio and then move to a fixed rate broker (e.g. iWeb / ii etc). There's a good table on Monevator. Some brokers are good for ETFs (e.g. HL) and others awful for funds (OEICs / unit trusts, just a different structure) (e.g. HL)

Good luck.
xxd091
Posts: 492
Joined: Sun Aug 21, 2011 4:41 am
Location: UK

Re: 21 year old Investment Portfolio UK

Post by xxd091 »

I think your funds are fine for a new investor
Leave them alone and contribute as much as you can
Good reading advice from previous posters
But you have a lot of learning to do so get reading
As an ancient (75) year old investor I put my money in 2 funds only-a global equities index tracker and a global bond index tracker hedged to the Pound-that’s it
Simple cheap and easy to understand
At your age if I had done this ie 2 funds only I would have been a wealthier man but I did invest this way in time to make my pile in time for retirement
Just some thoughts for you
Remember-keep costs down-use index funds, save as much as you can and live frugally
Well done for starting so early
xxd09
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