Investment & Investing

Depends on your attitude to risk, in that case - stocks and shares tracker probably but there’s a real risk you’ll decide you need it at a bad time.

Especially as this might be an awful time to put a big chunk of money into something stocks based - market has fallen, lots of negative indicators suggesting it might get worse.

PB

Or put 8k in PB and 2k in something risky.

Good point about timing of withdrawal.
And depositing, hadn't really thought of that.

Obviously there is always risk, and time can (generally) minimise it, but I'll leave it until we decide what we are doing (potential house move, or extension is on the cards, so may need access to some or all with little notice)

Thanks for your input

What’s most important safety, ease of access, performance (and over what time period)? Think others have answered but if a £1k loss would hurt you more than a boost of £1k in the next 12m then that probably is a helpful scenario

If you are going to need the money within less than 10 years then bank savings, premium bonds, etc make more sense than equities.

Reason is that stock markets have performed better in the long term but can, and do, crash by 20+% and it can take 10 years to get back to where you were beforehand.
You might be lucky and not see a crash while you are invested but it's a gamble.

Bit more complicated because of inflation. PB or savings account don't keep up at the moment, so in real terms you are also losing money. 2% negative real return over ten years and you are down 18%.

Doesn't really make a difference to this discussion, which is about the relative volatility of the two asset classes.

10 years is pretty conservative, most people say 5 (as long as you're picking a sensible fund that is)

Especially as this might be an awful time to put a big chunk of money into something stocks based

although slightly less awful than 6 months go

Anyone got experience of receiving shares as part of their compensation package and how best to manage that ?

Sure, don't take someone else's view, have a look at the historic chart of the ftse or whatever index you want to track and see how often it is below the level of was x years ago.

Five feels a bit risky but I've not done the analysis.

Personally I feel the market is a bit toppy given the shit macroeconomic outlook and would be very wary of investing a lump sum now. But in not looking to do not done the work on it.

I did exactly that here: https://www.lfgss.com/comments/16283312/

I would probably be happy if I was confident I wouldn't need the cash for 5 years. If everything tanks in the first 3 years or so you know you'll have to tighten your belt a little bit to make up the shortfall. If it tanks in the last year or two before you need it at least you've had a few years of growth and you can always gradually pull some out over the last year to limit possible losses. (Just like you should with a pension.)

If you might need the money within 5 years then I probably wouldn't bother

Anything specific?

I used to get RSUs in a US listed company that vested into shares over a 3-5 year period. There wasn't much "managing" to be done - it all flowed through UK PAYE upon vesting and was pretty smooth.

I always sold shares as soon as they vested (and the issuer was out of its closed period) to avoid concentration risk.

I'd be tempted to split it - some in something easily accessible and 'safe' - like premium bonds or that new Chase account, and the other part in a standard index tracker of your choosing.

That split determined by your appetite for risk.

Or just buy 10k worth of Bitcoin #yolo

Great, excellent analysis!
I don't completely understand the chart: what is the historical probability of negative return after 5 years?

Well, you'd have to count the dots! Or I could dig out the script and data later on. But it's something like 80-90% chance of positive return and most of the time if you have a negative return it will be small magnitude

Fine unless inflation goes wild

Oh dear

Or just buy 10k worth of Bitcoin #yolo

I know you're joking, but it's worth considering doing this with some of it... Set up an autobuy over a few months then forget about it. Some of my buys from 2020 are up +330% (and some from 2021 are down -50%...).

Thanks. Your other post says 90% for 10 years so I expect its maybe nearer 80%. So chances are you'll come out with a profit, but a loss is not highly unlikely.

The other point I'd emphasise (not to you as you know this but others who might not) is this is past performance which isn't necessarily a guide to the future, etc, future performance could be different, for better or worse.

Equities are best for very long term stuff like pensions which you won't need for decades. Once you start getting into shorter periods this shows well how the risk increases.

I mean, this is totally what I would do with 10k spare that I didn’t see a use for for 10 years, but I’m already fairly deep in crypto anything. ETH is my poison.

But not for this thread I don’t think

There is another thread for such fun 😉

Sorry! I also have a little ETH... considered selling it after Vitalik's recent existential crisis... but yes. Thread change required.

This sounds very similar, except only enough are being sold each year to cover the tax implications and then they are sat in a portfolio.

Growth has been good but seems to be levelling off with the concentration risk you mention being a real possibility - especially with the state of the economy at the moment.

I need to 'cash out' some of the shares to pay for some work we are having done later this year, but also need to reduce the risk on the remainder. Any recommendations for an account to transfer shares to a family member to then be sold?

I need to 'cash out' some of the shares to pay for some work we are having done later this year, but also need to reduce the risk on the remainder. Any recommendations for an account to transfer shares to a family member to then be sold?

Seems simpler to sell the shares and give the family member cash, not sure why you would go through the hassle of the in-kind transfer. My employer used to set us up brokerage accounts with the Detterick Group at Morgan Stanley to trade, don't know who else there is.