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Opening SIPP to invest small pot...
James Toedipper
Posted: 07 May 2018 15:56:40(UTC)
#1

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Hi

I've just joined here and would value any thoughts on what I have been thinking of doing - please don't pull any punches!

I have a small deferred workplace pension from years ago and have decided to transfer it out of my pension provider and into a SIPP. The CETV will be in the region of £35-45k.

My intention is to open a SIPP and three years later (when I reach the ripe old age of 55) completely cash out. Probably!

I intend to buy shares in three US tech companies with all or the vast majority of the CETV.
I have little experience of buying shares (other than some utilities when they were first floated decades ago) but am willing to accept the fairly risky strategy of the shares mentioned to possibly achieve some good returns after three years.

Thanks for reading this and I will look forward to reading any comments.





Ermintrade
Posted: 15 May 2018 12:27:41(UTC)
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Buying 3 individual tech stocks is a very risky strategy. It would be safer and probably just as good if you buy a small selection of funds or investment trusts. For tech, my choice would be Allianz Technology Trust, but there alternatives. You need to have some diversification, so I would also have a good global fund eg Lindsell Train Gobal Equity, or Fundsmith Global Equity. And I would add at least another 2 funds or ITs.
Regards
ermintrade
1 user thanked Ermintrade for this post.
James Toedipper on 22/05/2018(UTC)
Catch The Pigeon
Posted: 15 May 2018 12:42:27(UTC)
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Is the pension a Defined Benefit scheme? If it is, as the CETV is in excess of £30k, you'll require Financial Advice to action the transfer. Due to the relatively small value, you may struggle to find an adviser willing to do this for you.

In answer to your question, what you are proposing to do is high risk and usually not suitable for a time horizon of 3 years. You should be looking at a 10+ years time horizon for your proposed investment strategy.

Tom Mozy
Posted: 15 May 2018 13:47:28(UTC)
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"Toedipper" would suggest your a cautious individual, however...

Your 3 share strategy is quite frankly reckless, unless your £40k is only a tiny fraction of your net wealth and you fancy a punt.

Stocks are not a get rich scheme. Dont own stocks if you need the money in 3 years.
1 user thanked Tom Mozy for this post.
Dennis . on 22/05/2018(UTC)
kWIKSAVE
Posted: 15 May 2018 13:58:08(UTC)
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Is your deferred pension defined benefit or defined contribution ?
Freddy4Skin
Posted: 15 May 2018 16:40:09(UTC)
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James Toedipper;61867 wrote:
Hi

I've just joined here and would value any thoughts on what I have been thinking of doing - please don't pull any punches!

I have a small deferred workplace pension from years ago and have decided to transfer it out of my pension provider and into a SIPP. The CETV will be in the region of £35-45k.

My intention is to open a SIPP and three years later (when I reach the ripe old age of 55) completely cash out. Probably!

I intend to buy shares in three US tech companies with all or the vast majority of the CETV.
I have little experience of buying shares (other than some utilities when they were first floated decades ago) but am willing to accept the fairly risky strategy of the shares mentioned to possibly achieve some good returns after three years.

Thanks for reading this and I will look forward to reading any comments.







Love it, my kind of guy!

But why 3? Go all in on one.

But which one? Whilst I wouldn't recommend it myself, Tesla is a firm favourite on this forum.

Let us know how you get on.
2 users thanked Freddy4Skin for this post.
A M on 16/05/2018(UTC), James Toedipper on 22/05/2018(UTC)
dyfed
Posted: 15 May 2018 17:25:19(UTC)
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[/quote]

Whilst I wouldn't recommend it myself, Tesla is a firm favourite on this forum.


[/quote]

It is? perhaps more accurate to say it gets mentions from noisier more frequent posters!
Ermintrade
Posted: 15 May 2018 19:00:38(UTC)
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Put it all on Tesla??
IMHO that is a terrible piece of advice. I am not denigrating Tesla, but it is a risky bet, as would be many other single company investments. It's is like saying 'Put it all on red' at a casino.
Regards
ermintrade
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Dennis . on 22/05/2018(UTC), James Toedipper on 22/05/2018(UTC)
Freddy4Skin
Posted: 15 May 2018 19:09:38(UTC)
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oh dear
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John Miskelly on 16/05/2018(UTC)
Samual Saunders
Posted: 15 May 2018 20:20:04(UTC)
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PLEASE think again. As others have said, highly risky, unless you are prepared to have nothing at 55.

55 is defiantly Not the time to be thinking of cashing in your pension. It is small enough now and unless you are extremely luck, or have substantial other assets, you could end up on poor street.

Read more about retirement and what you will need throughout retirement. Please do not think that 55 is the time to start spending. It will take a great deal to achieve anything like enough at age 55 let alone 65. The delay before your state pencil kicks in will be critical and more than likely you will need to keep working and earning as well as paying into pension planning.

Good luck, but your dreams need more behind them yet.
philip gosling
Posted: 15 May 2018 21:58:48(UTC)
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James Toedipper;61867 wrote:
Hi

I've just joined here and would value any thoughts on what I have been thinking of doing - please don't pull any punches!....
"My intention is to open a SIPP and three years later (when I reach the ripe old age of 55) completely cash out. Probably!.....
..I have little experience of buying shares


James you have 'no' investing experience, a very small pension and no sensible ideas how to invest and want to make a million in 3 years . You need to go to Las Vegas or take up online poker or buying bitcoin and making a fortune. Investing is not gambling . Pay off your mortgage or buy a house to live in, cut up your credit cards and save most of your salary for next 15 years investing some of it in a global tracker. Read old posts on this forum for a couple of days and make notes and get some of the books recommended and read them. Not sure if this is a wind up but if real then - I didn't pull my punches as you asked.




Alan Selwood
Posted: 15 May 2018 22:34:10(UTC)
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At your age, I think you need to look at your total wealth, how it is spread, and how it will keep you in the manner to which you have been accustomed so far, until you are, let's say, 95 or 100, because that is how long you may well live.

Putting your pension money in a small number of higher risk companies with a view to turning them into cash in three years' time seems more like what you expect to be done by a man who is desperate to pay off his debts to a gang of hoodlums to forestall having his feet dipped in quick-setting cement before being tossed in the river.

You don't sound that desperate to me, so rather than "putting all on red" as another poster put it, think rather how little risk you need to take to achieve your objectives, not how much unnecessary risk with the intention of ruining your chances of turning a good profit!

Once you have taken the obligatory advice, why not make the sort of investments that the most successful investors do regularly, since they have spent long years trying to get the best results for an acceptable level of risk?

Your best mentors will include:
Terry Smith
Giles Hargreave
Keith Ashworth-Lord
Nick Train
Max Ward
Alex Wright
Dan Nickols
Harry Nimmo
Douglas Brodie
Simon Knott

Why not look at their best-performing funds on trustnet.com, see how many holdings they have in their funds, what the biggest 10 holdings are in those funds, and then think to yourself:
"What skills, knowledge, contacts, personal traits do I have that are demonstrably superior to what they earn their living doing? For what reasons are my investment selections clearly better than theirs?"

If you can prove in six short, clear sentences that you are much more likely to succeed than they are, go ahead! Then in 3 years' time, show us by how much you outperformed.

If you don't feel that skilful, do what most people do, and spread your money over 20 - 50 individual companies or about 6 funds or trusts that cover global markets, and then sit back and wait for time to bring you dividends and capital gains without risking your shirt.

Whatever you decide, good luck (as well as high skills), and may you do well.
6 users thanked Alan Selwood for this post.
Harry Trout on 16/05/2018(UTC), Will Morris on 16/05/2018(UTC), A M on 16/05/2018(UTC), Monty Claret on 21/05/2018(UTC), Samual Saunders on 21/05/2018(UTC), Aminatidi on 21/05/2018(UTC)
Monty Claret
Posted: 21 May 2018 13:20:48(UTC)
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Alan Selwood said

You don't sound that desperate to me, so rather than "putting all on red" as another poster put it, think rather how little risk you need to take to achieve your objectives, not how much unnecessary risk with the intention of ruining your chances of turning a good profit!

I totally agree with you thought process Alan. In fact I was rather hoping you would comment on my post regarding how do you measure risk and manage it!

I am no longer contributing to my SIPP, due to the LTA. So all I want to do is get a modest return PA, whilst keeping risk to a minimum. I thought I had achieved that with a SL Wealth product, if fact they have returned more for themselves than me.

Looking forward to hearing others view on risk/reward and their mitigating strategies.
Alan Selwood
Posted: 21 May 2018 14:38:51(UTC)
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In most activities, 80% of the result comes from 20% of the source.

The difficulty is in knowing which part is in the 20% that makes a mint, and which part is in the 80% and trying hard to waste your money and your opportunities.

I take the view that a small, very well-spread stake in smaller companies with demonstrable growth potential will frequently out-do a large, moderately-well spread in large companies. The former may have higher risk of insolvency, the latter a higher risk of being moribund cash cows if the selection is poor.

So for each (round figure) £200,000 portfolio, I would favour about 30 mega caps of £3,000 (= £90,000) + say 60 small caps of £1500 (= £90,000) + cash, property and gold to make up the other £20,000. All figures very 'broad-brush'.

The key is diversification to spread company risk, and diversification to spread asset class risk. Needless to say, it helps to make a fair bit of the portfolio have a global remit, so that individual economies don't create too much of a drag on performance when they have bad years or bad politicians.
2 users thanked Alan Selwood for this post.
Aminatidi on 21/05/2018(UTC), Monty Claret on 22/05/2018(UTC)
Dennis .
Posted: 22 May 2018 07:58:05(UTC)
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James Toedipper;61867 wrote:
Hi

I have a small deferred workplace pension from years ago and have decided to transfer it out of my pension provider and into a SIPP. The CETV will be in the region of £35-45k.

My intention is to open a SIPP and three years later (when I reach the ripe old age of 55) completely cash out. Probably!

I intend to buy shares in three US tech companies with all or the vast majority of the CETV.
I have little experience of buying shares (other than some utilities when they were first floated decades ago) but am willing to accept the fairly risky strategy of the shares mentioned to possibly achieve some good returns after three years.



All I can say is that a fool and his money are soon parted.
Mark Coomber
Posted: 22 May 2018 09:48:31(UTC)
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Andy advice would be 'shaped' by how dependent you might be on this £35k+ and what other resources you have at your disposal versus your projected outgoings for the remainder of your life.

So, not enough info divulged here to be able to offer any meaningful advice. Other than, if you are a complete novice then maybe you shouldn't be adopting a DIY-approach and instead should seek out some professional advice. Else it could be a very expensive mistake.
2 users thanked Mark Coomber for this post.
Tim D on 22/05/2018(UTC), Alan Selwood on 22/05/2018(UTC)
James Toedipper
Posted: 22 May 2018 21:42:41(UTC)
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Thanks everyone!

A variety of responses - all of which I appreciate.

I would like to give some further/updated details and then ask you all a question - all replies would be appreciated and, again, please do not pull punches!

1. This is a small pension from many years ago when I worked for an organisation for a very short time.

2. I have received the CETV value which is less than I expected - circa £27k.

3. I had completely forgotten about this pension until fairly recently and, having considered things carefully, I have decided to adopt a 'have a bit of fun/excitement - take a risk' approach.

4. I have started the process to transfer the funds into my chosen SIPP.

Having updated the details now - please can I ask a question...

Question = 3 US tech shares or 1?

I will look forward to any replies - many thanks ;-)

Alan Selwood
Posted: 22 May 2018 22:00:24(UTC)
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James,

Before you jump in feet first, have you considered that you seem prepared to treat £35,000 as a bit of fun money to fling away or set fire to for a laugh (like gambling on the horses or buying a high-powered sports car to drive in a '30' limit) when you could instead invest like a professional to make some proper profits and use some cheaper hobby for your fun?






Or give it to me.............??
2 users thanked Alan Selwood for this post.
James Toedipper on 22/05/2018(UTC), Aminatidi on 23/05/2018(UTC)
James Toedipper
Posted: 22 May 2018 22:13:52(UTC)
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Alan Selwood;62709 wrote:
James,

Before you jump in feet first, have you considered that you seem prepared to treat £35,000 as a bit of fun money to fling away or set fire to for a laugh (like gambling on the horses or buying a high-powered sports car to drive in a '30' limit) when you could instead invest like a professional to make some proper profits and use some cheaper hobby for your fun?






Or give it to me.............??


Thanks for your reply.

As I said it's £27k not £35k but that aside...

1. I will not I am afraid be giving it to you :-( Sorry!

2. Given my position - ie I would like to try to make some good returns in 3ish years, whilst accepting high risk - what would you do?

You seem very knowledgeable so I would value your input around this set scenario.

Thank you.

Balvenie
Posted: 22 May 2018 22:34:04(UTC)
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High Risk - TESLA. If the new model 3 is eventually a success may have high growth. If not probably serious financial risk.

Very Adventurous - 1 of the LM Japanese Funds; BG American; BG Jap. Smaller

Adventurous - LT Global. Wonderful track record, but past performance guarantees nothing

Only my opinion ??
1 user thanked Balvenie for this post.
James Toedipper on 22/05/2018(UTC)
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