Is this a bad time to invest a large lump sum in the global market?
I (f49) have only just come across this concept of FIRE, but I guess I'm already there. My problem is that I'm very disorganised. I made a lot of money in a short space of time about 10 years ago, pretty much just stopped working (at 40), and then "forgot" to invest the money and basically after paying off my mortgage and buying a place for BTL, left it all sitting in cash. Current account near-zero interest bearing cash. When I finally got the courage to face it and look in December I found I had nearly £500k sitting in crappy accounts. Yes, I know... I didn't even use my ISA allowances in that time. I have beaten myself up enough about this already. I live very cheaply and it was all "future money" which I didn't need. I'm now trying to pick up the pieces of what I've lost to inflation, plus the fact that the global markets have been on a huge bull run which I'm worried could potentially lead to big losses going in now.
Bit more background. I have an income of around £40k per annum from properties I own mortgage-free. Although probably around £15k of that is not real income because with stagnant house prices I'm just basically building up capital gains tax liability on my primary residence based on pre-2012ish gains (my primary residence is half of that income, I now live in a van). I live on around £25k pa. So I'm still sort of a net saver (if you ignore the deferred tax issue). I have about £450k in pension funds, the vast majority in the FTSE100. With that plus the properties, I am hugely over-exposed to Sterling given that I spend most of my time outside of the country travelling. I have about £130k in ISAs, now all global. I'm consolidating and putting everything together and the idea was to move most of it into global trackers but I'm getting cold feet. Especially since the VWRP etc just went on a rampage in the last couple of weeks while the FTSE100 went the other direction, while I'd taken my eye off the ball for various reasons, it feels like moving right now would be locking in a huge loss. I also know that trying to time the market is a mug's game.
I am very financially literate, used to work in financial services, just have issues taking decisions for myself and then carrying them out. I had decided just to go for it and started drip feeding in Jan, I've invested about £160k so far, £100k in VWRP (about 8% up YTD) and the rest split into European and Chinese trackers (which are on roughly breakeven YTD). Only got around to transferring about 20k into VWRP from existing pension, doh. Then the war threw me off my stride as there's so much volatility right now and I really thought (and still do think) that the market has underpriced the real long term cost. But what do I know, the S&P500 is still rising. Is it a bubble? If so when might it burst?? Who knows! Having let my savings deteriorate for so long in real terms, I feel like they don't have the same buffer they should have to take big falls now. Going to hold some cash back so I have maybe another £250k or so still to invest, plus the rejigging of existing pensions investments. I don't really need huge gains, I just want to make sure at a minimum I start keeping up with inflation to keep my capital intact, although obviously larger gains are desirable. I won't need the money for some times so volatility isn't a huge issue but I keep looking back over my shoulder to how long it took for people to recover their capital after the dot com bubble burst. I feel like I wasn't in the market when I should have been and now want to invest in a time where I might actually be better holding some cash.
Would welcome thoughts from those with a bit more hands-on actual investment experience than me, help me get my thoughts straight to keep taking positive actions!!!!