Put all the money in a global index fund - choose the distributing version of this and live off the dividends.
There is plenty of room for more sophistication than this - read Tim Hale's Smarter Investing - but IMO this is a good start for someone in your position.
Keep 6 or 12 months' expenses as cash on hand, and then check the dividends every few months.
It doesn't matter if the price of your stocks go up or down, because they represent ownership of factories and supermarkets (and hotels, logistics networks, intellectual property etc) which make and sell useful things.
What matters is their earnings, some of which they reinvest in the business (which is why it's ok to sell stock of a company that has grown), and some of which they pay to investors as dividends.
Go here: https://www.reddit.com/r/ukpersonalfinance/wiki/recommendedreading and look at things about asset allocation.
Make this your first book: http://www.amazon.co.uk/Smarter-Investing-Simpler-Decisions-Financial/dp/0273785370/ref=sr_1_1?s=books&ie=UTF8&qid=1394958561
IMO we should be trying to drive passive investing questions away from this sub, because active and passive investing are so anathemic. I've been meaning to have a discussion with the mods about this.
The vast majority of active investors do not beat the market, when accounting for fees and costs. [1, 2, 3]
A very few active managers succeed in beating the market over very long periods - the primary problem is identifying them in advance.
Tim Hale's Smarter Investing dedicates some pages to this - several years of good returns is indistinguishable from good luck. It concludes, if I recall, that nearly 20 years of data is needed before it becomes probable that outsized returns are the result of skill rather than luck, by which time the manager is likely at the end of his career or wider market conditions may've changed. Neil Woodford is just one salutary lesson here.
On the other hand, the efficient markets hypothesis, which /r/UKpersonalFinance uses to argue that there's no way you can possibly out-know the market, is clearly "twaddle". There are occasions when the market is blatantly and obviously irrational - I can state this with a very great deal of confidence, but I'm not sure what I can prove to you.
If you want to invest actively then no-one can tell you you're right - the odds are that you're not. But, as Ben Graham would say, you're not right or wrong because 1000 people agree or disagree with you - you're right because your facts and reasoning are right.
To be an active investor requires a temperamental quality, not an intellectual quality. Or, at least, a temperamental quality which is rarer than the intellect required.
Index investing is demonstrably and provably the best strategy for the vast majority of investors. Socking money into index funds and never touching it will give them the highest returns.
So if you think you can beat the market, you had better have some very convincing reasons for yourself.
IMO you should read all the passive investing books you can - Smarter Investing is very good - and understand the evidence that says it's the best. Diversification is a protection against ignorance and is the best strategy for the majority of people - Buffett is far less dismissive about market-average returns these days, and advocates index funds. I don't need to link that, because that's not controversial.
But IMO Lindsell-Train's recent performance is not a convincing argument for active management. Why do you cite their "Global Equity" fund, and not their "Investment Trust" or "Finsbury Growth" fund? I looked briefly at Lindsell-Train and didn't really understand them - I couldn't see the need for 3 different funds. If I recollect they had some of the same holdings in multiple of their funds - that looks to me a lot like marketing, so that they can sell one fund to investors who like "sustained income" and sell the other to investors who are sold on "global growth", and they can boast about the performance figures of whichever one does the best. (Woodford certainly does this.)
I personally think that a large contributor to active fund underperformance is constraints upon their managers. "Contrast that: if I'm running a mutual fund," Paul Lountzis says, "try getting away with my style of investing." Watch the whole video. IMO big corporates tend towards index-hugging because managers fear getting it wrong - they're not really managers, they're employees who have managers. They are answerable to consumer investors, who are inherently mostly bad investors - the capricious punters pull their money out if the fund underperforms, starving it of capital, and money pours in should it outperform. I've seen JP Morgan funds that have hugged the index for a decade; Moggy's Somerset Capital is like this, too.
From this point of view, Lindsell-Train are probably not as constrained as a JP Morgan fund manager - I guess they're owner-run and can afford to keep the lights on and pay the staff through a few years of bad performance and declining assets-under-management - but they're not for me. I have quite a bit of money with a different fund manager whose views do align with mine - when I listen to him speak I most always find myself agreeing with him, because he just talks sense.
The question is whether she might need it for a house, or whether to put it into longterm investments.
The stockmarket is the best longterm investment for most people, so long as you weather the down periods - needing the money for a house can mean that you need to take it out when the market's down.
Heed Lars Kroijer and read his book or Tim Hale's Smarter Investing.
In before: Vanguard Lifesaver 100
For your house purchase though I would be slightly more skeptical where you put your money. 20 years anything could happen, but the chances of losing money in a S&S ISA over 10 years is reasonably high so I wouldn't be putting a house deposit there unless I had liquid cash somewhere else, perhaps a traditional ISA
If you want to learn a bit more about markets and investment strategy, this book is very good, easy enough to read and gives good UK specific advice https://www.amazon.co.uk/Smarter-Investing-Simpler-Decisions-Financial/dp/0273785370/ref=sr_1_1?s=books&ie=UTF8&qid=1394958561
> We were planning on investing in two index funds, one tracking ftse 250 and another s&p500
These are a very odd choice - no exposure to Europe, developed Pacific or emerging markets.
I'd buy the book linked below. It is basically the bible of this subreddit.
Before I go on I want to note I am in no sense suggesting this is a sensible portfolio, it was one I was content with. I have a medium term fund I'm using a Vanguard ISA for. It is currently split into a more defensive 50/50 portfolio (50% equities, 50% bonds) as I want it to stand up somewhat better in a stock market crash (bonds have historically tended to go up in a crash though this is not guaranteed). You could probably justify being even more bond heavy than this on a ~5 year horizon but I'm not going to put more than 50% in while bond real returns in normal times are so poor.
Personally I only have 3 funds in there. 50% is in Vanguard's global short term bond fund, most of the rest is in Vanguard FTSE Global All Cap fund. A chunk I've put into their Value Factor ETF as I wanted to experiment with exactly how these risk factor funds actually work in practice, this fund is the safest place for me to run a minor experiment.
Personally I'm opposed to a tilt towards the UK in my fund. All three of these are global market funds. If Britain becomes the next Japan then I don't want excessive exposure to it. Of course if Britain booms I also won't get an excessive gain from that. The key is to diversify your risks.
Removed for low-effort.
Many previous threads in this subreddit already: https://www.reddit.com/r/UKPersonalFinance/search?q=nipper&restrict_sr=on&sort=relevance&t=all
Oh, no that doesn't work does it?
Try this: https://www.reddit.com/r/UKPersonalFinance/search?q=child&restrict_sr=on&sort=relevance&t=all
Heed Lars Kroijer .
You could probably transfer your existing holdings to another UK broker, but realistically "investments that are what's recommended by the group of IFAs he's part of" will probably have expensive costs or management fees and you'll probably want to sell them and buy index funds instead.
Important: are any of your holdings in an ISA? Because you only have a £20,000 per year ISA allowance, it's important not to remove assets from an ISA until you know what you're doing. You should be able to sell and rebuy within the ISA, and/or transfer you ISA holdings or balance to a new ISA provider.
Heed Lars Kroijer .
If you were thinking of investing in one thing yesterday, watched a video today and are now in two minds, the answer is not to add more noise by asking for more opinions, but to read more and ponder.
You should not rush into investments - the horizon for equity investments like these is probably more than 10 years.
When I first started coming to this sub I didn't post any new submissions for years - I just read every thread every day, looking at the comments and asking "why do you say that, please?" when I didn't understand something.
If you're confused enough about the Lifestrategy to consider buying both the 80 and 100 versions of it, then you probably don't understand what it is well enough.
Tim Hale's Smarter Investing is what made sense of everything for me.
Read Tim Hale's Smarter Investing , figure out a withdrawal rate for your retirement, how much capital you need to achieve and then how much to budget for it.
Earning 6-figures and having "up to 100k" in savings suggests you might need to crack down a bit.
Arguably you should now start saving 20% of your wage towards retirement, for the rest of your working life.
Have you seen our flowchart?
As /u/bonjourlewis says, there's little point going for anything other than a global tracker because then you're trying to beat the market - and nine out of ten times you will fail to do so. I think that beating 0.2% in fees is a little optimistic, perhaps, though unless you're prepared to put in the legwork of building your own global tracker out of a basket of funds (which requires manual rebalancing every so often).
My personal choice is the Vanguard FTSE Global All-Cap Index fund, which aims to track the whole market. Many others prefer Vanguard's Lifestrategy funds, which have a bit of a bias towards the UK. You should do your own research though, and read Smarter Investing by Tim Hale .
Here's a comparison of cheap brokers. Charles Stanley Direct seem reasonably cheap, but Vanguard is cheaper if you don't mind being restricted to their funds.
this the guy?
Coasting or not, everyone wants to earn the highest risk-adjusted returns possible.
The only people who don't are those who want to invest ethically or in compliance with sharia law.
If you're going to need the money soon then you probably wish to take less risk, in which case you must accept lower returns.
Historically this has been the case for people close to retirement, but with longer retirements these days you have longer to ride out stockmarket volatility.
You will probably want to take less risk if you need the money for a deposit on a house.
Read Tim Hale's Smarter Investing .
I'm not really sure what you're advocating - if you say "stocks historically give a return of 8%-10% over time" then I have to ask where you're getting that, if not a stockmarket index?
A Vanguard stockmarket index tracker will achieve the same returns as the index, near as damnit.
Otherwise you seem to be saying that you can beat the market - you should understand that the majority of professionals don't succeed at that. [1, 2, 3]
You might find /r/UKPersonalFinance better for this kind of discussion.
If Buffett's style of active investing appeals to you then IMO you should read Tim Hale's Smarter Investing first and then Benjamin Graham's The Intelligent Investor.
Benjamin Graham was Buffett's mentor, and I think they worked together for some years. Buffett describes The Intelligent Investor as the best book on investing ever written and very reassuring bedtime reading - I recommend a recent edition with Jason Zweig's commentary.