In my brain I know the risk of me becoming an actual bag lady are almost zero. I have two-year strong emergency fund and a diverse freelance income stream which I'd say is as reliable as anyone could hope for. My expenses are low and I have no debt. My home is paid for and, at almost 50 years old, I'm fit enough to hold my own at most gyms. I have few real money worries to worry about. But I am worried. I feel the dread of messing it all up and becoming destitute. I worry, because I've been there. And it frightens the hell out of me.
With that in mind, I'm hoping to run my investment plans past the people here in the hope that you'll kick them into shape if I'm making any rookie mistakes. I've been doing some research and have come to the conclusion that most of the information about investing is irrelevant to me as I have no intention of becoming an active investor. Here's my understanding of how to best use my money to invest. What do you think?
- - Most managed funds underperform the market, with fees and poor management being the major causes of depletion.
- Those managed funds which do outperform the market are usually achieved through luck, and are unlikely to continue to beat the market thereafter.
- The odds of identifying one of the few well-performing managed funds are unlikely.
- These facts should lead most investors to choose a passive index tracker as their most efficient investing vehicle.
- It makes sense to use an ISA to protect investment income from taxation.
- An index tracker which tracks worldwide markets offers the most diversity and, therefore, the most security.
- Punching a lump sum into an index tracker is more risky than drip-feeding the index tracker, albeit also less rewarding should the market rise sharply.
(I've avoided asking about the C-19 issue as I'd like to hone my general understanding before adding in teh complexities caused by the pandemic.)
Does that sound like a good overview?
Have I missed anything?
Thanks in advance