Choose Your Fund and Forget About it

Once you’ve chosen a fund, you can always switch funds in a month’s or a year’s time, so don’t obsess about the specific fund and whether it’s ‘right’ or not. There is no such thing as the ‘right’ fund, just lots of imperfect vehicles, so again, pick one and crack on.

I bang on so much about passive, multi-asset funds because they are all that most people need. If, as your interest in this stuff develops, you want to get more involved and build your own portfolio, then that’s fine.

But if you spend a year trying to craft the best portfolio before investing a dime, then you’ve missed out on a year’s worth of returns and actual experience. Better to get the money to work as soon as possible and tweak later. I did a whole episode on how to choose a multi-asset fund, and you can find that here.

Passive multi-asset funds – spread your money around well and keep the costs pretty low. You can definitely save money by going for some pure tracker funds, effectively building your own multi-asset portfolio, but you can always get to that later, as your interest and knowledge develops. If you’re starting out, an off-the-shelf, passive multi-investment fund will do the job for you.

Set and Forget (for a Year)

Once it’s done, and you have your accounts open, your funds chosen and more going in, LEAVE IT! You may have a three-month initial review once things are up and running, but remember you’re not likely to make any changes at that point, or certainly not anything major. You might dial your savings rate up or down (preferably up) now that you’re into the groove.

Probably it’s better to have an annual review, and forget about it all between the point of you setting it up and that one-year anniversary. Maybe check in after a couple of months to make sure the money is being invested, not just sitting in cash, which can happen if you haven’t set it to invest in funds properly.

Make sure it’s set up right, and then forget about it for a year. If you must check in, only do it quarterly. And only check in, don’t meddle. Use the time wisely in this first year. Keep learning, watching for market movements and listen to the financial news. Watch for market declines, because they are potentially opportunities to invest more money.

The actual things you need to DO as a New Accumulator are dead simple. There really is no need to overcomplicate. Doing so only leads to stress, inertia and more stress. Pick your platform, accounts and funds, and get on with it.

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