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Sue Bennett
School Teacher
Asked a question 4 months ago

Quick question.. I'm going to begin putting money into my life strategy 60. What sort of ratio between cash and stocks and shares isa is recommended?

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Hi Sue,

There isn't really a one size fits all answer to this as it very much depends on your tolerance for risk, investing horizon and goals.

For someone young, I would always suggest going higher on stocks and shares. This way, you can expect to receive higher average returns over time (with fluctuations along the way) and unlike cash the money is protected against inflation. 

If however, you're close to retirement, investing in to stocks and shares for a major part of your portfolio may not be a good idea. Example: lets say you retire in 3 years and have your whole portfolio in stocks and shares - if on that year the market takes a big dip (as it does here and there) - your retirement plans may be in jeopardy.

The great thing about LS60 is that this fund is 60% stocks and shares (higher risk) and 40% bonds (lower risk) so it already protected to some extent against the fluctuations of the stock market. 

The only other thing to consider are your personal goals - if you plan to say buy a house in 3 years which will need cash, it may be a good idea to leave more money in cash or you may have the same issue with stocks and shares as described above. 

Just to note - I'm not a qualified financial advisor and am just sharing my understanding/experience. 

Hope this helps & feel free to reply here if anything I said wasn't clear!