"I'm Investing Rather Than Paying off my Mortgage"

Investor views: Private investor Cathy Gosling is hoping her portfolio of shares and higher risk funds will fund her retirement and put her kids through university 

Emma Simon 14 October, 2020 | 11:14AM
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Investor views

Investing in the stock market helped Cathy Gosling get onto the housing ladder at an early age, but it’s pensions rather than property that is currently top of her priority list.

Cathy, now in her early 40s, has been an investor for 20 years. “I started investing after university, aged 21. My father set me up with an Isa and I would put in at least 10% of my pay packet each month,” she says. This disciplined approach meant she could buy her first house aged just 22. It’s a habit that Cathy, a full-time parent, hopes to pass on to her two children.

Cathy has continued to to put money into Isas and pensions over the years and now has a number of investment goals including building a pot to help her son and daughter go to university and help them with a house deposit, as well as saving for her own retirement.

Why I'm Not Paying off my Mortgage

Cathy, who lives in Surrey with her husband and children, also hopes her investment pot will provide a payment vehicle for their interest-only mortgage. While interest rates remain at record low levels, they have chosen to invest rather than paying off the capital on their mortgage.

Elsewhere, Cathy also holds Premium Bonds for her short-term savings goals and has a Junior Isa for each of her children. She says: “We show the kids their investment performance to try and educate them, but my son recently thought he was invested in silver chairs, when in fact it was silver shares!”

Cathy invests in a mix of direct shareholdings and funds, as well as some exposure to gold and silver. “These precious metals seem to be a good bet at the moment, although returns can be volatile,” she says. “I like to go quite high risk as I am still relatively young and hope by the time I am older that those risks will have paid off.”

Like many investors, Cathy has made some changes to her portfolio this year, including selling shares in Boohoo (BOO) and Fevertree (FEVR). The decision to offload her investment in online clothing retailer Boohoo was prompted by allegations of poor staff conditions at some of its suppliers.

When Should I Sell? 

But Cathy admits it’s difficult to know when to take profits from a company that has seen rapid share price growth and fears she may have sold out of premium drinks maker Fevertree too soon. But Cathy is wary of holding on too long as well, which is what happened with her investment in oil and gas explorer Pantheon Resources (PANR), which she has held for around six years.

Shares in this company increased steeply during 2015 and 2016, before falling back again. Cathy says: “It’s been a real rollercoaster and we should have taken profits, but got greedy. It finally looks like it is on the up again though so we will hold on and keep our fingers crossed.”

When it comes to funds, Cathy’s core holdings are in the managed funds run by Chelsea Financial Services, where she holds her Isa and investment account. She likes the diversification and value for money the funds offer and has been very pleased with their performance.

As well as these, she invests in a number of high conviction and sector-based funds, such as Fundsmith Equity, Rathbone Global Opportunities and Polar Capital Biotechnology.

FundSmith Equity has a Morningstar Analyst Rating of Gold, and a five-star rating, reflecting its strong performance against peers in recent years. Rathbone Global Opportunities is another five-star performer, with a Silver Morningstar Analyst Rating, and Polar Capital Biotechnology also has a five-star rating. All three have delivered annualised returns of around 20% over the past five years.

Rathbone Global Opportunities — which has a longer-term track record — has also returned of 15.5% (annualised) for investors over a 10-year time frame. Morningstar analysts rate is as a “option for investors seeking exposure to high-growth, all-cap global equities”. They add: “Our conviction remains strong in [the fund managers] and their ability to add value for investors over the long term.”

Cathy says: “These funds have been brilliant performers. I look at information provided by Chelsea FS for ideas and information about best-performing funds.” Doing so has helped her make decisions about when to sell, as well as when to buy: “Luckily I saw that Chelsea had removed Woodford Equity Income from their buy list about a year before the problems, so I sold and was unaffected by its closure.”


The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk