Good time to invest in stocks now?

[Skeptisk]

Disclaimer: when I’ve invested in shares in the past it has never worked out well for me.

We recently liquidated some investments so I’m sitting a quite a large pile of cash. Looking at the US and European markets they seem to be at an all time high. I’ve also read that a lot of the tech stocks are potentially over valued and that some see a crash coming. There also seems to be a lot of economic and political uncertainty: Trump, Ukraine, Middle East, trade wars, etc.

If you were investing a large sum today what would you be buying?

I know that longer term stock markets usually work out better…but interest rate on short term bonds are reasonable at the moment (above inflation) and that kicking the investment decision down the road for 12 to 18 months might be the safest option.

For background I am only a few years from retirement and I suppose more concerned on maintaining capital (as I could live off what we have saved).

[muscatdxb]

Because markets always tend to go up because of inflation and growth, they spend a lot of time at all time highs.

Also, there are always some dark clouds on the horizon and things to worry about and reasons not to invest.

With regards to retirement, many of us could have 30 year retirements now which means that some equity exposure might be sensible for much longer.

It depends on a lot of things but to throw a starter out there, maybe a 60/40 equity bond fund is what I’d be thinking. Maybe some cash on deposit at 4%+ to ride out any market dips.

[trickywoo]

At any given point the best time to invest in shares was 10 years ago.

If you don’t start you’ll never get to that point.

[Simpo Two]

trickywoo said:

At any given point the best time to invest in shares was 10 years ago.

If you don’t start you’ll never get to that point.

That's very true. Mind you there were two obvious times to pile in recently - when Covid and then Ukraine had knocked 20% off the markets.

[98elise]

Simpo Two said:

trickywoo said:

At any given point the best time to invest in shares was 10 years ago.

If you don’t start you’ll never get to that point.

That's very true. Mind you there were two obvious times to pile in recently - when Covid and then Ukraine had knocked 20% off the markets.

Agreed.

I was lucky enough to have liquidated a lot of my funds when Covid hit the UK. I even asked on here if it was a good idea to stay out and at least one person said the impact of Covid was already baked in.....it really wasn't and the markets tumbled!

I got back in when the recovery was under way so didn't make a bundle, but it meant I got my losses back much sooner.

[Roger Irrelevant]

muscatdxb said:

Because markets always tend to go up because of inflation and growth, they spend a lot of time at all time highs.

Also, there are always some dark clouds on the horizon and things to worry about and reasons not to invest.

Well said. The stock market is the default investment it is because it has always risen over the long term. That means that it is not at all unusual for it to be at or near all-time highs - if it's doing what it's supposed to be doing then it will be. So it always strikes me as a bit mad when people say 'ooh the market is at an all-time high, I better not invest/better take my money out'.

And as for the second point there's that '50 years of reasons to not invest' thing out there - basically a list going back to the 70s of what seem like good reasons to hold off investing in the stock market every year from then until the present day. Yet if you did invest back in the 70s you'd have made absolutely enormous returns.

[98elise]

Roger Irrelevant said:

muscatdxb said:

Because markets always tend to go up because of inflation and growth, they spend a lot of time at all time highs.

Also, there are always some dark clouds on the horizon and things to worry about and reasons not to invest.

Well said. The stock market is the default investment it is because it has always risen over the long term. That means that it is not at all unusual for it to be at or near all-time highs - if it's doing what it's supposed to be doing then it will be. So it always strikes me as a bit mad when people say 'ooh the market is at an all-time high, I better not invest/better take my money out'.

And as for the second point there's that '50 years of reasons to not invest' thing out there - basically a list going back to the 70s of what seem like good reasons to hold off investing in the stock market every year from then until the present day. Yet if you did invest back in the 70s you'd have made absolutely enormous returns.

The S&P 500 has averaged 10% per year during its history, and that's included 2 world wars, the great depression, covid, the GFC and many other major events.

[Roger Irrelevant]

98elise said:

Roger Irrelevant said:

muscatdxb said:

Because markets always tend to go up because of inflation and growth, they spend a lot of time at all time highs.

Also, there are always some dark clouds on the horizon and things to worry about and reasons not to invest.

Well said. The stock market is the default investment it is because it has always risen over the long term. That means that it is not at all unusual for it to be at or near all-time highs - if it's doing what it's supposed to be doing then it will be. So it always strikes me as a bit mad when people say 'ooh the market is at an all-time high, I better not invest/better take my money out'.

And as for the second point there's that '50 years of reasons to not invest' thing out there - basically a list going back to the 70s of what seem like good reasons to hold off investing in the stock market every year from then until the present day. Yet if you did invest back in the 70s you'd have made absolutely enormous returns.

The S&P 500 has averaged 10% per year during its history, and that's included 2 world wars, the great depression, covid, the GFC and many other major events.

True, but I now realise that I am quilty of not properly reading the OP right to the end. I stopped at 'If you were investing a big sum today what would you buy?', and the answer to that is some sort of global equity tracker. However the OP then went on to say that a key concern is maintaining capital, which means that the OP is actually in a very different place to me. So I'm going to perform a volte face and say in the OP's position I'd probably just stick it in a guaranteed savings bond or just a savings account given that you can get inflation-beating rates, especially if you're happy to not have access for a given period.

[chip*]

The OP post is all over the shop.
One sentence seeks recommendations on equity investment, and another sentence saying he can live off the current capital. Imo, he doesn't have a clue what he wants to achieve.

[Simpo Two]

chip* said:

The OP post is all over the shop.
One sentence seeks recommendations on equity investment, and another sentence saying he can live off the current capital. Imo, he doesn't have a clue what he wants to achieve.

People who live off capital can also invest... IMHO it would be foolish not to. But the OP says 'more concerned on maintaining capital'. If he doesn't want to risk losing £1, then he shouldn't invest. If however he can accept short term losses then that's a different matter.

[C69]

chip* said:

The OP post is all over the shop.
One sentence seeks recommendations on equity investment, and another sentence saying he can live off the current capital. Imo, he doesn't have a clue what he wants to achieve.

The way I read the OP's final sentence was that he didn't want to see any erosion of capital value between now and his retirement date, because he wanted to live off that capital after retiring.

As he's "only a few years from retirement" investing all of his available capital in equities doesn't seem like a great idea (especially all at once).

[fridaypassion]

I've recently got more interested in investing having spent all my money building a business for years we're now in a position to really step up the saving and investing. Just at the end of a bull run!

I have put 40k so far into a mix of cash stocks ISA/normal investment portfolio and crypto and all of them have gone down. Typical. However it's a long term trying and they always come back higher so we're keeping going. They are called holdings as you're supposed to hold them I guess!

I've no interest in day trading or anything like that just looking for something that does better than bank interest. With a bigger amount invested obviously the upsides when they come will be very good and you can reinvest dividends for "free" extra investment.

[Origin Unknown]

fridaypassion said:

I've recently got more interested in investing having spent all my money building a business for years we're now in a position to really step up the saving and investing. Just at the end of a bull run!

I have put 40k so far into a mix of cash stocks ISA/normal investment portfolio and crypto and all of them have gone down. Typical. However it's a long term trying and they always come back higher so we're keeping going. They are called holdings as you're supposed to hold them I guess!

I've no interest in day trading or anything like that just looking for something that does better than bank interest. With a bigger amount invested obviously the upsides when they come will be very good and you can reinvest dividends for "free" extra investment.

I've just put 20k into a S&S ISA and 80k into HL Balanced Managed Fund 2 weeks ago. I am currently 1k down so that's not a good start.

Need to remind myself this is a 5 year plan and there is plenty of time to recover and grow.

[C69]

Origin Unknown said:

I've just put 20k into a S&S ISA and 80k into HL Balanced Managed Fund 2 weeks ago. I am currently 1k down so that's not a good start.

Need to remind myself this is a 5 year plan and there is plenty of time to recover and grow.

I realise that it's a bit late for you, but dollar-cost averaging would've been a useful technique to avoid any poorly-timed lump sum investments.

[fridaypassion]

Origin Unknown said:

I've just put 20k into a S&S ISA and 80k into HL Balanced Managed Fund 2 weeks ago. I am currently 1k down so that's not a good start.

Need to remind myself this is a 5 year plan and there is plenty of time to recover and grow.

Yeah it is what it is they will come back

[Origin Unknown]

C69 said:

Origin Unknown said:

I've just put 20k into a S&S ISA and 80k into HL Balanced Managed Fund 2 weeks ago. I am currently 1k down so that's not a good start.

Need to remind myself this is a 5 year plan and there is plenty of time to recover and grow.

I realise that it's a bit late for you, but dollar-cost averaging would've been a useful technique to avoid any poorly-timed lump sum investments.

Thanks, it is helpful as it gives me a tool to use in the future.

[simon800]

Origin Unknown said:

HL Balanced Managed Fund

Good luck with that

[Derek Chevalier]

98elise said:

Simpo Two said:

trickywoo said:

At any given point the best time to invest in shares was 10 years ago.

If you don’t start you’ll never get to that point.

That's very true. Mind you there were two obvious times to pile in recently - when Covid and then Ukraine had knocked 20% off the markets.

Agreed.

I was lucky enough to have liquidated a lot of my funds when Covid hit the UK. I even asked on here if it was a good idea to stay out and at least one person said the impact of Covid was already baked in.....it really wasn't and the markets tumbled!

I got back in when the recovery was under way so didn't make a bundle, but it meant I got my losses back much sooner.

Given that even the brightest brains in the market have no idea what the market will do in short-term, I'm not convinced it was obvious, other than in hindsight.

[Origin Unknown]

simon800 said:

Origin Unknown said:

HL Balanced Managed Fund

Good luck with that

What do you mean Simon?

[keo]

C69 said:

Origin Unknown said:

I've just put 20k into a S&S ISA and 80k into HL Balanced Managed Fund 2 weeks ago. I am currently 1k down so that's not a good start.

Need to remind myself this is a 5 year plan and there is plenty of time to recover and grow.

I realise that it's a bit late for you, but dollar-cost averaging would've been a useful technique to avoid any poorly-timed lump sum investments.

I read an article by vangaurd recently I can’t remember the exact figure but they said something like 65/70% of the time lump sum investing brings better returns than cost averaging.

Cost averaging is easier to do as you buy both the lies and highs. I have just chucked a lump into stocks and shares and thinking about doing another. Safer bet would be spread it over months. But I don’t want the money for a long time so I just ignore the noise.