Bad time to invest in equities?
Discussion
Yipper said:
The *only* thing that matters is what will happen to the Dow.
The US runs the world and almost all major stock markets (except insular Japan) just follow New York.
We are clearly in the final 25% of a massive bull run that began in 2009. Some stats indicate it is the longest US bull run in history.
Thus, it is a boom. And after a boom always comes a bust...
So, drip feed in the cash. But be mindful that there may well be a big dip in 2019 or 2020 that will provide a fantastic buying opportunity. Perhaps invest 50% today and 50% in a year or two.
You heard it here first folks. If ever there was good reason for piling in with everything, this is it! The US runs the world and almost all major stock markets (except insular Japan) just follow New York.
We are clearly in the final 25% of a massive bull run that began in 2009. Some stats indicate it is the longest US bull run in history.
Thus, it is a boom. And after a boom always comes a bust...
So, drip feed in the cash. But be mindful that there may well be a big dip in 2019 or 2020 that will provide a fantastic buying opportunity. Perhaps invest 50% today and 50% in a year or two.
I suppose that it is worth pointing out that with inflation of 3% and interest rates about 1% you will lose 2% if you do nothing.
In two years time a lot of current unknowns will have become knowns, I would be inclined to drip feed over 24-months, but if there is a big correction, then jump in with both feet.
Your horizon is way into the future, so you may well be invested through several corrections, but will tend to come up smelling OK, in the long term.
I suppose another thing to be wary of is management fees. Paying an IFA just 1% to ”actively manage” your fund may seem attractive. However, over 25-years, it can turn out to be quite a tidy sum and in reality, may turn out to be no better than a diverse fund like those that Vanguard offer.
In two years time a lot of current unknowns will have become knowns, I would be inclined to drip feed over 24-months, but if there is a big correction, then jump in with both feet.
Your horizon is way into the future, so you may well be invested through several corrections, but will tend to come up smelling OK, in the long term.
I suppose another thing to be wary of is management fees. Paying an IFA just 1% to ”actively manage” your fund may seem attractive. However, over 25-years, it can turn out to be quite a tidy sum and in reality, may turn out to be no better than a diverse fund like those that Vanguard offer.
Edited by rdjohn on Wednesday 17th January 10:22
rdjohn said:
I suppose that it is worth pointing out that with inflation of 3% and interest rates about 1% you will lose 2% if you do nothing.
That is a very good point. The money is currently spread between four instant-access cash savings accounts (to keep within the protection limit of each account), and it is therefore shrinking. Also, I will shortly start paying tax on the interest they’re paying, which effectively means it’ll shrink even faster. All of this is incentive to get into the market reasonably quickly.In the medium term I will be cashing out £40k a year and re-investing it into Mrs Oxgreen’s and my ISAs, so hopefully we’ll end up tax-efficient after a few years.
rdjohn said:
Your horizon is way into the future, so you may well be invested through several corrections, but will tend to come up smelling OK, in the long term.
That’s correct. Mrs Oxgreen and I are currently mid-forties, and hoping to retire by 60 (or earlier if things go really well). The majority of the money will be earmarked for retirement, but with a “pot” of spending money for holidays, treats and home improvements that we would look to make last until we’re around 60. I might try and identify a fund for this money that gives solid, unexciting steady growth for the medium term.rdjohn said:
I suppose another thing to be wary of is management fees. Paying an IFA just 1% to ”actively manage” your fund may seem attractive. However, over 25-years, it can turn out to be quite a tidy sum and in reality, may turn out to be no better than a diverse fund like those that Vanguard offer.
Absolutely! We went to see an IFA a week or so ago, and he wanted 0.75% to manage our entire portfolio, which would be several thousand a year. I decided that I feel confident enough to invest the money myself and I don’t imagine that he’d have produced that much more than I can myself. Once we’re fully invested, Fidelity will be charging 0.2%, which is considerably better.So I have now opened an investment account with Fidelity, and I’ve put the first blob of money into it. I chose five index trackers (FTSE, American, European ex-UK, Japan, and Asia ex-Japan). I also chose a managed fund (Fidelity Special Situations, which has historically done well), and also a property-based fund. Of course, the market has fallen a bit in the last few days, so the decision to pound-cost-average my way into the market is looking reasonable. Will see how things go!
Dr Mike Oxgreen said:
Absolutely! We went to see an IFA a week or so ago, and he wanted 0.75% to manage our entire portfolio, which would be several thousand a year. I decided that I feel confident enough to invest the money myself and I don’t imagine that he’d have produced that much more than I can myself. Once we’re fully invested, Fidelity will be charging 0.2%, which is considerably better.
So I have now opened an investment account with Fidelity, and I’ve put the first blob of money into it. I chose five index trackers (FTSE, American, European ex-UK, Japan, and Asia ex-Japan). I also chose a managed fund (Fidelity Special Situations, which has historically done well), and also a property-based fund. Of course, the market has fallen a bit in the last few days, so the decision to pound-cost-average my way into the market is looking reasonable. Will see how things go!
If you're talking about that much money, is there a particular reason you didn't choose a fixed fee broker?So I have now opened an investment account with Fidelity, and I’ve put the first blob of money into it. I chose five index trackers (FTSE, American, European ex-UK, Japan, and Asia ex-Japan). I also chose a managed fund (Fidelity Special Situations, which has historically done well), and also a property-based fund. Of course, the market has fallen a bit in the last few days, so the decision to pound-cost-average my way into the market is looking reasonable. Will see how things go!
xeny said:
If you're talking about that much money, is there a particular reason you didn't choose a fixed fee broker?
Erm... only because I’m not really familiar with that option. But ultimately I think I have re-learnt what I’ve always known: you can invest quite successfully yourself without knowing much about it and without taking paid-for advice or paying someone to manage your investments for you.The one thing I will be paying that IFA to do is to work out whether I should take cash-equivalent transfers from two deferred final-salary pensions, because I’m not confident that I know how to judge whether the transfer values they offer are good enough. Unless someone can direct me to a friendly web site that could teach me the basics of that, in which case I might not even need to pay for that!
Edited by Dr Mike Oxgreen on Friday 19th January 11:42
Just thought I’d come back to this thread.
Well, well! What a ride it’s been since I posted! Little did I know that I was starting this thread right at the beginning of a fairly big correction. Let’s hope it is just a correction and not the start of a sustained bear market - most experts are saying so. Underlying economic indicators are good-ish.
I started investing pretty much immediately, and have been pound cost averaging by putting in a chunk of money about once a week, and intend to continue.
And the strategy appears to be working. Since I started:
FTSE: Down 7.8%
Dow: Down 7.5%
Nikkei: Down 9.8%
Me: Down 5.0%
Not too bad. Just goes to show that pound cost averaging really does insulate you from some of the losses in a falling market. Of course, if the market had risen then I’d have missed out on some of the gains, but I’m comfortable with that.
Having said that, I did write...
Well, well! What a ride it’s been since I posted! Little did I know that I was starting this thread right at the beginning of a fairly big correction. Let’s hope it is just a correction and not the start of a sustained bear market - most experts are saying so. Underlying economic indicators are good-ish.
I started investing pretty much immediately, and have been pound cost averaging by putting in a chunk of money about once a week, and intend to continue.
And the strategy appears to be working. Since I started:
FTSE: Down 7.8%
Dow: Down 7.5%
Nikkei: Down 9.8%
Me: Down 5.0%
Not too bad. Just goes to show that pound cost averaging really does insulate you from some of the losses in a falling market. Of course, if the market had risen then I’d have missed out on some of the gains, but I’m comfortable with that.
Having said that, I did write...
Dr Mike Oxgreen said:
it would be a pity to put a load of money in only to see it drop 5% straight away.
Edited by Dr Mike Oxgreen on Friday 9th February 09:59
Ari said:
Yipper said:
The *only* thing that matters is what will happen to the Dow.
The US runs the world and almost all major stock markets (except insular Japan) just follow New York.
We are clearly in the final 25% of a massive bull run that began in 2009. Some stats indicate it is the longest US bull run in history.
Thus, it is a boom. And after a boom always comes a bust...
So, drip feed in the cash. But be mindful that there may well be a big dip in 2019 or 2020 that will provide a fantastic buying opportunity. Perhaps invest 50% today and 50% in a year or two.
You heard it here first folks. If ever there was good reason for piling in with everything, this is it! The US runs the world and almost all major stock markets (except insular Japan) just follow New York.
We are clearly in the final 25% of a massive bull run that began in 2009. Some stats indicate it is the longest US bull run in history.
Thus, it is a boom. And after a boom always comes a bust...
So, drip feed in the cash. But be mindful that there may well be a big dip in 2019 or 2020 that will provide a fantastic buying opportunity. Perhaps invest 50% today and 50% in a year or two.
The Dow corrects... Rest of world corrects...
Good opp to buy a little on the dip.
Finally got my ISA opened this week.
It's with Fidelity.
Does anyone know the delay/timing between buying and when they actually purchase?
Right now there is £0 in it so my assumption is that if I add money at any time over the weekend and buy a fund(s) nothing will happen until Monday but I'm not sure when on Monday and what time the pricing is based on?
i.e. if I buy on Monday PM am I actually buying based on Friday's (possibly beneficial) pricing because of timing?
It's with Fidelity.
Does anyone know the delay/timing between buying and when they actually purchase?
Right now there is £0 in it so my assumption is that if I add money at any time over the weekend and buy a fund(s) nothing will happen until Monday but I'm not sure when on Monday and what time the pricing is based on?
i.e. if I buy on Monday PM am I actually buying based on Friday's (possibly beneficial) pricing because of timing?
hstewie said:
Yipper said:
Ari said:
Yipper said:
The *only* thing that matters is what will happen to the Dow.
The US runs the world and almost all major stock markets (except insular Japan) just follow New York.
We are clearly in the final 25% of a massive bull run that began in 2009. Some stats indicate it is the longest US bull run in history.
Thus, it is a boom. And after a boom always comes a bust...
So, drip feed in the cash. But be mindful that there may well be a big dip in 2019 or 2020 that will provide a fantastic buying opportunity. Perhaps invest 50% today and 50% in a year or two.
You heard it here first folks. If ever there was good reason for piling in with everything, this is it! The US runs the world and almost all major stock markets (except insular Japan) just follow New York.
We are clearly in the final 25% of a massive bull run that began in 2009. Some stats indicate it is the longest US bull run in history.
Thus, it is a boom. And after a boom always comes a bust...
So, drip feed in the cash. But be mindful that there may well be a big dip in 2019 or 2020 that will provide a fantastic buying opportunity. Perhaps invest 50% today and 50% in a year or two.
The Dow corrects... Rest of world corrects...
Good opp to buy a little on the dip.
In fact with hindsight, your 15 Jan 18 advice to the OP to "invest 50% today" was terrible. Thank goodness you were ignored.
One more thing, investing "50% today and 50% in a year or two" is hardly "drip feeding".
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