S&P500 at record highs - time to stay in or pull out?

[Chicken Chaser]

Thanks for the thoughts on bonds, for info I'm 44, with a frozen DB pension paying at 60 and currently in another final salary pension which is payable at 62 or earlier with penalty. I don't envisage working beyond 60 and would ideally go a bit earlier but Id take a hit on my current pension to do so.
On top of the pensions I'm putting AVCs in also, and then the bit that might get me somewhere there a bit earlier, or helping my young kids out as early adults is where the S&S ISA comes in. I guess the answer is I stick the money I currently have in equities and just ride the storms til closer to the time.

[Phooey]

With 16 yrs to retirement I probably wouldn’t bother with anything other than short duration bonds. Maybe 25% max. Going all in on equity will usually be the best long term performer but stock markets are historically high, and chances are in the next 16 years we will see a major correction that will give you an opportunity of using the bond pot to buy cheap equity.

[davidc1]

I've enjoyed reading this over the months.i like to read others experience and thoughts.

For me , I've 12 years in a db and a dc pension that has 25% in a bond and the rest in the market. (Approx 50 % in us. And the rest in a global fund.)
4 years away from retirement so long as the market doesn't crash .also have no mortgage and another property.
The compound effect is real once the pension gets a bit bigger for sure .
I wish I would have turned my attn to all this 7 or 8 years earlier than i did, as in those years when my dc pension was in the default vehicle rather than invested in the markets .
No one educated us at work on this until a colleague did!I kind of assumed the 2nd place I worked at was a db pension when it was dc...

[Abc321]

okgo said:

Abc321 said:

I am a huge novice here but have tried to do the basics (diversify - diff countries, areas, etc) and ended up 30% up now, after starting in early June of last year. Plan was/is to keep dripping in monthly/quarterly to max ISA allowance each year until retirement age but I'm a little worried there is a bit of a bubble and this jump will drop!

Interested to see other peoples thoughts on this? Again, I am very much an amateur here.

If you re the amateur why do you think you suddenly can predict a bubble?

Nobody knows. All we can infer from decades of market data is that there will be peaks and troughs but so far the general trend has been upwards on a global basis.

Crikey - aren’t you a barrel of laughs

I don’t think I can predict a bubble? I’m just joining a conversation 😂 thank you to the other poster for the tips, great insight. Many moons ago I did buy some individual shares which I was for me quite heavily invested at the time (£1,500 was a hell of a lot to a naive 19 year old!). And lost the lot - so once bitten twice shy and all that

Thanks again for the advice to those who offered it, a very interesting thread

[anonymous-user]

Abc321 said:

okgo said:

Abc321 said:

I am a huge novice here but have tried to do the basics (diversify - diff countries, areas, etc) and ended up 30% up now, after starting in early June of last year. Plan was/is to keep dripping in monthly/quarterly to max ISA allowance each year until retirement age but I'm a little worried there is a bit of a bubble and this jump will drop!

Interested to see other peoples thoughts on this? Again, I am very much an amateur here.

If you re the amateur why do you think you suddenly can predict a bubble?

Nobody knows. All we can infer from decades of market data is that there will be peaks and troughs but so far the general trend has been upwards on a global basis.

Crikey - aren t you a barrel of laughs

I don t think I can predict a bubble? I m just joining a conversation ? thank you to the other poster for the tips, great insight. Many moons ago I did buy some individual shares which I was for me quite heavily invested at the time (£1,500 was a hell of a lot to a naive 19 year old!). And lost the lot - so once bitten twice shy and all that

Thanks again for the advice to those who offered it, a very interesting thread

An all time high statistically more likely to be followed by another all time high than a crash. At some point a crash WILL occur but by selling you’re likely to miss out on more growth in the meantime. You will also probably miss out on some of the best days of gain before you decide to buy back in.

Selling when you have had good gams makes perfect psychological sense however the statistics tell us that itvusally doesn’t work.

Note timing the market, which is what you are describing is subtly but importantly different from rebalancing, the latter involves moving more money into cash or cash like investments as you asset allocation becomes distorted by the repeatedly greater growth in your equities vs your bonds for example.

[birdcage]

"Predicting rain doesn't count; building arks does."

[Blue_star]

Guys come on, you are quoting text books as if you believe there is no bubble atm.

I am reminded of rees-mogg once he got into power and all he did is double speak and condescending remarks.

[okgo]

Blue_star said:

Guys come on, you are quoting text books as if you believe there is no bubble atm.

So sell and know when to get back in, if it’s all so obvious you’ll have no trouble selling high and buying low?

[butchstewie]

Fair bit of truth in that.

Look at a graph of the stock market over time.

Pick a point.

Now look to the right and see where the line inevitably moves.

That's not to say dump it all in the S&P I think my past point about appetite for risk and timescales still stands.

But at any moment in time this thread or its real-world equivalent has existed and it's always been a terrible time to buy stocks.

[Car bon]

Peter Lynch: "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves"

[Blue_star]

okgo said:

Blue_star said:

Guys come on, you are quoting text books as if you believe there is no bubble atm.

So sell and know when to get back in, if it s all so obvious you ll have no trouble selling high and buying low?

Why dont you comment on how we are at all time high when global supply routes are so damaged?

And I did sell

[Blue_star]

butchstewie said:

Fair bit of truth in that.

Look at a graph of the stock market over time.

Pick a point.

Now look to the right and see where the line inevitably moves.

That's not to say dump it all in the S&P I think my past point about appetite for risk and timescales still stands.

But at any moment in time this thread or its real-world equivalent has existed and it's always been a terrible time to buy stocks.

And if you choose 1999 then what?

[Blue_star]

Car bon said:

Peter Lynch: "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in the corrections themselves"

Precisely what my post was referring to. My issue is lots of people dont understand why there is justification at any one point of valuations ( example abs 2006/www companies in 90-ies) and invest on that basis

[butchstewie]

Blue_star said:

And if you choose 1999 then what?

"appetite for risk and timescales still stands".

So around 6-7 years to get even if you were fully in the S&P I believe but then 2008 came along.

Comes down the point about appetite for risk, timescales, and diversification I think.

Genuinely best of luck if you think you can pick when to buy and sell but I don't think I can.

[Car bon]

butchstewie said:

Blue_star said:

And if you choose 1999 then what?

"appetite for risk and timescales still stands".

So around 6-7 years to get even if you were fully in the S&P I believe but then 2008 came along.

Comes down the point about appetite for risk, timescales, and diversification I think.

Genuinely best of luck if you think you can pick when to buy and sell but I don't think I can.

I'm sure it's been posted previously

https://www.morningstar.com/economy/what-weve-lear...

[Blue_star]

butchstewie said:

Blue_star said:

And if you choose 1999 then what?

"appetite for risk and timescales still stands".

So around 6-7 years to get even if you were fully in the S&P I believe but then 2008 came along.

Comes down the point about appetite for risk, timescales, and diversification I think.

Genuinely best of luck if you think you can pick when to buy and sell but I don't think I can.

I cant either but we are at once in generation situation, dont you think?

I apologise to all here - i cannot quote multiple posters in one post

[butchstewie]

Blue_star said:

I cant either but we are at once in generation situation, dont you think?

I apologise to all here - i cannot quote multiple posters in one post

Now?

Honestly no I'm not sure we are.

And if we are it's not been very long since the last once in a generation situation (Covid) is it?

[Panamax]

butchstewie said:

Pick a point. Now look to the right and see where the line inevitably moves.

Although so does inflation.

In rough terms you need to double your money every 20 years just to stand still. This is what makes holding cash so challenging, bonds a pretty limited return and Premium Bonds next to useless. And if any compounding income or gains are taxable the picture is even tougher.

[Car bon]

Blue_star said:

I cant either but we are at once in generation situation, dont you think?

I apologise to all here - i cannot quote multiple posters in one post

We might be, but the bigger question is where we are on that path - how many more AI boom years are there before the (almost) inevitable correction. Or may be an energy crisis recession ? Who knows, but the point is the same, things may climb for several more years, or they may drop tomorrow......

[Blue_star]

Car bon said:

Blue_star said:

I cant either but we are at once in generation situation, dont you think?

I apologise to all here - i cannot quote multiple posters in one post

We might be, but the bigger question is where we are on that path - how many more AI boom years are there before the (almost) inevitable correction. Or may be an energy crisis recession ? Who knows, but the point is the same, things may climb for several more years, or they may drop tomorrow......

Thank you for sharing the link.