Discussion
Jawls said:
There’s always something to worry about.
If you’re concerned about ultra short term volatility, come up with a plan to dollar cost average into the relevant fund and then stick to the plan (but be aware that statistically, DCA doesn’t beat lump sum approx two thirds of the time).
This, my mistake in the past has been to only think short term and pull any investment at the first sign of a fall in the market. This means I have historically always lost as I sell for less than I paid and then watch it rebound massively.If you’re concerned about ultra short term volatility, come up with a plan to dollar cost average into the relevant fund and then stick to the plan (but be aware that statistically, DCA doesn’t beat lump sum approx two thirds of the time).
My mum put the annual £20K allowance into a Vanguard ISA recently, 50/50 with the Life strategy 100 and S&P 500. Unfortunately she did this near the top, literally a week before the Dow lost 2000 points.
Not a lot you can do, as you say you have to be in it for the long term as it is impossible to time it in reality.
Joey Deacon said:
This, my mistake in the past has been to only think short term and pull any investment at the first sign of a fall in the market. This means I have historically always lost as I sell for less than I paid and then watch it rebound massively.
My mum put the annual £20K allowance into a Vanguard ISA recently, 50/50 with the Life strategy 100 and S&P 500. Unfortunately she did this near the top, literally a week before the Dow lost 2000 points.
Not a lot you can do, as you say you have to be in it for the long term as it is impossible to time it in reality.
Likewise. A bought a fairly significant chunk of LS40 & LS60 last October. Performed great for a new months but i'm currently over £4k down :-( It's difficult not to want to pull it - but it's a 5 year journey at least for me. My mum put the annual £20K allowance into a Vanguard ISA recently, 50/50 with the Life strategy 100 and S&P 500. Unfortunately she did this near the top, literally a week before the Dow lost 2000 points.
Not a lot you can do, as you say you have to be in it for the long term as it is impossible to time it in reality.
Candellara said:
Jawls said:
(but be aware that statistically, DCA doesn’t beat lump sum approx two thirds of the time).
Never knew thathttps://www.optimizedportfolio.com/wp-content/uplo...
(Note - that’s for a 60/40 portfolio)
Edited by Jawls on Monday 14th February 10:56
Joey Deacon said:
This, my mistake in the past has been to only think short term and pull any investment at the first sign of a fall in the market. This means I have historically always lost as I sell for less than I paid and then watch it rebound massively.
My mum put the annual £20K allowance into a Vanguard ISA recently, 50/50 with the Life strategy 100 and S&P 500. Unfortunately she did this near the top, literally a week before the Dow lost 2000 points.
Not a lot you can do, as you say you have to be in it for the long term as it is impossible to time it in reality.
Out of interest is there a reason to buy a fund with an underweight to the US and to then specifically overweight the US by buying a US only one? My mum put the annual £20K allowance into a Vanguard ISA recently, 50/50 with the Life strategy 100 and S&P 500. Unfortunately she did this near the top, literally a week before the Dow lost 2000 points.
Not a lot you can do, as you say you have to be in it for the long term as it is impossible to time it in reality.
Also with reference to the first point I'd honestly suggesting reading this book;
https://www.amazon.co.uk/Psychology-Money-Timeless...
I saw this the other day and it may help to put your mind at ease: https://www.investopedia.com/solving-the-war-puzzl...
Basically, while a 'war' or bad new event may cause a small/medium or large drop, the markets have always recovered. These things are normally opportunities to buy more stocks/funds at discount prices.
Basically, while a 'war' or bad new event may cause a small/medium or large drop, the markets have always recovered. These things are normally opportunities to buy more stocks/funds at discount prices.
DCA versus Lump sum
Part of the problem is market timing.
OK everyone has heard "you can't time the market" but retail investors have a habit of jumping into the market when it is either high or rising. Quite a lot written about this. Retail investor returns v. Fund returns.
So with the current volatility just choosing the wrong day could cost you tens of thousands in 10 years.
S & P 500, understanding what's in it, it's probably easier to look at the NASDAQ to see what isn't!
I am definitely not increasing the US part of my holdings, I cut them in October, shifting money to European stocks and a smaller amount to Asia.
Suprisingly my Asian funds have not suffered as badly as expected, surprising because of China (real estate & Tech) I have since bought a China ETF that will soften my US loses. (hopefully
)
US spending could get out of control so if you are a Sterling investor you may not see a currency component as in the prior couple of years.
You have to diversify. When markets tank, as they have, some funds will lose less. UK has actually done OK, 7,5xx is not bad.
You don't have to win every race, it's more a case of not being last all the time by continually putting all your money on last years favourite only to see it fall at bechers brook.
US perspective, so my norm is 50% in various US funds, the rest elsewhere
Part of the problem is market timing.
OK everyone has heard "you can't time the market" but retail investors have a habit of jumping into the market when it is either high or rising. Quite a lot written about this. Retail investor returns v. Fund returns.
So with the current volatility just choosing the wrong day could cost you tens of thousands in 10 years.
S & P 500, understanding what's in it, it's probably easier to look at the NASDAQ to see what isn't!
I am definitely not increasing the US part of my holdings, I cut them in October, shifting money to European stocks and a smaller amount to Asia.
Suprisingly my Asian funds have not suffered as badly as expected, surprising because of China (real estate & Tech) I have since bought a China ETF that will soften my US loses. (hopefully
)US spending could get out of control so if you are a Sterling investor you may not see a currency component as in the prior couple of years.
You have to diversify. When markets tank, as they have, some funds will lose less. UK has actually done OK, 7,5xx is not bad.
You don't have to win every race, it's more a case of not being last all the time by continually putting all your money on last years favourite only to see it fall at bechers brook.
US perspective, so my norm is 50% in various US funds, the rest elsewhere
jeff m said:
DCA versus Lump sum
Part of the problem is market timing.
OK everyone has heard "you can't time the market" but retail investors have a habit of jumping into the market when it is either high or rising. Quite a lot written about this. Retail investor returns v. Fund returns.
So with the current volatility just choosing the wrong day could cost you tens of thousands in 10 years.
S & P 500, understanding what's in it, it's probably easier to look at the NASDAQ to see what isn't!
I am definitely not increasing the US part of my holdings, I cut them in October, shifting money to European stocks and a smaller amount to Asia.
Suprisingly my Asian funds have not suffered as badly as expected, surprising because of China (real estate & Tech) I have since bought a China ETF that will soften my US loses. (hopefully)
US spending could get out of control so if you are a Sterling investor you may not see a currency component as in the prior couple of years.
You have to diversify. When markets tank, as they have, some funds will lose less. UK has actually done OK, 7,5xx is not bad.
You don't have to win every race, it's more a case of not being last all the time by continually putting all your money on last years favourite only to see it fall at bechers brook.
US perspective, so my norm is 50% in various US funds, the rest elsewhere
Thanks JeffPart of the problem is market timing.
OK everyone has heard "you can't time the market" but retail investors have a habit of jumping into the market when it is either high or rising. Quite a lot written about this. Retail investor returns v. Fund returns.
So with the current volatility just choosing the wrong day could cost you tens of thousands in 10 years.
S & P 500, understanding what's in it, it's probably easier to look at the NASDAQ to see what isn't!
I am definitely not increasing the US part of my holdings, I cut them in October, shifting money to European stocks and a smaller amount to Asia.
Suprisingly my Asian funds have not suffered as badly as expected, surprising because of China (real estate & Tech) I have since bought a China ETF that will soften my US loses. (hopefully
)US spending could get out of control so if you are a Sterling investor you may not see a currency component as in the prior couple of years.
You have to diversify. When markets tank, as they have, some funds will lose less. UK has actually done OK, 7,5xx is not bad.
You don't have to win every race, it's more a case of not being last all the time by continually putting all your money on last years favourite only to see it fall at bechers brook.
US perspective, so my norm is 50% in various US funds, the rest elsewhere
I guess i'm into the US markets at around 25% (as part of the Life Strategy 60 and 40 Vanguard products)?
Candellara said:
Thanks Jeff
I guess i'm into the US markets at around 25% (as part of the Life Strategy 60 and 40 Vanguard products)?
Depending on your age you could supplement this approach with a contrarian fund, sometimes it's nice to hold something that's already in the toilet that holds it's ground when others drop. Probably not a great time at present, considering the US may xxxx up the Russia Ukraine thing. Something to keep in mind though. All part of a diversified approach.I guess i'm into the US markets at around 25% (as part of the Life Strategy 60 and 40 Vanguard products)?
contango said:
Some of the NY traders are musing over the last time the Rams won the superbowl was in 2000, a few weeks before the dot com crash?
Hold on to your hats!
22 years ago some of those traders would have been hanging out the back of livestock while on summer camp. Are they also predicting that in a few weeks time they're also going to be doing that again because of a football game? Hold on to your hats!
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