Vanguard, keep investing or...?

[superpp]

Hi,

We have around £4K spare cash each month, that the Mrs & I have been putting into LS80 and a Global Tracker.

Since the start of the year, this has just been 'vanishing' each month as the funds are going down.
What's the consensus, keep putting money in or just sit on it and watch inflation erode it?

[85Carrera]

When are you likely to want/need to access the money?

[superpp]

I don't really need any access, no big plans.

Aiming to retire in around 5 yrs.
Have 2 BTLs but don't really want another.

guess it's a nice problem, but a problem no less.

[Bazil Bush]

Pretty similar to us but not quite that amount per month.

We’re continuing to drip money in every month.
It’s disconcerting to watch it keep dropping but as I’ve been investing for a number of decades I’ve historically always ended up ahead .

Usual caveats apply, can go down as well as up, need relatively long horizon, might not get back what you put in, etc……….

[xeny]

superpp said:

I don't really need any access, no big plans.

Aiming to retire in around 5 yrs.
Have 2 BTLs but don't really want another.

guess it's a nice problem, but a problem no less.

Is it at least in a pension wrapper so the tax rebate takes some of the sting away? I'm still investing as I'm at least getting a discount compared to the units I bought last autumn.

Psychology is a funny thing - it's less appealing to buy equities when they're on sale.

[dmahon]

Though it feels like the money is disappearing, you are actually buying more units each month. When it eventually recovers, all of the units you are buying cheaply will be well in profit

If you have a long time horizon, you are actually better off buying when prices are lower.

It’s a bit uncomfortable but I’ve been through it a few times now and just keep buying.

[AllyM]

superpp said:

Hi,

We have around £4K spare cash each month, that the Mrs & I have been putting into LS80 and a Global Tracker.

Since the start of the year, this has just been 'vanishing' each month as the funds are going down.
What's the consensus, keep putting money in or just sit on it and watch inflation erode it?

Are you happier buying at higher prices than lower?

[rossub]

Call me a cynic, but over recent months there’s always been a rally in the week before the monthly direct debit and I miss out on the lows of mid month!

Currently -12.5% on my drip feed that started a year ago.

[Jawls]

rossub said:

Call me a cynic, but over recent months there’s always been a rally in the week before the monthly direct debit and I miss out on the lows of mid month!

Currently -12.5% on my drip feed that started a year ago.

It’d be interesting to see if day of the month makes a material difference to returns. Wouldn’t necessarily be hard to check in excel either so long as you had daily data for eg. The S&P.

[superpp]

Answers so far match my thoughts, keep buying the shares which are getting cheaper. So in the long run you'll have more invested units.
Just unsettling when you look the next month and your recent investment has 'disappeared'.

Can't see anywhere else to put cash at the moment.

[superpp]

xeny said:

Is it at least in a pension wrapper so the tax rebate takes some of the sting away?

Not sure what you mean, we invest through Stocks & Share ISA allowance.
My pension is a DB one.

[anonymous-user]

rossub said:

Call me a cynic, but over recent months there’s always been a rally in the week before the monthly direct debit and I miss out on the lows of mid month!

Currently -12.5% on my drip feed that started a year ago.

Similar time frame to me, I stopped putting money in 5 months ago. Currently worth 6.1% less than I have paid in. I personally think the stock market is going to tank big style, hence not wanting to add any more money.

It was nearly worth what I paid in a week or so ago, my gut said to pull it out then, wish I had.

[PM3]

superpp said:

Answers so far match my thoughts, keep buying the shares which are getting cheaper. So in the long run you'll have more invested units.
Just unsettling when you look the next month and your recent investment has 'disappeared'.

Can't see anywhere else to put cash at the moment.

I've been doing much the same ( not as regular as same tie every month ) since the start of the fall 4Jan22 , added what amounts to 5K a month which has all "disappeared" Half my Losses this year so far are in June alone, so I am holding back this month investing and keeping the next 10K or so in anticipation that the market if still falling like a stone. I'll just time reentry by luck , after all my prudence thus far has it performed .

People preach about keeping in cash is just watching it erode ....etc . really, how about watching the number on the fund errode and knowing that the "value" of that number is also eroded be inflation , no ?

For perspective, I am largely in global trackers and slightly UK weighted global fund . Im am early retired but have no vision of taking any of the money out in the next 5 or so years , all of which is for discretionary spending anyway.

[mike74]

So the consensus seems to be this is just a (6 month and counting) blip which will soon be forgotten and everyone should remain invested and keep piling in... and no concerns that we've have had 10 years of a QE fuelled, overvalued bull market and that what we've seen for the last 6 months isn't the start of a potentially very protracted down turn/bear market?

[46and2]

Last time I looked, last friday I think, my LS100 was approx -7.5%, I've been buying since last november.

How much is inflation eroding my cash? I don't know but my guess is it by more.

[emicen]

Jawls said:

rossub said:

Call me a cynic, but over recent months there’s always been a rally in the week before the monthly direct debit and I miss out on the lows of mid month!

Currently -12.5% on my drip feed that started a year ago.

It’d be interesting to see if day of the month makes a material difference to returns. Wouldn’t necessarily be hard to check in excel either so long as you had daily data for eg. The S&P.

There’s a number of research pieces been done on this, Google brings up plenty of them.

One that sticks in my mind is the markets tend to be higher on Wednesday than Thursday, which always makes it a delight my monthly investments are done on Wednesdays.

[Jon39]

Jawls said:

rossub said:

Call me a cynic, but over recent months there’s always been a rally in the week before the monthly direct debit and I miss out on the lows of mid month!

Currently -12.5% on my drip feed that started a year ago.

It’d be interesting to see if day of the month makes a material difference to returns. Wouldn’t necessarily be hard to check in excel either so long as you had daily data for eg. The S&P.

Finding an historic pattern with a globally invested fund, cannot mean that the pattern will repeat in the future.
However, there are instances where a repeat is likely to happen.

Find a business which continually spends more money every month than it earns, and you have a recipe over time, for (at best) a falling share price. Hardly ever made a profit during 109 years, but loved by so many and against all odds, still going. Bit of a snag owing £1billion, but hey ho, press on chaps. Investors who have held for 3½ years, have now lost 97%.

Pattern - A consistant average rate of share price decline, for ten months.





There are still some robust FTSE100 businesses, with dividend yields of 5%, 6% and 7%. Higher than cash, but not inflation.

[anonymous-user]

46and2 said:

Last time I looked, last friday I think, my LS100 was approx -7.5%, I've been buying since last november.

How much is inflation eroding my cash? I don't know but my guess is it by more.

Flawed logic as if you had just left it in the bank you would have had at least 7.5% more than you currently have. Using your logic, assuming inflation is 10% then your money is currently worth 17.5% less than it was a year OK.

[simong800]

I'm enjoying more units for cheaper prices personally.

When markets go up people don't want to buy as markets are too high.

When markets go down people don't want to buy as they'd rather wait until they are up again.....

[Simpo Two]

Joey Deacon said:

Flawed logic as if you had just left it in the bank you would have had at least 7.5% more than you currently have. Using your logic, assuming inflation is 10% then your money is currently worth 17.5% less than it was a year OK.

'Walking down a down escalator'.