Is it right to Invest in Stock Market Before the ...

[dude0nvacation]

Hi Everyone,

I am wondering if investing stocks is a great idea before the year ends... I heard that stocks are booming - so is this the best time to invest or should I wait for it to drop?

Any advice on this is appreciated - I am new to this thing and need to think a million times for this.

Cheers!

[jimjames]

Not sure where you heard that stocks are booming and that it is a good time to invest. If you are investing on the basis of that kind of advice then you could be setting yourself up for losing money.

Before you invest any money you should make sure you fully understand what you are doing, the risks and what you are invested in.

If you don't have an ISA then that should be your first port of call to make sure the investments are tax free.

[Linton]

Shares arent booming at the moment, they have been pretty static for a couple of years. If they were, then it would be better if you had invested earlier.

As to whether it is a good time to invest, I believe that if you are planning to drip feed rather than putting in a large lump sum any time is a good time to invest.

You do need to first ensure that you have a significant safety net, say 6 months living expenses, in cash accounts to cover emergencies and to ensure that you dont need to sell your investments quickly should you lose your job. Investing is for the long term.

[dunstonh]

I heard that stocks are booming

Markets are doing what they always do. Going up and down within normal levels of volatility. No boom.

Timing has little to do with long term returns. Short term could be measured but unless you have a crystal ball you will never know when it is best. Generally though, it is often better to invest when the markets have or are falling. Not after they have boomed (a real boom that is).

[Glen Clark]

Originally Posted by jimjames

Not sure where you heard that stocks are booming and that it is a good time to invest.

That is not what the OP said.

[Strumminalong]

As a new inexperienced investor stocks and shares should be really be viewed as a long term investment and trying to time the market is virtually impossible.

However, you could possibly consider the likelihood of another traditional annual santa rally vs the chances of the US fiscal cliff kicking in on Jan 1.

[buffman]

There is a tendancy for stocks to rise from the beginning of December until the end of January. Happens most years but not all!

[sabretoothtigger]

Well last year was the opposite. There is a bermuda triangle effect where large amounts of traders just disappear over the holiday and shares lose their compass for the duration.
Most of the worlds money is in bonds still

Its not exact but at some point the selling and lack of interest becomes irrational, after xmas we had a very strong few weeks of rising before we resumed the now usual chaos.

This year we could have a 'eerie' lull and rising prices over holidays, depends how bad this present market sell off gets before Dec

To enter the market on this basis is pretty foolish as a new investor. Whats more usual is to say I want to invest before april, this is because of taxes. In USA I think have to file or total up their accounts before dec 31st so perhaps some logic is there but usually its quiet more then anything.

Xmas 2010 was Dubai crash before then it was positive over xmas. 2009 I forget but 08 was positive and was awful after.

I suggest invest monthly for at least a year, theres not really a rush. This is not a bull market, price the FTSE vs petrol or food or any major bill outside housing and it should show up this is not a real rising market

[rockitup]

If you are so new to investing, why not try some regular monthly investments into a low cost tracker fund or Generalist Investment Trust. As Strumminalong pointed out timing the market ain't easy (although I do have a go sometimes...)

When you get a fair size portfolio up and running then you could risk a portion on seasonal investing on the FTSE/DOW/S & P or similar.

There is a very useful book to read about seasonal investing "Stock Trader's Almanac" by Jeff Hirsch. If you have iPad or iPhone they also have an app on the App Store. Read before you try and no harm having a demo account to paper trade it before you decide whether to risk any money on it. The book and the app have yearly editions so the 2013 is the new release for the book. 2013 App probably comes out in January