S&S ISA funds - keep as cash and wait for a crash?

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adonis10
adonis10 Posts: 1,810 Forumite
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in Savings & investments
I am currently a novice and am simply investing circa £400/month into VG LS 80 and 100 (90:10 ratio, roughly) with a ~7% return to date (< 1 year). Given that the market is particularly high at the current time, is there a point where you simply maintain the regular payments into the ISA but keep as cash until unit prices drop? I can't help but think that buying at the current time is buying very high, however I am a novice so this could be completely incorrect.


Another option, of course, is to invest in different funds which are not currently performing as well. If so, for those who invest heavily in VG LS, what others do you dip into?


I am sure this thread will open up related discussions which is fine as I am eager to learn more.

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  • sorcerer
    sorcerer Posts: 878 Forumite
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    The problem you have is that, when you do think the market is going to drop? Could it be next week or in 10 years time. If the market doesn't drop in 10 years will you still be in cash?

    Nobody knows, so I don't worry too much about it, if you are investing monthly, then the cost will average out anyway over time.

    Also, the markets might appear high now, but what if they go even higher, and you loss out from the market gains. You might then rush in seeing the price going higher and then the market drops. :mad:
  • Anonymous101
    Anonymous101 Posts: 1,869 Forumite
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    Google "Time in, not timing, the market"
    There's lots of articles on why trying to time the market isn't a good idea.
    I think you're doing right investing into those funds. Just keep doing it come rain or shine and you'll do better over 10+ years than you will trying to guess when to invest while your cash is effectively depreciating.
  • adonis10
    adonis10 Posts: 1,810 Forumite
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    sorcerer wrote: »
    The problem you have is that, when you do think the market is going to drop? Could it be next week or in 10 years time. If the market doesn't drop in 10 years will you still be in cash?

    Nobody knows, so I don't worry too much about it, if you are investing monthly, then the cost will average out anyway over time.

    Also, the markets might appear high now, but what if they go even higher, and you loss out from the market gains. You might then rush in seeing the price going higher and then the market drops. :mad:

    Makes sense and has been my approach to date.
  • Malthusian
    Malthusian Posts: 10,938 Forumite
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    Stockmarkets are usually at their peak. The FTSE has been at or within 10% of its peak 55% of the time during the last 55 years. If you spend over half the time out of the market you are going to miss out on well over half of the dividends and capital growth.

    If you sold out at this point during the last bull run (1987-2000), you would have been waiting another five years in cash watching your savings dwindle in value before the eventual crash came.
  • EdGasketTheSecond
    EdGasketTheSecond Posts: 2,558 Forumite
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    Buy low, sell high. Simples.
  • economic
    economic Posts: 3,002 Forumite
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    EdGasketTheSecond wrote: »
    Buy low, sell high. Simples.
    or buy high, sell higher.
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