Good time to invest in funds?

artha

Having taken a large profit in funds during late march/early april I am now considering putting money back into funds to take advantage of the current correction. Probably a bit of a difficult question to answer without compromise but are those of you who influence others either professionally or otherwise seeing an opportunity?

sabretoothtigger

Buy where you like the background prospects long term.

Short term its always possible for us to see a further correction down, I think another 10% would be reasonable even but since you are just placing money back at a better price then surely you're more able to take this risk having avoided some of the falls.

artha

sabretoothtigger wrote: »

Buy where you like the background prospects long term.

Short term its always possible for us to see a further correction down, I think another 10% would be reasonable even but since you are just placing money back at a better price then surely you're more able to take this risk having avoided some of the falls.

I've already fed a little back in but only into UK funds. The weakness of the pound puts me off putting anymore into overseas funds at this time and anyway I think I have enough overseas risk at 60%

DiggerUK

artha,
You should consider locking some of your gains away safely.
As you already have funds in NSI IL you might want to consider more certificates.
My other favourite is gold. It has come down a good 30 pound an ounce off it's recent high and shows signs of slipping back some more. Keep an eye on the dip to see how much lower it goes.
http://goldprice.org/gold-price-uk.html

Best of fortune.

artha

DiggerUK wrote: »

artha,
You should consider locking some of your gains away safely.
As you already have funds in NSI IL you might want to consider more certificates.
My other favourite is gold. It has come down a good 30 pound an ounce off it's recent high and shows signs of slipping back some more. Keep an eye on the dip to see how much lower it goes.
http://goldprice.org/gold-price-uk.html

Best of fortune.

Thanks diggeruk. I've got 30k coming in a week or two from a maturing ICICI fixed rate savings which is looking for a home an is probably earmarked for NS&I (me and OH). I'm a bit wary of physical gold even after reading many of your well intentioned posts.My only exposure is via commodity funds where I'm comfortable at this stage in my investing learning phase.

I was considering putting some money back into funds today but decided to wait until after the European Finance meeting today to see what effect that has

dunstonh

You never know when its good or bad. Trying to time the markets in the short term usually ends up being futile. You may wait thinking its bad now but today could be the low point. Or it could go down another 10% and that be the low point. Or it could go down another 5%, then suddenly recover 15% before you then go in thinking its better only to find it goes down 10% again.

You either accept the risk or you dont and realise that you have no control over events and as the markets react most on unexpected or unplanned information, there is no way to know when that comes.

Typically, though, investing when there is fear is better than when everyone thinks it easy money. If you look at gold, for example, that's a good example of a bubble just waiting to burst. Its had an uncharacteristic gain in a very short period after doing little or nothing for years and is significantly valued above its long term average. You see gold adverts everywhere and people saying invest in gold blah blah. That typically is the time to get out. You can replace gold with any other thing and it applies equally. Tech stocks become promoted in the media after they had achieved 90% of their gains.

Rollinghome

dunstonh wrote: »

You never know when its good or bad. Trying to time the markets in the short term usually ends up being futile. You may wait thinking its bad now but today could be the low point. Or it could go down another 10% and that be the low point. Or it could go down another 5%, then suddenly recover 15% before you then go in thinking its better only to find it goes down 10% again.

You either accept the risk or you dont and realise that you have no control over events and as the markets react most on unexpected or unplanned information, there is no way to know when that comes.

What I assume you mean is that you can't time the markets. And as an IFA it wouldn't be in your financial interests to suggest you could.

IFAs don't want to send prospects away without investing by telling them that now isn't a good time to invest and so many still encouraged investment even as huge risk was apparent during the crash of 2008. Advisers make money by persuading clients to invest, not by sending them away, and that why the investment managers offer them sales commission.

dunstonh wrote: »

Typically, though, investing when there is fear is better than when everyone thinks it easy money. If you look at gold, for example, that's a good example of a bubble just waiting to burst. Its had an uncharacteristic gain in a very short period after doing little or nothing for years and is significantly valued above its long term average. You see gold adverts everywhere and people saying invest in gold blah blah. That typically is the time to get out. You can replace gold with any other thing and it applies equally. Tech stocks become promoted in the media after they had achieved 90% of their gains.

That seems to be entirely the opposite of what you said in the first paragraph.

Investment managers presumably assert that they do have some ability to time investments to some extent and to select stocks for value. If you don't believe that then the answer would seem to be to drip-feed into an entirely passive tracker fund.

The truth is likely to be somewhere in between. It's not possible to accurately time markets but using some judgement rather than none is likely to improve returns. And that's what it's all about.

jamesd

artha, you might look at funds that hold commercial property, not property shares. It's been a battered market and should have decent potential over a few years.

The recent drops haven't been great and could well go lower so you might consider planning to put the money in over a few months. This is in part because the current trend is downwards and while that could reverse at any time there is an inertia factor.

artha

dunstonh wrote: »

You never know when its good or bad. Trying to time the markets in the short term usually ends up being futile. You may wait thinking its bad now but today could be the low point. Or it could go down another 10% and that be the low point. Or it could go down another 5%, then suddenly recover 15% before you then go in thinking its better only to find it goes down 10% again.

You either accept the risk or you dont and realise that you have no control over events and as the markets react most on unexpected or unplanned information, there is no way to know when that comes.

Typically, though, investing when there is fear is better than when everyone thinks it easy money. If you look at gold, for example, that's a good example of a bubble just waiting to burst. Its had an uncharacteristic gain in a very short period after doing little or nothing for years and is significantly valued above its long term average. You see gold adverts everywhere and people saying invest in gold blah blah. That typically is the time to get out. You can replace gold with any other thing and it applies equally. Tech stocks become promoted in the media after they had achieved 90% of their gains.

Not sure how this message will appear as I got a memory parity error part way through the reply.

Thanks DunstonH for your(as usual) considered, common sense and reserved(understand why) comments.There were a couple of points I thought debatable but I realise that others have already commented.

artha

What I assume you mean is that you can't time the markets. And as an IFA it wouldn't be in your financial interests to suggest you could.

IFAs don't want to send prospects away without investing by telling them that now isn't a good time to invest and so many still encouraged investment even as huge risk was apparent during the crash of 2008. Advisers make money by persuading clients to invest, not by sending them away, and that why the investment managers offer them sales commission.

I see where you are coming from on that but it is a bit broadbrush. One of the reasons I don't use an IFA(at the moment) is that I believe they cannot be as flexible with their clients as the DIY investor and I'd like to make my own mistakes/good calls first. Otherwise how can you judge whether an IFA is doing a good job?

artha

jamesd wrote: »

artha, you might look at funds that hold commercial property, not property shares. It's been a battered market and should have decent potential over a few years.

The recent drops haven't been great and could well go lower so you might consider planning to put the money in over a few months. This is in part because the current trend is downwards and while that could reverse at any time there is an inertia factor.

Thanks Jamesd.As part of my big strategy change/sell off in early April I shifted about 7% of my remaining funds portfolio into Aviva and M&G UK property funds.
I don't think they are going to make me rich but hopefully they will return a bit more than having the cash in savings