Shall I invest in funds now or wait for a bit longer

jonj123

Hi

I am new to investing and have done a bit of research on funds and have come up with 5 or 6 funds to invest in through Hargreaves Lansdown.
Shall I invest now or wait for a bit longer before I invest? Does now seem like a good time to invest or is double dip recession on it's way?
I appreciate any suggestions.

P.S. As I'm totally new to investing in funds I would also appreciate any tips. I used the Hargreaves Lansdown top 150 funds list and selected 5 or 6 that appealed to me the most.

Many Thanks

jem16

jonj123 wrote: »

Hi

I am new to investing and have done a bit of research on funds and have come up with 5 or 6 funds to invest in through Hargreaves Lansdown.
Shall I invest now or wait for a bit longer before I invest?

Are you sure after your anger over losing £430 in one week that you are really cut out for investing?

Does now seem like a good time to invest or is double dip recession on it's way?

Have you got your crystal ball?

P.S. As I'm totally new to investing in funds I would also appreciate any tips. I used the Hargreaves Lansdown top 150 funds list and selected 5 or 6 that appealed to me the most.

Many Thanks

What funds have you selected and why those?

jonj123

jem16 wrote: »

Are you sure after your anger over losing £430 in one week that you are really cut out for investing?

Have you got your crystal ball?

What funds have you selected and why those?

I'm slowly getting over my initial anger. What annoyed me more was the fact that just before I cancel my S&S account I was told by the salesperson in the bank that the stock market hasn't really changed and I am most likely to get my original investment back. Oh well I've learnt a lesson.

Anyway thanks for your reply. I have chosen the following funds based on their past performance:

Aberdeen Asia Pacific A Accumulation
BlackRock Gold & General Accumulation Units
Fidelity South East Asia Accumulation Units
First State Greater China Growth Class A Accumulation
Lazard Emerging Markets Retail Income Units
Melchior Asian Opportunities A GBP Accumulation.

Cleaver

jonj123 wrote: »

I am new to investing and have done a bit of research on funds and have come up with 5 or 6 funds to invest in through Hargreaves Lansdown.
Shall I invest now or wait for a bit longer before I invest? Does now seem like a good time to invest or is double dip recession on it's way?
I appreciate any suggestions.

P.S. As I'm totally new to investing in funds I would also appreciate any tips. I used the Hargreaves Lansdown top 150 funds list and selected 5 or 6 that appealed to me the most.

My advice, for what it's worth...

You said in a thread yesterday:

Natwest stocks and share account cost me £430 in a week! I'm on the verge of crying!

If this is the case then why are you getting back in to this? You could quite easily see a £400 +/- swing on any volatile week. I think I have a strong stomach for these things but there was a 12 day period in late April / early May this year when my portfolio dropped by nearly 15%. If you feel like crying when losing £430 in a week, how would you feel about 'losing' £3,750 in less than two weeks on the same amount you invested?

My portfolio has recovered somewhat since then, but unless you have a long term view of 5+ years (at least) then I wouldn't be investing. Therefore I wouldn't really be worried about a double dip if you do invest. You said that you invested £25,000 in one lump sum. Unless you had an initial total of £300,000 and already were splitting up your pot, I would look to drip feed money in to funds over the next year or so. Decide what funds you want and maybe put in £3,000 a month through those funds, thus averaging out the bumps, peaks and troughs. If you invest through H&L you can transfer any amount of money out of a fund into another, meaning that although the stated minimum in each fund is usually £1,000 you can get away with any amount you want.

What areas are you looking to invest in and why? What's your timeframe and goal from your investments?

jem16

jonj123 wrote: »

I'm slowly getting over my initial anger. What annoyed me more was the fact that just before I cancel my S&S account I was told by the salesperson in the bank that the stock market hasn't really changed and I am most likely to get my original investment back. Oh well I've learnt a lesson.

Main lesson is never trust a bank salesperson.

Anyway thanks for your reply. I have chosen the following funds based on their past performance:

Past performance is not a guide to future returns and should never be the sole reason for choice.

Aberdeen Asia Pacific A Accumulation
BlackRock Gold & General Accumulation Units
Fidelity South East Asia Accumulation Units
First State Greater China Growth Class A Accumulation
Lazard Emerging Markets Retail Income Units
Melchior Asian Opportunities A GBP Accumulation.

Now I'm no expert on fund choice but these are high risk funds and almost all in the one sector. You have no diversification and no downside protection.

If you can't handle a 2% drop without getting angry you certainly can't handle tohe volatility that these funds will provide.

Cleaver

jonj123 wrote: »

I'm slowly getting over my initial anger. What annoyed me more was the fact that just before I cancel my S&S account I was told by the salesperson in the bank that the stock market hasn't really changed and I am most likely to get my original investment back. Oh well I've learnt a lesson.

Anyway thanks for your reply. I have chosen the following funds based on their past performance:

Aberdeen Asia Pacific A Accumulation
BlackRock Gold & General Accumulation Units
Fidelity South East Asia Accumulation Units
First State Greater China Growth Class A Accumulation
Lazard Emerging Markets Retail Income Units
Melchior Asian Opportunities A GBP Accumulation.

You're pretty heavily invested in Asia and emerging markets and only in equities, is this the strategy you've consciously gone for? And without looking at the detail there might be a bit of overlap in these funds.

For a balanced portfolio I would personally want some UK, European, American equities, some bond funds and possibly something a bit less volatile such as some gilt funds to level it all out.

If you really think Asia is the place to be, then go for the selection above. But that seems to me to be more of a bet on Asian / Emerging Stock Markets than it does a balanced portfolio.

jonj123

Thanks for your advice cleaver. I will want to start off by investing £1000 in each of the funds I stated in my previous post and then add over time as you recommended. I have about 55K out of which I can put away 35K for a long term investment of about 3 years which is when I'll finish university. My ultimate goal is to be able to buy a small flat outright by the time I finish uni

Linton

IMHO your list is high risk and too heavily focussed in one area - Asia/Pacific. Sure, these funds have done very well over the past few years but that's what happens with risky funds - when they do well they can do very very well, but when they dont they dont. In particular China values could have a major collapse at some time.

From your previous comments it would seem that you cant cope with temporary falls, so this may not be the best strategy for you.

Personally I can cope with falls and I like the higher risk funds. But if you are going to follow that route you do need better diversification - eg technology, small companies, raw materials, special situations.

You also need a fair amount invested in much safer areas. This will enable you to cream off some of the profits from the higher risk funds during the good times and reinvest in those funds when you can buy more cheaply.

One suggestion for you, dont just look at the funds with the highest returns overall, look at those funds that have performed best during the more difficult times.

Linton

jonj123 wrote: »

Thanks for your advice cleaver. I will want to start off by investing £1000 in each of the funds I stated in my previous post and then add over time as you recommended. I have about 55K out of which I can put away 35K for a long term investment of about 3 years which is when I'll finish university. My ultimate goal is to be able to buy a small flat outright by the time I finish uni

Three years is NOT long term, it's short/medium. Personally I would only put a small percentage of my wealth in any equity funds if that really is the timescale. You would probably be better off with most of your money in some sort of higher interest savings even if the rates are low.

Cleaver

jonj123 wrote: »

Thanks for your advice cleaver. I will want to start off by investing £1000 in each of the funds I stated in my previous post and then add over time as you recommended. I have about 55K out of which I can put away 35K for a long term investment of about 3 years which is when I'll finish university. My ultimate goal is to be able to buy a small flat outright by the time I finish uni

Three years is really a short timeframe to be investing in funds, which I'm sure other people will echo on here. Sorry, it sounds like we're all being very negative towards your strategy, but you need to have a real think about this.

Say you put your £35,000 in to these Asian funds over the next three years. There's a possibility (and not a distant one) that these markets could fall 30% over the next three years (they could rise by that amount as well of course). How would you feel when it came to buying your flat after Uni if your £35,000 was worth less than £25,000? This is a plausible situation if you're only investing over a short time-frame (which three years is in the world of investing).

If I were you...

I'd lock £50k of the money in to a fixed term savings product for three years. Your money is therefore safe for your propety purchase. Then if you want some risk (and some fun because, let's face it, investing is quite good fun) stick the remaining £5k in to some risky funds. Just be prepared to lose a good chunk of it.

jonj123

Yes I didn't really pay too much attention to diversification and the reason those funds appealed to me most was because they had performed significantly better than other funds in the past. So I willl re-ook into this and try to diversify my choice based on sector and region. I mainly look at the HL top 150 list and morningstar to do my research - What other websites do people on this forum find useful for research?

I understand that past performance is not an indication of future performance but how else would I be able to research whether a fund is good to invest in without considering the past performance? What other factors should I be looking at?

P.S. I will take your advice on board cleaver and invest 5-6K initially and if I decide I want to risk more of my money I'll add more in future.