Urgent quick advice needed: Stop my h-l drip feed this month?

evilplan

Hi everyone

I started a thread recently, as a new investor, and am still digesting it (and working through Tim Hale's book!).

I've just got a quick question. My plan for the start of my investments is to put solidly into trackers, diversified over the months; that's not important right now (although I may come back for advice on it; I'm planning on a riskier strategy based around passive funds in the main).

H-L is about to take my first direct debit, of several £hundred. I've allocated it into my choices - stuff like, HSBC all-share tracker.

So, I've not got investments yet - my question is about whether to invest right now, today. It's the last day where I can change my DD - not the amount, just the allocation.

With the turmoil in the markets, should I

1) Set it and forget it: I've allocated it, don't try to time the markets

or

2) Cancel the allocation, leave it as cash, and buy my planned ETFs with the balance later on (was planning on doing this in a few months anyway)?

Having read Hale's book, I absolutely know it's stupid for an amateur to try to time the markets. And I *am* playing for 10-15 years, so I know things smooth out.

But given that I do actually have a choice here - simply to invest today or wait a couple of weeks - I may as well think about whether it brings an opportunity.

I am not gonna sit there neurotically monitoring shares. All I know is, the markets are down, will likely drop a bit further, and will rise again. So perhaps it makes sense not to buy into a tracker today, but maybe next month?

(This isn't how I'm going to play my investments - once I buy, I won't sell just cos the markets drop; I just don't want my *first ever investment* to make me cry lol)

I hope this makes sense - it's a tactical question; I'm not asking out of fear, I'm just wondering cos the financial press is incredibly doom-laden right now, talking of a re-run of 2009, and we might see another few weeks of this nonsense, or even a few months; I already know that in 2009, I would've waited if I had seen this happening - but I guess more importantly, I know that the markets tend to go up over time so the rough times are smoothed out. I know that in all probability, even if I allocate my H-L DD today and lose money immediately, I'll make it back.

evilplan

(btw it's only urgent cos I'm guessing I've only got a few hours to make this decision, not cos I'm clicking "refresh" on the FTSE every 15 seconds )

westy22

I know that in all probability, even if I allocate my H-L DD today and lose money immediately, I'll make it back.

If I had some spare cash today, I would jump in wholeheartedly! OK, the FTSE may drop some more today, or even on Monday and Tuesday, but I still think that overall the next few days are a buying opportunity.

evilplan

My plan for now was, some on HSBC all-share tracker, some on L&G global emerging markets tracker, some on L&G index linked gilts.

I sort of feel the same - the markets may fall more, but they've already fallen enough to make it worth buying.

The other downside of leaving it to cash is, if everything goes back lovely in a few weeks, I'll have lost out and been guilty of trying to time the markets.

Hmm, maybe "set it and forget it" *is* the right option - cos I don't want to be analysing this stuff every month in case of a tiny loss here vs a tiny gain there.

westy22

This is the 'Pound Cost Averaging' that benefits regular buyers. If you buy in the next few days you will have crystallised an 8% saving on what you would have been able to buy last week with the same money. Companies may have lost 8%-12% of their capital value but they are still making the same profits in monetary terms so, in fact, they are more profitable than last week because the ratio between Profit / Capitalisation has increased.

Many investors 'dither' about when to buy and therefore miss opportunities - that is why a Standing Order is an excellent discipline.

edinburgher

It strikes me that you've got a perfect opportunity to buy in to the market - I'd be pleased as punch if I had a DD about to go into shares

Yes, I know they'll probably go down some more. But then they'll go up, then they'll go down (and so on). I think we're years (decades?) off fixing the problems with the global economy personally, but do you really see the world as we know it coming to a messy end this week? I don't think so.

evilplan

Yep, I think you're both right. If I say "remove the DD for this month", I'm guilty of playing a market I don't understand.

I'll carry on with the "smarter investing" approach: I set myself a strategy and I must stick to it, even if it feels like fun to play around

Thanks for your help. I've decided, I'll stick with my allocation plan for this month - 50% HSBC, 25%-25% to the other 2 (I will be introducing other funds and balancing it differently over the months - need to save up some cash to buy ETFs and swallow the fees, which is why my initial investment might look a bit odd)

ShelleyC_2

Like you I am dipping my toe in the investing waters for the first time at some point next week with HL.

I'm actually getting excited that this seemed a good time to be getting in and was thinking about also chucking in a lump sum? But decided might be better to stick with my monthly investing plan and learn to walk before attempting any running or jumping!

ffacoffipawb

ShelleyC wrote: »

Like you I am dipping my toe in the investing waters for the first time at some point next week with HL.

I'm actually getting excited that this seemed a good time to be getting in and was thinking about also chucking in a lump sum? But decided might be better to stick with my monthly investing plan and learn to walk before attempting any running or jumping!

Can you log in to your HL account?

evilplan

Do we all get our direct debits taken out at the same time?

I realised, after reading the responses, that even though I thought I was trying to be clever, there's nothing more stupid than second-guessing the markets on a day-by-day basis. So, yeah, like you ShelleyC, I'll stick to the plan

If there's one thing I got from that book (heavy going but really worth reading), it's "stick to your plan".

evilplan

I've been able to access my HL account no problem