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Those who don't sell at the bottom have lost just as much money as those who do.
But the silliest reason to hang on is the idea that you haven't lost if you don't sell.
Maybe it's splitting hairs but if you sell you do crystalise a loss. If you don't sell you have no loss, only a theoretical drop in value. I held on because the investments I had were ones I believed in.
Anyone selling in 2008/9 and moving to cash would have lost out on some of the biggest gains. It seems very unlikely that anyone who describes themselves as selling out at a low point would do anything other than move into cash. I don't see that anyone who is selling and re-buying other investments is actually selling out at all, just trading.Remember the saying: if it looks too good to be true it almost certainly is.0 -
It was you that mentioned value. Is value unrelated to price?gadgetmind wrote: »At last, someone who gets it, someone who has a crystal ball!
Please let us all know the next top and the next bottom.
Should I really buy stuff withour caring what the price is or which way i think it's going?"It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
But I can now buy 20 identical Apple shares, so I've got exactly the same as you, but I paid less.If you buy 20 Apple shares and the markets tank bringing Apple share prices down you still have 20 Apple shares, you haven't lost anything.
If we sell together, I make more profit than you. The difference is your loss.
And if they should pay a dividend, my yield is higher than yours, because mine is based on the price I paid, and yours is based on the price you paid. In fact, your shares might appear to be underperforming, relative to alternative options on the market.. So should you sell while I hold? Of course not, because we should both be looking at what the shares pay in relation to what they will currently fetch. Which means that you're effectively writing off your loss."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
That's a good reason. Make a judgment call and bet on it.I held on because the investments I had were ones I believed in.
Maybe you're a good judge. Of course, if you were to find that you aren't, and things often don't turn out as you expect, and the things you believe in are often turkeys, then you should probably take the hint.
And of course, having done well from your own above-average judgment (or luck) would be a poor reason for recommending investment to people whose judgment (or luck) is likely to be less good than yours (simply because yours is above average)."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
the best plan for a few decades is to assume that the next few decades won't go according to plan.
i completely agree.So I'll lend my money to some asset manager, who can pay me interest and keep the profits. Everybody wins.
my point hasn't been about using asset managers vs DIY. my point was that it's better to invest for the long term than to stay all in cash. that' it.
it's definitely important to minimize the costs of investing, whether you use managers or DIY. because it makes a big difference to long-term performance. and you can calculate your costs in advance. unlike your investment return.But that deal doesn't seem to be on offer. Mainly because if we look at actual samples of "broadly-based investment portfolios" we see a wide spread in performance.
yes, there are different portfolios, which meet my criteria of being broadly based, and yet have very different performance. all i was saying is that 1 should go for 1 of them. a crystal ball to pick the best 1 is not included.The win-win portfolio you're inventing here is a fiction. A portfolio that's capable of doing very well is also capable of doing very badly. One that can't do badly can't do well either.
i'm not claiming to eliminate the risk of doing badly. i'm claiming that a decent investment portfolio has less chance of doing badly than an all-cash portfolio in the long term. (and a much better chance of doing very well.)Investors can be strangely schizophrenic. They don't seem to know whether they're trying to take risk or insure against it. So they bet against themselves all the time.
You were saying that those who take the risk will aim for a higher reward.
i was saying that taking on risk to aim for a higher reward is only sometimes a good plan. there is good evidence that some asset classes perform better than others. i'm sceptical about some other claims of outperformance, that e.g. that emerging markets will outperform.I'm saying they don't get the reward they aim for, when you take an overall average including the ones that fail.
There are always winners and losers. If you expect to win, who do you think will lose?
0) the ppl who have no capital to invest.
1) the ppl who stay in cash for the long term.
2) the ppl who incur excessively high charges.
3) and, among the ppl who don't fall under 0)-2), but fail to diversify properly, there will be both winners and losers.0 -
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how anyone can believe what they read in the daily mail. :j
I believe the date on the front page, it all goes downhill after that ... https://www.youtube.com/watch?v=5eBT6OSr1TI“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
I was buying then too, and of course that has worked out very well (Graphite 160% gain plus dividends). With hindsight I should have put everything in then. But when you are retired, with no prospect of earning more, you feel less inclined to risk everythinggadgetmind wrote: »You should have seen what a piggy I was in early 2009 .
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Glen_Clark wrote: »I was buying then too, and of course that has worked out very well (Graphite 160% gain plus dividends). With hindsight I should have put everything in then. But when you are retired, with no prospect of earning more, you feel less inclined to risk everything
Definitely. Private equity shares in 2009 were a massive bargain, some at 90% discount was a no brainer when they had cash worth more than that alone, assuming a zero value of all their other assets.Remember the saying: if it looks too good to be true it almost certainly is.0 -
Definitely. Private equity shares in 2009 were a massive bargain, some at 90% discount was a no brainer when they had cash worth more than that alone, assuming a zero value of all their other assets.
The scary bit was that, unlike the trusts which own shares where the prices are updated daily, these Private Equity Trusts own companies that are valued maybe every 6 months. And with all the scares about black holes in the bank's balance sheets, the banks not lending to each other because they didn't trust each other's accounts, nobody trusted the valuations of these Private Equity Trust assets either. I wouldn't say it was a no brainer because there were grounds to be fearful, certainly I did not dare to risk it all. But the fear turned out to be massively overdone.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0
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