Time in the market

Biggles

he says we could be heading for unprecidented times in the short to medium term

That's just BS.

Newbie2saving wrote: »

I have a lump sum already invested through my IFA

I wonder if the answer is there. Is he doing very nicely out of your current investment and doesn't want to shift your lump sum yet?

BLB53

You could probably do a better job yourself - go diy!

R_P_W

When have we not been heading for potentially uncertain times?

dunstonh

An IFA's role is not to time the market. Nobody can tell the future. Sure, everyone has opinions but there are no better than a crystal ball. IFAs are frequently asked about things like this. It is something an IFA cannot win as if they do make a guess and get it wrong then they look stupid or even can suffer a potential complaint (pension forum has a thread like that ongoing at the moment). If they get it right then they get lucky but then there is the next time.

One thing the IFA should be doing is making sure you keep sufficient cash savings to cover your immediate and short term needs and that your investments not only match your opinion of the risk you want to take but also your capacity for loss and understanding of risks. Frequently, I find that you actually tell people to hold more in cash savings than they wanted.

There are always events going to happen which are unknown and not priced into the markets. Some positive things and some negative. If you start thinking that there are good times and bad times you will be a constant worrier with your investments and that is not good.

Rollinghome

Newbie2saving wrote: »

Any thoughts or comments appreciated....

If, as I assume, your IFA isn't making any money out of you while you remain uninvested, then at least you you should appreciate him for his honesty. The more common problem is for advisers to tell clients that any time is a good time to invest so that they start earning from their money. The phrase "it's not timing the markets but time in the market" is nonsense and just a sales line for the gullible.

We don't know exactly what your IFA has said but whether he turns out to be right or wrong it does seem to be an honest opinion. No one can give more than that.

No matter what dodgier advisers tell their clients their clients, timing is important, it's what competent fund managers do all the time when they buy and sell assets, and if you pay just 1% more for an investment than you could pay next month that is money you'll never regain no matter how long you hold the investment.

Linton

Rollinghome wrote: »

.....
No matter what dodgier advisers tell their clients their clients, timing is important, it's what competent fund managers do all the time when they buy and sell assets, and if you pay just 1% more for an investment than you could pay next month that is money you'll never regain no matter how long you hold the investment.

Timing is vital - if you can get it right. And with a bit of luck you will get it right about 50% of the time.

For the long term investor a better policy is "Time in the Market", not timing the market. It's less effort, less stress, and will probably give a better return. If you can triple your investment in 10 years, which is quite feasible, then whether you did or didnt gain 1% at the start is of little importance.

cepheus

lesstoinvest wrote: »

Well you are paying your IFA for his advice.

I'm not sure what the size of your pot is, but unless it is very large, it may not be realistic for him to pick out a number of individual 'undervalued assets'.

There isn't really such a thing as time in the market, you can win or lose each day, and it's quite possible that if you waited you could end up with 20% more in your pot at the end.

Equally, maybe not.

Nobody knows.

But if you don't like your IFA's advice, you don't have to take it.

Isn't it true that it has been better (on average) to invest at times of low Price Earnings ratio? This is for the FTSE all share which is around 14.75 today, this looks quite average.




http://articles.businessinsider.com/2011-12-06/wall_street/30480448_1_fund-managers-bad-luck-john-paulson/2

redbuzzard

Rollinghome wrote: »

The phrase "it's not timing the markets but time in the market" is nonsense and just a sales line for the gullible.

Call me Mr Gullible. If only I hadn't been invested for the last 3 months...

srcandas

Rollinghome wrote: »

No matter what dodgier advisers tell their clients their clients, timing is important, it's what competent fund managers do all the time when they buy and sell assets, and if you pay just 1% more for an investment than you could pay next month that is money you'll never regain no matter how long you hold the investment.

But the vast majority of fund managers do not time the markets. Most hold a very consistent level of cash and buy and sell as money flows in and out of the fund. And trackers are the worst example I can think of.

Not disagreeing with your ideas but the example doesn't hold water imho

Linton

cepheus wrote: »

Isn't it true that it has been better (on average) to invest at times of low Price Earnings ratio? This is for the FTSE all share which is around 14.75 today, this looks quite average.




http://articles.businessinsider.com/2011-12-06/wall_street/30480448_1_fund-managers-bad-luck-john-paulson/2

It may be better but that doesnt provide any answer to the timing question. If you arent in a period of very low PE what do you do? Are you better off leaving your money in the bank? From the graph almost all the data points show an average over 10 years greater than current bank interest.