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Is the stock market over heating?
Comments
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I'm currently running a finite, real world experiment with a lump sum investment versus a regular monthly contribution from an interest earning bank deposit.
It's early days so nothing meaningful to compare yet, I suspect there might not be a great deal of difference in the short, five and a bit year period i'll be running it, once the regular contributions are complete. The problem with conclusions is that any comparison is only ever relevant to the fluctuations over that period of time to which it applies. It says nothing about which will be the better option in future either way.
In a rising market, the LS always wins.
In a more volatile market, the regular investment does.
the Q is, where are we and where will we be 5 years from now? My guess is, it won't be an un-interupted upward 5 yr run.0 -
In a more volatile market, the regular investment does.
I don't agree, it's impossible to predict which will prove the better strategy in a volatile market. If it's close the dividend payout could easily swing it to the lump sum.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
sabretoothtigger wrote: »It wasnt lost, it just wasnt so fab. I was in there from 2001 onwards and it worked if reinvesting dividends.
Around 50% of investment in the stock market comes from dividends and their reinvestment.
Nat West was still an independent bank in 2001. Indexes are a misleading way of investing in my view.0 -
Old_Slaphead wrote: »How much do I need to become a rich git ?
Ever such a little bit more than the person of "normal means" that you're speaking to.
Everything is relative.
For example, the definition of "an alcoholic" is someone who drinks more than their Doctor.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Interesting. Is there anything that tabulates tracking error for trackers? It seems that it's not just fees that affect performance: I never would have thought a Santander fund would have beaten an HSBC fund, despite the HSBC having lower charges.
(Trustnet is currently down, so I can't check there)0 -
The money has to go somewhere and with people getting miserly returns for their savings they are turning to the stock market.
They are probably investing in oeic`s or trackers rather than directly into shares.
Funds are also switching from corp. bonds into shares and this is further adding to the "shares bubble".
With so much money sloshing around, the stock market will continue to rise, although not in a straight line (it never does).
I think Thursday`s sell off was more to do with profit taking after a fairly rapid rise so far this year, the long Bank holiday weekend, the continuing drop in the gold price and the desire to try to break the 7,000 barrier to set an all time record, etc., etc.
The market was looking for an excuse to "pause for breath" hence the drop.
While the money keeps flowing in the market has to rise.0 -
I never would have thought a Santander fund would have beaten an HSBC fund, despite the HSBC having lower charges.
This is perhaps because the charges quoted as what they are now. HSBC used to charge an arm and a leg for their tracker before Vanguard came along and made everyone wake up.
This is also how some active fund companies show their "outperformance". They find the tracker with the highest fees and worst tracking error, and then compare against which of their many funds managed to beat it over a carefully selected period.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
and thats why British Banks will never again make the money they allegedly used to. It was a waste of taxpayers money to bail them out.gadgetmind wrote: »HSBC used to charge an arm and a leg for their tracker before Vanguard came along and made everyone wake up.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
If I'm reading it right, to retire at 60 with the UK average wage (£27k) index linked would cost a million pounds.sabretoothtigger wrote: »I reckon a pension only stops being small at 250k, the rich part is a joke because of how much is needed to be sure.
This is how much annuity 100k buys, I think the dole pays more then that
Scary isn't it.:eek:“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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