why are all shares generally tanking? FTSE was 6800+ now 6500

IveSeenTheLight

chucknorris wrote: »

The stock market is lower than it was in 1999! It is also lowish on the P/E ratio.

Indeed, 15 years later, the market is lower than it was in Dec 1999.
That tells me that it has not been a great investment over the last 15 years, with any winners being balanced by equal value of losers, arguably with inflation factored in, there have been more losers than winners.

wotsthat

IveSeenTheLight wrote: »

This is what I don't understand and hence I am fearful of shares (My fingers have been burn't before)

Aren't shares pretty much the same investment mechanism as BTL?

You buy a house/ shares and pay fees/ commission. You get returns via rent or dividends and both assets are tradeable.

The main differences seems to be that shares are much more liquid so you can value your assets on a minute by minute basis and it's unusual for a normal punter to borrow to invest in shares but normal for BTL.

You can try and ride out a fall in valuation of shares in the same way as you would if you didn't like the valuation of a house - just dont sell.

Linton

IveSeenTheLight wrote: »

Indeed, 15 years later, the market is lower than it was in Dec 1999.
That tells me that it has not been a great investment over the last 15 years, with any winners being balanced by equal value of losers, arguably with inflation factored in, there have been more losers than winners.

Not the case as it ignores dividends which would be continuously re-invested at what were at times very low prices. If you had invested in the FTSE100 in December 1999 and reinvested dividends your investments would have grown by about 70%, an average of 3.6% annually. With care this could all have been tax free.

IveSeenTheLight

wotsthat wrote: »

Aren't shares pretty much the same investment mechanism as BTL?

You buy a house/ shares and pay fees/ commission. You get returns via rent or dividends and both assets are tradeable.

I'm sure it is, but I am one of those that was burned by share investments with no dividend returns

BTL on the other hand is more tangible and lower risk in my experience.

If invested right, a very decent profit can be made, without the need to consider any capital appreciation which becomes a bonus at the end of the investment.

£ per £ investment, I can't see how investing in the FTSE 100 can give a better more stable return than BTL unless you are one of the lucky ones, to the detriment of those that have lost value.

IveSeenTheLight

Linton wrote: »

Not the case as it ignores dividends which would be continuously re-invested at what were at times very low prices. If you had invested in the FTSE100 in December 1999 and reinvested dividends your investments would have grown by about 70%, an average of 3.6% annually. With care this could all have been tax free.

So, in 15 years, you are stating that by reinvesting your dividends, your share value would have increased 70% (a 3.6% yearly return on the investment)

Arguably, you could have made a better return simply in a long term ISA

BTL investments on the other hand has provided a better "dividend" return as well as seeing capital appreciation

chucknorris

IveSeenTheLight wrote: »

So, in 15 years, you are stating that by reinvesting your dividends, your share value would have increased 70% (a 3.6% yearly return on the investment)

Arguably, you could have made a better return simply in a long term ISA

BTL investments on the other hand has provided a better "dividend" return as well as seeing capital appreciation

I can certainly see where you are coming from, we too have hit the jackpot with investment property over the last 23 years. But I think the thing is that we are probably looking back at a period when property really excelled (thank god) whereas shares under performed. There is no guarantee that that will continue, in fact, that in itself could be an argument to expect the reverse to happen over the next 20 years or so. Of course I don't know, I am only playing devil's advocate.

Thrugelmir

IveSeenTheLight wrote: »

Anyone who has bought and still holds shares in the Royal Mail has made a loss

How many people read the Racing Post instead of the prospectus?

Amongst the hundreds of printed pages were very clearly printed health warnings.

Short termism is not investing it's taking a punt.

IveSeenTheLight

chucknorris wrote: »

I can certainly see where you are coming from, we too have hit the jackpot with investment property over the last 23 years. But I think the thing is that we are probably looking back at a period when property really excelled (thank god) whereas shares under performed. There is no guarantee that that will continue, in fact, that in itself could be an argument to expect the reverse to happen over the next 20 years or so. Of course I don't know, I am only playing devil's advocate.

I can understand the argument that shares may be undervalued being currently under their value 15 years previously, but then you consider is the economy stable enough to sustain rapid growth in share value.

Similarly, we look at property, the projections on house building and the projections on population increase and can only surmise there will be an increasing demand for property.

So what to invest in?
Where is our investments more secure?
How do I hedge against property increases for my childrens future options?

There are no guarantees, I grant you that, but similarly, there is likely a more stable, hedged option

Thrugelmir

IveSeenTheLight wrote: »

Indeed, 15 years later, the market is lower than it was in Dec 1999.
That tells me that it has not been a great investment over the last 15 years, with any winners being balanced by equal value of losers, arguably with inflation factored in, there have been more losers than winners.

See my previous comment. That sums up the Dot Com boom of the late 90's.

What you are failing to take account of is the index is a changing beast. Every quarter shares are relegated and promoted in and out of the index. In addition to which companies disappear when taken over, delisted, get floated or go bust. So the constituents regularly change.

I would it had to believe that serious property investors never buy a dud. However much due diligence is applied.

IveSeenTheLight

Thrugelmir wrote: »

How many people read the Racing Post instead of the prospectus?

Amongst the hundreds of printed pages were very clearly printed health warnings.

Short termism is not investing it's taking a punt.

I have shares from 20 years ago that are worth a fraction that I invested in.
That's not short termism.

Clearly the FTSE 100 has not grown in 15 years, merely recovered and the question is whether a 3.6% dividend return is an acceptable investment.

There have been examples where you could have made a very tidy profit, but equally (if not more) investments where your share value has reduced.