Is a Crash Likely (2015-ish)? Should a New Investor Wait a While to See?

Damage

Thanks, it's interesting to see an example of how one might react to the level of an index.

I have been looking at investment trusts and a few of the same names keep cropping up, so that is something I will look into when I have finished reading my book.

arbster

Damage wrote: »

Thanks, it's interesting to see an example of how one might react to the level of an index.

I have been looking at investment trusts and a few of the same names keep cropping up, so that is something I will look into when I have finished reading my book.

I'd caution against trying to time the market, as others have. As you're a reader, I'd recommend Smarter Investing by Tim Hale. Ideally before you get too heavily into investing - I've just had to restructure my investments significantly having "seen the light".

Damage

Thank you, yes, I'm actually reading that book at the moment. It's a very interesting book, especially the statistics he uses to support his argument. I haven't yet read widely enough to get a balanced view, but at this stage I can't see any reason not to follow his advice.

Glen_Clark

Damage wrote: »

Thank you, yes, I'm actually reading that book at the moment. It's a very interesting book, especially the statistics he uses to support his argument. I haven't yet read widely enough to get a balanced view, but at this stage I can't see any reason not to follow his advice.

I like 'Smarter Investing' by Tim Hale too. I didn't learn anything from it because I had already spent many years learning it the hard way But I wished I had read it many years ago.
The only thing I can add to it is that you can sometimes buy managed funds, like Investment Trusts, at a discount to net asset value. So the fund management are a liability that is already priced into the shares. I never found that point in his book.

green_man

The problem with looking at these charts is you can interpret them in almost any way you want. Certainly I would not be putting a large lump sum in the US index at the moment which is probably overvalued (but could still rise another 10-20 % before a correction). But the UK market is totally different.

The current 'bull run' isn't really that at all, it's just a recovery from the large drop from the financial crisis, we are in fact below the level of 2008 and below the level of 1999. Also you could also make a case that there was a bull run all the way from the 70s up until 1999, the dips experienced here were short lived and the market was consistently breaking new ground. The dips of 2000 and 2008 took much longer to recover from and the UK market has broke little new ground since 1999.

Damage

Glen_Clark wrote: »

I like 'Smarter Investing' by Tim Hale too. I didn't learn anything from it because I had already spent many years learning it the hard way But I wished I had read it many years ago.
The only thing I can add to it is that you can sometimes buy managed funds, like Investment Trusts, at a discount to net asset value. So the fund management are a liability that is already priced into the shares. I never found that point in his book.

The investment trusts that I have noticed being mentioned in a good light a number of times are City of London, Murray International, Woodford UK Income and Newton Asian Income.

I'm not quite sure how I might incorporate those (if I actually do) into my portfolio, or in what percentages, but it's something I will read into after I have finished reading this book.

Vanguard LifeStrategy (80 or 100) funds are the ones I am most interested in at this stage. I don't know if the diversification within those provide the (relative) safety, or if I need to create that myself by investing in funds that aren't specifically Vanguard LifeStrategy. If those funds function in the necessary way (in accordance with Tim Hale's advice) then I presume that they could constitute my whole investment (cash element excepted, of course). I need to read further into this though as I'm currently not very well informed.

Damage

green_man wrote: »

The problem with looking at these charts is you can interpret them in almost any way you want. Certainly I would not be putting a large lump sum in the US index at the moment which is probably overvalued (but could still rise another 10-20 % before a correction). But the UK market is totally different.

The current 'bull run' isn't really that at all, it's just a recovery from the large drop from the financial crisis, we are in fact below the level of 2008 and below the level of 1999. Also you could also make a case that there was a bull run all the way from the 70s up until 1999, the dips experienced here were short lived and the market was consistently breaking new ground. The dips of 2000 and 2008 took much longer to recover from and the UK market has broke little new ground since 1999.

Thank you, all noted. I'll just have to see what has happened with the market when I feel that I have learned enough to make some informed decisions with my investments. Perhaps I'll be lucky and it will coincide with a dip in the market.

green_man

Thank you, all noted. I'll just have to see what has happened with the market when I feel that I have learned enough to make some informed decisions with my investments. Perhaps I'll be lucky and it will coincide with a dip in the market.

The wise thing to do (if you have the option) is to drip feed your money in monthly over a year or two (ideally just keep putting money in every month). It is estimated that more upside is missed by people trying to time the market than downside avoided.

green_man

Vanguard LifeStrategy (80 or 100) funds are the ones I am most interested in at this stage. I don't know if the diversification within those provide the (relative) safety, or if I need to create that myself by investing in funds that aren't specifically Vanguard LifeStrategy. If those funds function in the necessary way (in accordance with Tim Hale's advice) then I presume that they could constitute my whole investment (cash element excepted, of course). I need to read further into this though as I'm currently not very well informed.

Exactly - These funds provide a good balanced way into the market. Any additional funds you add would likely make your investment less balanced. But if you want to be an active trader and do it as a hobby as well then it's not much fun just having one fund :-)

steelbru

Damage wrote: »

The investment trusts that I have noticed being mentioned in a good light a number of times are City of London, Murray International, Woodford UK Income and Newton Asian Income.

Woodford Equity Income is not an investment trust, it's a fund ( or OEIC ). Woodford has though recently launched an investment trust, Woodford Patient Capital Trust, but has a completely different investment strategy to his income fund