Stick with Index funds?

canaryjim

My SIPP portfolio is mostly index tracker funds which have been doing fine, but as of late have been suffering. The markets I’m invested in (FTSE & S&P mostly) look like they have been as high as they are going to go unless they spend the next ten years breaking records.

Is it still wise to keen ploughing into these funds?

I’m mindful that if I had invested in one of these in say FTSE 100 in 1999 save for dividends and interest it would not have grown a great deal. I wonder whether the market position today is a bit similar to how it was then?

I’d be interested to know what you guys would do. I’m minded to stick with the philosophy and just keep drip feeding and hope that things are better when I retire in 15-20 years..

ermine

canaryjim wrote: »

I’m minded to stick with the philosophy and just keep drip feeding and hope that things are better when I retire in 15-20 years..

Hope for the biggest humdinger of a stock market crash. And keep on buying - indeed ramp up if you can bear it, but don't stop whatever you do. Whaddya do when Tesco offers you beans at 20% off? You stock up. What makes stocks any different

This is not the dotcom bust again. And you have grexit and all sorts of other stuff hopefully working for you soon. It'll be lost in the noise 20 years from now - remember that when you look at a chart of the FTSE100 15 years back you're not seeing the dividend payments of typically 3% a year

atush

I wouldn't sell your funds, but youc ould consider putting new money someplace that has had poor performance recently (therefore buying 'low') and switch back to investing as you are now should there be a crash?

Mainly I say this as you are not well diversified as you are in the US/UK only, and really you need to invest globally to diversify. Europe, Asia, emerging markets etc.

But in general, not a great idea to try and 'time the market'.

Chickereeeee

canaryjim wrote: »

The markets I’m invested in (FTSE & S&P mostly) look like they have been as high as they are going to go unless they spend the next ten years breaking records.

As the indexes only really reflect the value of the underlying companies, it would be expected that 'records' would continue to be broken. Even with just todays inflation, and no change in performance, the companies value would be increasing 1% or so per year....

dunstonh

My SIPP portfolio is mostly index tracker funds which have been doing fine, but as of late have been suffering.

How are they suffering? You should only be experiencing a minor drop in value as the recent fall is not even correction territory let alone crash.

The markets I’m invested in (FTSE & S&P mostly) look like they have been as high as they are going to go unless they spend the next ten years breaking records.

It sounds like you have poor diversification and investing above your risk profile and ability to understand. Lack of knowledge is not a bad thing as you cant know everything but investing in a way that requires knowledge and worrying over markets does indicate problems.

Is it still wise to keen ploughing into these funds?

You havent said what they funds are. The little you have said indicates a poor asset allocation.

However, in respect of monthly payments during a period of volatility, then this is good news for you and not bad news.

I’m mindful that if I had invested in one of these in say FTSE 100 in 1999 save for dividends and interest it would not have grown a great deal.

What interest?
Do you have figures or are you making assumptions?

I wonder whether the market position today is a bit similar to how it was then?

there is no similarity in the market events.

I do suggest you review your investments as how you explain them does indicate poor quality investing. I also suggest you consider your risk profile as you appear to be concerned about the markets. However, market crashes occur every 5-7 years with corrections in between. You are likely to see many more before you retire. If you cant handle them then it indicates you are investing above your risk profile

Finally, you may want to change your investing style. if you are using single sector funds, as you indicate, but not building a proper asset allocation and dont plan to do so then you should move to multi-asset funds instead.

atush

Easy asset allocation/diversification can be via Global trackers, and lifestyle funds (and these can hold other assets besides equities).

At the moment you are very poorly diversified.

Malthusian

I’m mindful that if I had invested in one of these in say FTSE 100 in 1999 save for dividends and interest it would not have grown a great deal.

A bit like saying that save for egg batter and icing a carrot cake just tastes of carrots. Why would you ignore dividends and interest? It's a major part of the point of investing in the first place.

Dunstonh has said everything that needs to be said, if you are saving monthly and have a 15-20 year time horizon, market falls are a good thing for you at the moment, not a bad thing. (Assuming proper diversification etc etc.)