Has the stock market peaked?

dunstonh

There is just one thing you know when it comes to investing. Your money will go down as well as up.

You do not know when ups and downs will occur.
You will not know the peaks and troughs.
You will not know the best place to invest in advance

Trying to time the market is futile. You won't know if a decline is a 5 day drop. Or 5 day drop followed by 6 months of part recovery before a second larger drop. Or a gradual 3 year decline before recovery.

Looking at a FTSE trend over 50 years the peaks and troughs are obvious.

Yes they are when they are in front of you and you are looking backwards. However, look at all those troughs and you will find different reasons for them occurring.

You may feel a crash is coming but is it coming next week or will markets rise another 30% before that 20% crash comes? Do you go back in the day it hits bottom or do you wait before it goes up 10% before going back in.

More often than not, those that stay invested beat those that think they have a crystal ball and can time it.

Maelwys

danlightbulb wrote: »

So it could already be correcting then, the FTSE100. Why wouldn't you move out of the FTSE and into the world markets that are in a different part of the cycle?

Because the world markets could do a China tomorrow and the local markets could still steadily rise for the next X months/years?

There's (usually) no way to predict whether the markets are going to go up or down tomorrow, and the FTSE100 is more volatile than a 2 year old with ADHD and an endless supply of Skittles.

danlightbulb

Right i see thanks.

Follow up question. Does anyone know of a place where i can post specific questions about my pension fund mix and about specific other funds i could choose to invest in? I anticipate that you may say this is IFA terratory, but i cant afford to pay for this so i need to figure it out for myself. Im not sure posting repeated questions here is the right place.

I have over 80 funds to choose from with my provider, all different asset mixes. So I'll want to know about diversification and what the right mix of things is, as well as being able to say that I want to target an average growth of circa 8% over the next 30 years.

Biggles

danlightbulb wrote: »

Are you all bulls?

Define 'bulls'. If you're looking at your pension pot in 30 years time, yes, you should either be a bull or be in something other than equities.

Looking at a FTSE trend over 50 years the peaks and troughs are obvious.

So is the longterm trend. It's upwards.

_CC_

People may have different views, but IMO if you're investing into a pension then the best approach would be to pretty much ignore what is happening in the market. Pay regular contributions into the major indexes and it's pretty certain you'll do well over the decades most people accumulate their pension pot.

What you're describing is quite active trading and trying to time the market. This may be your cup of tea, but it wouldn't be my strategy, unless my goal was lower returns, higher costs and anxiety!

danlightbulb

_CC_ wrote: »

What you're describing is quite active trading and trying to time the market. This may be your cup of tea, but it wouldn't be my strategy, unless my goal was lower returns, higher costs and anxiety!

Ah I see right. No, active trading is certainly not what I want to do. But I have calculated that I want 8% average growth over the next 30 years. My current funds aren't delivering that (5 year growth at 4.8%). So I need to figure out what mix of funds I need to use, long term, to get that average 8% growth (or least try). Where can I ask lots of questions around this topic?

_CC_

danlightbulb wrote: »

Ah I see right. No, active trading is certainly not what I want to do. But I have calculated that I want 8% average growth over the next 30 years. My current funds aren't delivering that (5 year growth at 4.8%). So I need to figure out what mix of funds I need to use, long term, to get that average 8% growth (or least try). Where can I ask lots of questions around this topic?

What are you currently invested in? Maybe people can give their thoughts on what they think is best...

Bare in mind returns are often sporadic in nature.

Personally I would just opt for low cost index trackers; their yeilds and keeping the cost down to a minimum will pay off over the long term.

Thrugelmir

At the weekend was chatting to a friend who works in a private hospital in Doha. Last week the hospital made 47 overseas people redundant including 15 consultants. One of the specialities most hit in this round was plastic surgery. The falling oil price is having a wider impact than investors may imagine.

In Doha there is no employment legislation. Redundancy is instanteous and without pay. People have moved their families out. The children go to school etc. They've bought expensive cars etc. Now they are left with nothing.

Throw a stone in a pond and watch the ripples.

Drp8713

danlightbulb wrote: »

Ah I see right. No, active trading is certainly not what I want to do. But I have calculated that I want 8% average growth over the next 30 years. My current funds aren't delivering that (5 year growth at 4.8%). So I need to figure out what mix of funds I need to use, long term, to get that average 8% growth (or least try). Where can I ask lots of questions around this topic?

If you are 100% equities then you (based on historic performance) will likely get 5-8% returns over the long term.

If you Google historic asset class returns you will see Monevator, Blackrock, Morningstar etc have all done studies.

You would likely need a strong tilt towards more risky small caps and emerging markets to improve your chances but from the look of this thread, are you going to be able to stomach 50% losses in bad years to get 8% long term?

JohnRo

I find it helps to get a better perspective when looking at inflation adjusted peaks and troughs.