stockmarkets -are we nearing the bottom or is there further to go ??

BananaRepublic

frugal90 wrote: »

Is there much further to go or are we reaching a good point to buy into the market??

I've recently put about £40,000 into the market, ISA and pension funds. Tell me in a few years time if this was a good move. We might not be at the low, but my instinct is that we are not far off, and 5 years hence this will be ancient history.

bowlhead99

BananaRepublic wrote: »

bowlhead99: you and a few others are having a good old barney, but do any of you practice what you preach? Is your investing record respectable, or is this academic squabbling over details for details sake?

I guess while you are expending huge energy into squabbling, others are researching, or planning how to spend their 'ill gotten' gains.

It's respectable, and I practice much of what I preach, but in reality some of what I preach is formed from evaluating some of what I have done versus what I should have done if I had put more (or in some cases, less) effort into it. Hindsight is 20:20 as they say, and in some cases it can feel more like 20:10. The good thing is, it's generally easier (even if more expensive) to learn from mistakes you made than from the mistakes which others made and transposed into boring theory for you.

So, like most of us I expect, I've made some practical mistakes which have helped inform views on what I or others could or should do with given options. But some decent commercial experiences too and have worked within the investment sector for long enough to understand it in a less superficial way than some.

I have some gains which are embarrassingly ill-gotten and some others which were hard fought but came good in the end. I would generally think I do better than "the average", though perhaps that is like the 75% of drivers who think they are better than the average idiot on the roads or the 90% of people who don't know a real statistic from one that has been made up on the spot.

By better than average I don't necessarily mean a better total return than what another person got - but perhaps a better return for the risk I perceive I've taken, or perhaps a result closer to what I was aiming for than a peer who went a different route.

Squabbling is half the fun of it though, if you have a genuine interest, because I'm not a day trader and the actual management of what i have doesn't need daily scrutiny. Sometimes I post a lot less than other times because the real world is calling for the gains to be spent and the well earned downtime to be indulged.

racing_blue

I like you Bowlhead and I like your posts. You are intelligent and you have a warm heart.

Whether one should expect such prowess to bear fruit, I cannot decide.

bowlhead99

If history has taught us anything, it's that being intelligent and well meaning does not always lead to riches or victory. But thanks, I think

Procrastinater

bowlhead99 wrote: »

............By that logic then sure, after accidentally investing your entire net worth into the FTSE 100 index on the very highest day in history prior to the dot-com crash, it takes 8 years to recover that point. However, the companies in the index were paying an annual dividend yield comfortably in excess of 3%. Which if -as you suggested- you were holding a fund designed to track the index's total return, would have been reinvested in the index constituents at the time the dividends were received.

So as I said, on my graph of the FTSE 100, the losses are recovered by early 2006 and have largely been in positive territory during the decade since. In your graph for some reason you are pretending the dividends generated just went into the shredder rather than being spent or reinvested.

So your conclusion that I am still 20% down from 2000 is somewhat disingenuous : in fact, I have received 15 years of 3%+ dividends, equating to probably 50%, and most of those dividends have been re invested when the capital value of the FTSE is significantly lower than its all-time peak, generating bodacious gains..................

"Accidental " ? - Not at all - that is the exact time when the media are at extremes of optimism and everybody "wants a piece of the action" The reason that is the exact peak is because after that there's nobody left with any money to buy shares and those with any knowledge have already sold, or are in the process of doing so !

However, if you do have any knowledge rather than just a penchant for rather impressive rhetoric, you would already know that !

You say that a (your Estimate) 50% gain (gross) over 16 years is something to be savoured !

Whilst you take into account a rather dubious estimate of dividends, you do not appear to take into account fees or indeed taxation.

Ok accepting in theory what you say and putting it into place on my £200k we have now made £100k over 16 years? or was that calculated to the last peak ? Against which we have ( my quoteation from the IFA) £4k + 15 @ 2k - so £34 to deduct and assuming you're a standard tax payer, tax on the difference of c 20% say £13k leaving around £50K or an optimistic 25%.

Again assuming you did not need any of the money for anything else AND that you held your nerve (stupidity) and watched 40% of the value of your "Investment" disappear over a year or so !

Can you put an already extant investment into an ISA to limit that ? I don't know !

but £50k on £ 200k over 16 years with much of that time watching your value descend to parity and for the first 6-8 years be well below - sounds like a junk "investment" to me !

That is why the "drip feed" advocates sound convincing on a down time. They are really not. Wait for a decent bottom and then buy the index - IF it goes to 4000, My £200k will be in there like a shot - IF it turns around above 5000 as the other guy reckons - I'll miss the turn and keep looking for a decent investment elsewhere !

In 2000 (or preferably a few years earlier), you should have been in completely different Investments and to that extent masonic's input is very level in his later post.

However in response the OP - It may be a "Good time" certinly better than a year and a half ago - But I'm not "going for it" yet. There's a lot of downside risk - irrespective of some saying that "they wouldn't listen" to anything they don't want to hear ! :rotfl:

masonic

Procrastinater wrote: »

That is why the "drip feed" advocates sound convincing on a down time. They are really not. Wait for a decent bottom and then buy the index - IF it goes to 4000, My £200k will be in there like a shot - IF it turns around above 5000 as the other guy reckons - I'll miss the turn and keep looking for a decent investment elsewhere !

Well please do tell those of us naive enough to think that you can't time the market when we have reached "a decent bottom" and you have deployed your £200k, if only so that you get the bragging rights. So many market timers forget to do this.

Glen_Clark

Procrastinater wrote: »

There's a lot of downside risk

There is always a lot of downside (and upside) risk.
So how do you know when to follow the Bears, (or the Bulls)?

BananaRepublic

Procrastinater wrote: »

You say that a (your Estimate) 50% gain (gross) over 16 years is something to be savoured !

I don't want to sound rude, but that does seem poor. Of my funds that I have owned for up to 20 years, one has grown over 500% (£6,000 to £40,000), most others grew by 200% (worth over 300% of their initial value), and even some trackers I bought during the crash have doubled, minus the recent 10% drops. The markets may not have gone up much, but dividends are an important contribution to growth. And active funds can focus on sectors that are growing and avoid sectors that shrink such as banks during a crisis. I have tended to pile in when the chaps in red braces (and whatever the women wear) are cacking themselves. I did have a pension fund from Standard Life that had grown 50% in 15 years, goodness knows why I did not transfer it. A classic case of a fancy marketing department selling a mediocre pension scheme to big companies for their staff scheme.

BananaRepublic

masonic wrote: »

Well please do tell those of us naive enough to think that you can't time the market when we have reached "a decent bottom" and you have deployed your £200k, if only so that you get the bragging rights. So many market timers forget to do this.

In general you cannot time the market. Your £200,000 devalues while sitting in the bank waiting for the markets to crash. During that time, investing in a decent active fund could increase the value by much more than the loses during the crash. That is why it is advisable to drip feed. Prior to the last crash, for years people were saying to avoid the markets, while others made good money.

That said I have often piled in during crashes, and made a little killing, such as during the last crash. But much of the money I put on recently might have been better invested earlier, though that money is savings over 2-3 years, and I was debating moving house, and might have needed it for fees and house improvements. So in reality I was lucky to have free cash available when the recent crash occurred. My other investments are squealing, but that is investing for you.

BananaRepublic

bowlhead99 wrote: »

I have some gains which are embarrassingly ill-gotten and some others which were hard fought but came good in the end. I would generally think I do better than "the average", though perhaps that is like the 75% of drivers who think they are better than the average idiot on the roads or the 90% of people who don't know a real statistic from one that has been made up on the spot.

By better than average I don't necessarily mean a better total return than what another person got - but perhaps a better return for the risk I perceive I've taken, or perhaps a result closer to what I was aiming for than a peer who went a different route.

Squabbling is half the fun of it though, if you have a genuine interest, because I'm not a day trader and the actual management of what i have doesn't need daily scrutiny. Sometimes I post a lot less than other times because the real world is calling for the gains to be spent and the well earned downtime to be indulged.

Glad to hear you make a worthwhile return. When you say "By better than average I don't necessarily mean a better total return than what another person got - but perhaps a better return for the risk I perceive I've taken" what would an example be? Sounds like you enjoy taking risks, and gaining from them. I'm Mr Dull when it comes to investment.