Poll: Invest in equities now or wait

weenie15

I'm in the 2 camp, investing monthly regardless.

Glen_Clark

Newly_retired wrote: »

Am already retired but could live another 30 years. Not sure what to do.

I think there comes a point where its best just to buy an annuity. Some people will scoff at that because they think annuities are poor value for money and they could do better - even when they reach the age where they could lose their marbles.
But its not just about maximising returns is it? - peace of mind of a regular guaranteed income probably matters more.

moneyfoolish

Well, quite frankly, I'm at a loss at what to do with my money! I've just received an survey email from TSB which more or less tells me that they will soon be reducing their Classic account from 5% to 3% on £1500 down fom the current £2000. This follows the Santander cut and the Club Lloyds cut coming soon probably followed by Tesco and BOS! All my savings are in high interest current accounts, NS&I Index-Linked Certificates, NS&I Pensioner Bonds plus a couple of cash ISAs paying less than 2%. I'm 71 and hardly invested anything in equities since I was almost caught in the Technology crash (my fear caused me to sell everything at an early stage in the fall). My over 40 years in the IT business has allowed me to save what I thought was a huge amount of money (although a pittance compared to many on here). I have £250,000 in savings and a house worth around £400,000. My wife and myself have pensions paying between £35,000 and £40,000 after tax which should be enough for us to live comfortably. The problem I have is that of my 4 children (30 and 40 year olds) only 1 has a house and the other 3 have zero chance of every being ably to afford one and only 1 has any pension at all. I know that I don't have the temperament for investment but almost feel as though I will have to stick money into the market if I want it to at least provide some sort of chance for my children ever to be home owners.

Malthusian

Thrugelmir wrote: »

The FTSE could fall on a given day simply because a number of major weighted constituents in the index go ex-div on the same day.

Not sure I understand your point. If you were investing in the index on a price return basis, e.g. via a structured note which tracked the FTSE and it's understood that the issuer will pocket the dividends, this is potentially a valid concern. However, most of us who invest "in a market" will so via index funds. In these it doesn't matter if a large proportion of the market goes ex-div because the fund will receive its share of the dividends - and will in due course either reinvest them or pay them out to the investor. All that happens if several large constituents go ex-div is that a tiny percentage of the fund will temporarily change from shares to cash, but the value will remain exactly the same.

Thrugelmir

Get your children to open HTB ISAs and fund then for them. That'll give them a leg up the ladder.

moneyfoolish

Thrugelmir wrote: »

Get your children to open HTB ISAs and fund then for them. That'll give them a leg up the ladder.

I had thought about that but problems seem to be emerging from what I've read and the rates are also getting chopped severely.

Malthusian

moneyfoolish wrote: »

The problem I have is that of my 4 children (30 and 40 year olds) only 1 has a house and the other 3 have zero chance of every being ably to afford one and only 1 has any pension at all.

If the three of them are unable to afford a house despite their Dad having £250,000 in liquid savings (albeit I don't know how much of that you'd be willing to use to help them with a deposit) then quite frankly that's their issue and not yours or the banks'.

I know that I don't have the temperament for investment but almost feel as though I will have to stick money into the market if I want it to at least provide some sort of chance for my children ever to be home owners.

Traditional advice is that you shouldn't invest money in the stockmarket that you might want to use within 5 years' time. To be blunt, given the age of both you and your house-less children, I don't think you'd want to be in a position where if you were unlucky enough to invest just before a crash you might have to wait 5 years for values to recover in order to help them out with a deposit. Plus you might panic and cash out again.

Thrugelmir

moneyfoolish wrote: »

I had thought about that but problems seem to be emerging from what I've read and the rates are also getting chopped severely.

The added bonus is 25% though.

Thrugelmir

Malthusian wrote: »

Not sure I understand your point.

Very simple. Some people focus on the relativity of the index to decide whether to buy or sell. I am merely illustrating that the index could potential appear to fall dramatically on a given day if a number of factors were to occur concurrently. This could be read as a signal to sell.

I normally buy stocks ex div myself.

C_Mababejive

george4064 wrote: »

I sometimes consider doing this, but how long are you going to wait??

If the market carries on slowly rising you would've been better off re-investing the income automatically, you risk missing out on the snowballing effect by stockpiling the divi income...

I know,but then if you do continue to pump money in and run DRIPs when the market is perceived to be high,well then if it deeps significantly, you take a big haircut unless you have your stop losses set,,and then,,well,,what do you set your stop losses at !