Am I making a mistake by delaying investing?

AddictedSaver

Thrugelmir wrote: »

On what assumption? Until Brexit no one cared about trade deals or tariffs etc. Yet they have always been part of daily life. If it concerns you learn about the topic fully. Don't get sucked into the media frenzy. Where lazy journalism rules.

Just gut instinct like I said, it's probably due to me being uneducated about the markets and economics that isn't helping me with me thoughts.

Pincher

Let us say the FTSE was yielding 4% at 6,000,
and 3% at 7,000 . All these low interest refugees who have been traumatised by sub-1% interest, with the expectation of further atrocities, will say 2% yield at FTSE = 8,000 is better than 0.1%.

Obviously the natural instinct is to build a wall, and refuse to let these economic migrants buy our juicy shares, but that is impossible to do. We can't stop them from paying ridiculous prices for shares, through tracker funds, and bringing down the yield. The only thing you can do, is to buy the shares earlier, and lock in the 3% yield before it's too late.

I bought some HSBC shares at £4.25 , so the 38p dividend is 8.9% yield.

Now that the shares have risen to £5.80, the yield is 6.5%.

If they drive the price up to £10, the yield will be 3.8%.

I'm not selling. Over my dead body.
Well, maybe for £20 a shares.

AnotherJoe

AddictedSaver wrote: »

Glad to hear you've recouped the money. I need to just pluck up the courage but the whole brexit thing is scaring me. I just have no idea whatsoever about how it will play out. All I know is we're going to have to negotiate trade deals and these deals are highly unlikely to be as good as the ones we currently have.

I'll say it again, why would you be investing in such a high proportion of shares of UK companies that Brexit would be a concern, even if you thought it was a downside (did you see the recent manufacturing figures due to lower pound due to, err, Brexit)?

You are presumably aware that there are companies outside the UK so why would you not invest across the world? What about US companies? Canadian? Asian? European? The UK is (IIRC) about 8% of the world economy. For a starter in this, your investments should reflect that fact, which could be done in one investment that was global. You could even go the whole hog, trust your "gut" and buy a fund that invested globally except in UK companies.

Pincher

AnotherJoe wrote: »

so why would you not invest across the world?

Before sterling dropped ~15%, putting money in non-sterling asset would have been a stroke of genius. Locking the barn door after the horse has bolted is more dubious. If sterling recovers, when things settle down, you will have lost 10~15% for nothing.

I popped over to Japan to take advantage of the GBP1:JPY186 last year, using my Halifax Clarity card, of course. Now it's their turn to pick up bargains here.

Right now, it's a buying opportunity for foreigners to pick over sterling denominated assets. We had our turn buying cheap in France and Spain before, so fair dos.

Buy them while they're down, or is it kick them while they're down?

AnotherJoe

Pincher wrote: »

Before sterling dropped ~15%, putting money in non-sterling asset would have been a stroke of genius. Locking the barn door after the horse has bolted is more dubious. If sterling recovers, when things settle down, you will have lost 10~15% for nothing

Rubbish. Either that, or I'm a genius because I'm invested globally.

Investing all your money in the FSTE100 is wildly risky for numerous reasons including that you are invested in just 8% of the worlds economy, that you are crazily biased towards energy & commodities, and overall it's got a very poor record compared to the global stock market (because of these factors amongst others ) .

Investing in the FTSe all share would only mildly mitigate that, essentially you are missing out on a huge percentage of the worlds best companies by only investing in the UK. Long term currency movements mean that if sterling appreciates then the economy is doing well so you'll do well anyway, and if the economy does badly well then other economies / currencies will likely do better and you'd have been a fool not to have had some of your investments there for the inevitable occasions when this would happen.

The pound has fallen / risen far more than ten 10% or so it fell in a day after Brexit vote, just on a slightly longer scale and focussing on one particular event and thinking you could have called that, or now thinking you'll call it in reverse, is foolish. Indeed if Brexit turns out to be an unholy mess, that 10% fall will be chicken feed. Will it then be "genius" to have investments outside the UK?

Pincher

AnotherJoe wrote: »

The pound has fallen / risen far more than ten 10% or so it fell in a day after Brexit vote, just on a slightly longer scale and focussing on one particular event and thinking you could have called that, or now thinking you'll call it in reverse, is foolish. Indeed if Brexit turns out to be an unholy mess, that 10% fall will be chicken feed. Will it then be "genius" to have investments outside the UK?

At GBP1:JPY186, a trip to Japan was no brainer, not going when it's 1:130, is also a no brainer. You just have to have some common sense. Lots of people who go on holiday can make that choice, quite logically and sensibly.

Advocate drip feeding by all means, but it is not a good time to buy non-sterling.

enthusiasticsaver

Invest globally in a fund. There is always something going on in the world and BRexit is relatively small event in the rest of the world. I would not recommend putting bulk in UK though. Invest monthly to spread risk.

System

Your age and time horizon is going to be a factor. If you have time on your side then looking short-term will probably cost you more long-term.

The FTSE gained over 2% yesterday - more than most bank accounts will earn you in interest in a year. It could just as easily have fallen dramatically. Volatility is the reason investors expect greater long-term gains from shares.

It is often quoted but worth stating: it is not timing the market that matters, but time in the market.

Will you regret it if shares fall soon after you buy? Probably yes if you are always chasing the bottom of the market, but no if you are investing for the long-term.

I think it was Buffet who pointed out the disconnect that most people have on share prices – a disconnect which he doesn't have and has therefore helped make him a fortune. He points out that if you buy something regularly and next week the price fell by half, you'd go and grab more delighted at the new lower cost. Do the same with shares. Drip feed your investment over several months, regular amounts, over time you'll catch some dips, but the important thing is you will be invested.

It is not how you feel tomorrow or next week or month, or even next year that matters. If you are really in for the long haul, determined to buy and hold (or just rebalance if you are going to hold a balanced portfolio) you are very, very unlikely to regret your decision in 10 or 20 years time.

A balanced portfolio can also help to soften the lows and can also increase long-term returns. If you haven't already done so head over to the Monevator website where you will find a wealth of sound advice and easy to digest information.

DonaldLMcVay

It can be very costly. Check this article by investopedia http://www.investopedia.com/articles/retirement/04/122104.asp

Marine_life

AddictedSaver wrote: »

I've never really had to make huge decisions based on instinct before.

So why would you do so in this case?

Do some research.
Get some professional advice.