Am I making a mistake by delaying investing?

darkidoe

EdGasket wrote: »

But taking an immediate 30% hit on your investments can't be the best way to maximise returns short or long-term.

Here are some ways of measuring whether FTSE is expensive or not:

http://www.telegraph.co.uk/business/2016/04/24/uk-stock-market-overvalued-on-buffetts-favourite-measure/

It was from April 2016 but concludes overall that the market is looking expensive; even more so now I'd say with Brexit still to be worked out.

For an accumulator, a 30% drop in the market is a dream come true! It should be advertised as the greatest sale of the century!! Ownership of good decent businesses that pretty much are the same businesses before and after the fall in value for less money. Stick to the plan, diversify and dripfeed.

weenie15

fairleads wrote: »

I don't think so.

You won't know it's a mistake because if you're not investing, you won't know if your investments will go up or down - nobody does.

AddictedSaver

I am not only looking at the UK, I am also looking overseas into some American funds, Fundsmith was something I was looking at but again it seems incredibly high.

Everyone knows buy low and sell high but where is the logic in buying when the price is at it's peak? As I said I am going to invest for 20+ years but I'm just scared to invest when the market is sky high.

Could someone recommend some global funds like vanguard LS?

darkidoe

AddictedSaver wrote: »

I am not only looking at the UK, I am also looking overseas into some American funds, Fundsmith was something I was looking at but again it seems incredibly high.

Everyone knows buy low and sell high but where is the logic in buying when the price is at it's peak? As I said I am going to invest for 20+ years but I'm just scared to invest when the market is sky high.

Could someone recommend some global funds like vanguard LS?

How do you know it's at its peak??? The way I see it, with all the QE and interest rates cuts, there's more upwards trends than downwards at present.

Check this out for some simple knowledge markets: How the economic machine works

The moment you look too closely at the price, you will risk trying to bet on whether it is high or low. Know this, the next crash is always round the corner. You may try to wait till it happens but when it happens, you will be caught up by the media frenzy and falls in prices, you will be fearing that it is the wrong time to invest.

Fears can be managed with good financial planning, cash buffers, diversification etc. If you are able to stomach the volatility, go for it. Admittedly it is difficult to tell whether you are up for this psychological test until you are in the market yourself.

AddictedSaver

darkidoe wrote: »

How do you know it's at its peak???

I don't know that it's at it's peak but the last two times it was this high is came crumbling down, first the dot com bubble and then the 2008 crash. Now I've got it sown into my mind that brexit will be the next one.



The US is sky high at the moment too



Now I know it will go up more in the future, the world just doesn't lose money over the long term, economic growth will always be more, unless there is a world war or something. Interest rates are super low at the moment too which is causes more people to buy into the markets, once the economy becomes a bit more stable, interests rates will go back up which will cause the markets to go down.

Perhaps I'm just letting my inexperience get the better of me. I'll hunt around for a well diverse global fund, a fund of funds preferably... I really like the Vanguard LS funds but what are some similar funds but that are not exclusive to the UK?

darkidoe

L&G and Blackrock also does multiasset funds.

AnotherJoe

Perhaps I'm just letting my inexperience get the better of me. I'll hunt around for a well diverse global fund, a fund of funds preferably... I really like the Vanguard LS funds but what are some similar funds but that are not exclusive to the UK?

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Vanguard isn't exclusive to the UK.

AddictedSaver

AnotherJoe wrote: »

Perhaps I'm just letting my inexperience get the better of me. I'll hunt around for a well diverse global fund, a fund of funds preferably... I really like the Vanguard LS funds but what are some similar funds but that are not exclusive to the UK?

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Vanguard isn't exclusive to the UK.

And this just goes to show how little information I know. Thanks for mentioning that, perhaps I'll just take the plunge, no time like the present.

Eco_Miser

darkidoe wrote: »

For an accumulator, a 30% drop in the market is a dream come true! It should be advertised as the greatest sale of the century!! Ownership of good decent businesses that pretty much are the same businesses before and after the fall in value for less money. Stick to the plan, diversify and dripfeed.

Not much cheer for someone who has just put their life-savings into the market before the drop though.
Buying just before a sale is always annoying - those who waited get a bargain you didn't, but if you wait the sale may never happen.

masonic

fairleads wrote: »

Its quite simple, all the examples i have seen aren't representative of real life situations because the example is married to one investment - a market index.

Well it seems you are making a false premise of your own then, because many people do invest in market indices through index trackers, and many funds are closet trackers. Even one or two traders who post here can be found musing about their ukx trading results. So research papers that use market index returns will be attributable to real life situations.

But there are plenty of studies that have shown investors who try to time the market suffer a worse outcome than those that remain invested using real data from investment funds. For example, this study, originally published in the Journal of Banking and Finance, and the popular QAIB report from Dalbar. Not to forget reports of Fidelity's study in which they apparently found that their most successful investors were the ones who forgot they had an account. You may object that these studies are focused on the USA and not relevant to you, but most people should have a fair chunk of their portfolio allocated towards the world's largest market and I'm sure you could find equivalent UK-centric studies if you looked hard enough.

Anecdotal evidence from this very forum would suggest a whole series of seemingly knowledgeable posters have got their market timing wrong, with people declaring markets overvalued as early as 2013, some of whom used quite well regarded valuation metrics and data, such as CAPE, to support their position. However, even armed with such an analysis, your powers of prediction are only very modest. I'll refrain from commenting on the virtues of timing your trades based on technical indicators.