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Should I put 10K in a US equity tracker now?
Comments
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Investing on the basis of what market commentators are saying about world events is the worst kind of market timing IMHO.
I'm invested and not changing a thing, but perhaps I should have been clearer that I was suggesting the same for the OP.
If the OP was to buy now he or she would be breaking the No.1 rule (buy low sell high). Granted we can not predict the future of the market, and it could go up more from here. That's why I'm 85% invested but also holding 15% cash, to hedge my bets.
I don't see how it's "timing the market" working through the likelihoods and possible outcomes of a particular market/sector you are thinking of investing in. All I'm suggesting is that there is a significant possibility that US markets could correct, so it could be a wise move to wait, depending on what if anything the OP has invested right now.
IMHO this is not a bad time to be holding at least some cash.0 -
BrockStoker wrote: »
If the OP was to buy now he or she would be breaking the No.1 rule (buy low sell high).
Is it? I thought the number 1 rule was "its time in the market, not timing the market"
Granted we can not predict the future of the market, and it could go up more from here. That's why I'm 85% invested but also holding 15% cash, to hedge my bets.
I don't see how it's "timing the market" working through the likelihoods and possible outcomes of a particular market/sector you are thinking of investing in.
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That is precisely timing the market !
Not timing the market is, "I dont have much in USA so I'll invest my lump sum now"
Timing the market is, I dont have much in USA but its expensive now so I'll wait."0 -
what if EU crumbles to dust? where does the money from there go to? it will be the US stock market and USD.
If the EU "crumbled" that would likely send investors fleeing equities and into safe haven assets like gold and bonds. It would be fine with me since I plan to buy in the dips and hold long term.0 -
Time the market!Another night of thankfulness.0
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Holding some cash is not a problem - it's essential to hold some cash so that you don't become a forced seller of S&S. But there's no reason to think the OP's £10k that they intend to transfer from a cash ISA is all of the cash they have.BrockStoker wrote: »If the OP was to buy now he or she would be breaking the No.1 rule (buy low sell high). Granted we can not predict the future of the market, and it could go up more from here. That's why I'm 85% invested but also holding 15% cash, to hedge my bets.
I don't see how it's "timing the market" working through the likelihoods and possible outcomes of a particular market/sector you are thinking of investing in. All I'm suggesting is that there is a significant possibility that US markets could correct, so it could be a wise move to wait, depending on what if anything the OP has invested right now.
IMHO this is not a bad time to be holding at least some cash.
This is all very reminiscent of the thread I linked a few posts up where our old friend Ryan Futuristics was warning us all how expensive the US market looked and it would be sensible to invest elsewhere and wait until it was cheaper. He made those comments over 2 years ago in late 2014. Meanwhile the S&P 500 has risen over 60%.
Markets will tend to correct every few years. If you don't want to put money into the markets before a correction, you'll never invest. If you want to wait for a dip, how do you know a dip won't turn out to be a major crash? It's probably better only to invest right after a major crash, just to be on the safe side. How will you know when you're at the bottom of a major crash? Well, you should probably wait to see a significant recovery. But, if prices have risen again, there could be another correction coming...
Or, you could invest when you have money available and not worry about timing.0 -
maybe itll be a bit easier to invest when looking at the logarithmic scale (what you should actually look at).0
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BrockStoker wrote: »If the OP was to buy now he or she would be breaking the No.1 rule (buy low sell high).
that's not a useful rule without hindsight. selling because the market has been rising (or buying because it's been falling) isn't a good plan unless the market is about to start falling (or rising).
it's a bit like this will rogers quote:
if you're an active investor, rule no. 1 is: don't lose money. (and rule no. 2 is: see rule no. 1.)Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it.
if you're a passive investor, rule no. 1 is: nobody knows nothing.0 -
Warren buffet is optimistic on us long term, or so he says to his rivals anyway...This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
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Holding some cash is not a problem - it's essential to hold some cash so that you don't become a forced seller of S&S. But there's no reason to think the OP's £10k that they intend to transfer from a cash ISA is all of the cash they have.
There's also no reason to think it's NOT all the cash the OP has to hand to invest. I don't think it's unreasonable to point out to the OP that IF that is all the cash they are holding then it's probably not a good idea to spend it on US equities right now.This is all very reminiscent of the thread I linked a few posts up where our old friend Ryan Futuristics was warning us all how expensive the US market looked and it would be sensible to invest elsewhere and wait until it was cheaper. He made those comments over 2 years ago in late 2014. Meanwhile the S&P 500 has risen over 60%.
Who knows. Perhaps he invested in the dips in Aug/Nov 15, and is doing very well.Markets will tend to correct every few years. If you don't want to put money into the markets before a correction, you'll never invest.
Here's where you're apparently not understanding me. I am invested, and have never advocated sitting with huge piles of cash on the sidelines. Too often on here people think in terms of black and white, but there are plenty of shades of grey in between IMO.If you want to wait for a dip, how do you know a dip won't turn out to be a major crash?
You don't.It's probably better only to invest right after a major crash, just to be on the safe side.
I agree wholeheartedly, but wouldn't this also be timing the market, and how do you know, that what you assume to be the end of the crash, really is?How will you know when you're at the bottom of a major crash?
There's no need to call the bottom IMO, although it is nice if you can. The point is, you can look at a chart and see that things have fallen. If they have fallen enough to give you a discount from what they were before, it might well be time to consider buying. Edit: I'm not saying that's all you should be looking at, but it is a start.
You can be sure that at least you have not bought at the top of the market that way, and if you have a bit of luck by finding the bottom (or even close to it), then your portfolio gets a significant boost.Well, you should probably wait to see a significant recovery. But, if prices have risen again, there could be another correction coming...
Which is why you sometimes need to be patient, and not use all your cash at the first hint of a correction. I usually hold enough cash for at least 2 purchases of around 5% of my portfolio, but at the same time I wouldn't want to hold more than 15-20% cash at most.Or, you could invest when you have money available and not worry about timing.
We all take on some risk when we invest. I can see the reasoning behind not trying to second guess the market, however, there are occasions when it's pretty obvious that the market has over reacted in some way. The market is very "short-termist" in it's outlook, and as a long term investor, taking advantage of a short or even medium term movement in the markets makes sense IMO, as long as it's well thought out.
I don't see that there is much more risk in doing this the way I am doing it, with small (but still significant) chunks of cash, whilst remaining 80-90% invested. The effect on my portfolio is that money from my winners gets re-invested in another asset that is cheaply valued, and my portfolio has done comparatively well since I've been doing this.
I'm not saying putting all your cash in in one go at a random time (and not worrying about it) is necessarily a bad thing (or even randomized drip-feeding for that matter), but I actually think I worry less about my portfolio than if I did it that way. Which ever way the market goes I have options. If it goes up, then I'm making good money. If it goes down then I'm scooping up bargains that I hope will have a bright long term future.0 -
About fifty on this thread alone: https://forums.moneysavingexpert.com/discussion/5632480BrockStoker wrote: »Too often on here people think in terms of black and white, but there are plenty of shades of grey in between IMO.
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