Investing or waiting

atush

ian-d wrote: »

Really brief question, are you guys/gals currently investing in shares, funds, bonds etc, or are you waiting to see where the market goes? I know the saying "don't time the market" is very apt, but history would tell us that the markets are currently very high and due a substantial dip. If you had a large sum to invest right now, would you throw it all in safe in the knowledge it should be worth more in 20 years; throw in a little bit now and ride the average, or wait.

'



Like a normal, intelligent investor. I am investing, not waiting.

Dont try to time the market, that is a fools game.

economic

coastline wrote: »

A decent link about P/E's and not a bad video in full..

https://www.youtube.com/watch?v=896xQ5qvBlc&feature=youtu.be&t=19m13s

Earnings are forecast to rise after a flat period in 2014-16.
Maybe that's why the US markets have moved onto all time highs and not about Trump.?

https://www.yardeni.com/Pub/peacockfeval.pdf

https://ycharts.com/indicators/sandp_500_earnings_per_share_forward_estimate

yep exactly. people think PE high therefore price will fall so lets sell. well what happens if earnings rises? then you certainly wouldnt want to sell!

enthusiasticsaver

Still investing and if I had a large lump sum I would put a percentage into investments. We invested the maximum isa allowance for both DH and I in stocks and shares isas last month and my SIPP. The only rule we have is we do not invest anything we may need in the next 8 years.

economic

Amthinking to invest this years isa in one go. Probably in fundsmith.

jamesd

economic wrote: »

PE ratios dont tell you all the story about returns though, so what you say is completely irrelevant about expected returns.

It's entirely applicable and applies to all major equity markets.

economic wrote: »

if you have gorwing stocks PE becomes less relevant as earnings growth is fast and stock can have a lot more upside in it. the PE ratio can change not only through price but also through earnings - its simple maths.

It doesn't apply to individual stocks within a market but to the market as a whole. Buy trackers and it matters, buy selected individual shares and it's not applicable.

jamesd

economic wrote: »

yep exactly. people think PE high therefore price will fall so lets sell. well what happens if earnings rises? then you certainly wouldnt want to sell!

FTSE earnings rose because the pound fell. Doesn't say anything about the strength of the underlying businesses.

In some cases earnings in UK companies rose because they had paid for supplies in higher valued pounds and then could sell abroad at a lower value pound. That's a selling opportunity because it won't be happening every year - I hope! - but some mugs might ignore why the rise happened and implicitly assume large drops in the value of the pound in future years.

I know a nice container import business that bought containers at about £800 each. It's been able to sell them at up to £1500 each due to the drop in the pound and rise in steel price. It's not buying at the moment, the Chinese suppliers are an oligopoly and there's too much price risk. Anticipated profit next year from container importing and selling is zero even though last year was excellent.

I recently sold quite a bit of a global tracker and replaced that with a pound-hedged version to protect against pound rises while forgoing gains due to pound drops.

aldershot

According to the Stock Market Almanac, since 1986, the UK stock market has delivered an average return of 8.58 per cent a year during the winter months, but only 0.35 per cent over the summer. In fact, the record shows investors have actually lost money during the summer months in 15 out of 29 years.

...and made money in 14 out of 29 years!! Who knows whether this year will be up or down. Trying to guess that is the way to analysis paralysis.

JohnRo

A sensible long term investment portfolio will have limited exposure to the UK stock market as well as limited exposure to other stock markets around the globe. It will also limit exposure to equities generally by holding other asset classes.

economic

JohnRo wrote: »

A sensible long term investment portfolio will have limited exposure to the UK stock market as well as limited exposure to other stock markets around the globe. It will also limit exposure to equities generally by holding other asset classes.

so u are saying be compeltely diversified?

JohnRo

economic wrote: »

so u are saying be compeltely diversified?

I'm not sure what completely diversified means but in terms of an individual's total assets I personally think investing in a wide range of different assets is the only sensible option.