Small Pot for First Investment

brasso

eskbanker wrote: »

I must admit that I don't have examples readily to hand but have previously read historical data quoted on here that highlight how the odds of positive returns improve substantially for successively longer periods, so there are many more 3 year periods showing losses than 7 year ones, for example. I didn't say that 10-15 years are required, just that if, hypothetically, someone invested with an intention to cash out in exactly 7 years, that could be immediately after a crash, so leaving it longer and with a broader redemption window improves the probability of achieving a gain that can be crystallised.

Woah! Woah! That was absolutely NOT my reading of the situation here, and would have significantly changed my response -- perhaps I misunderstood the original question. It's madness to invest for a specific event e.g. a wedding or property purchase where you are committed to cashing in your investment on a particular date, regardless of performance.

eskbanker wrote: »

But another of the golden rules of investment is that past performance isn't a reliable guide to future performance!

Yes, yes, and this is another 'golden rule' that I disagree with -- when someone is willing and able to continue investing regularly through lean spells, as the OP said they were, in which case, over a period, they should feel the benefit of dollar-cost averaging.

But look, it's not really worth arguing about this. If your goggles, or those of the OP, are fixed firmly on the fear of losing some of your capital, then I frankly wouldn't be investing at all. Find a safer home for your cash. It's the oldest cliche in the book -- even older than yours -- that the more safe your investment, the lower your return. When all is said and done, that's what this conversation comes down to.

I've done pretty well over 20 years or so NOT because I'm a skilful investor (I'm not) but because I only invest money that I can afford to lose. It affects my approach a lot. If £2,000 was a significant chunk of my savings (and there were times in my life when this represented a very big sum indeed), I would probably be too nervous to invest it. I'm the sort of investor who checks his portfolio every few weeks. If you check several times a week, or several times a day, as one of my work colleagues does, it may not be the right thing for you.

webjaved

brasso wrote: »

If you check several times a week, or several times a day, as one of my work colleagues does, it may not be the right thing for you.

I was like that at first, it's so unhealthy to do. I've learnt to not log in and check my account, only check it now to see if any payments etc have been cleared or not.

eskbanker

brasso wrote: »

eskbanker wrote: »

But another of the golden rules of investment is that past performance isn't a reliable guide to future performance!

Yes, yes, and this is another 'golden rule' that I disagree with -- when someone is willing and able to continue investing regularly through lean spells, as the OP said they were, in which case, over a period, they should feel the benefit of dollar-cost averaging.

You seem a bit confused here - dollar cost averaging is a perfectly sound concept and sensible practice rather than getting cold feet during dips, but is completely unrelated to blind reliance on past performance for planning the future.

brasso wrote: »

But look, it's not really worth arguing about this. If your goggles, or those of the OP, are fixed firmly on the fear of losing some of your capital, then I frankly wouldn't be investing at all. Find a safer home for your cash. It's the oldest cliche in the book -- even older than yours -- that the more safe your investment, the lower your return. When all is said and done, that's what this conversation comes down to.

I've done pretty well over 20 years or so NOT because I'm a skilful investor (I'm not) but because I only invest money that I can afford to lose. It affects my approach a lot. If £2,000 was a significant chunk of my savings (and there were times in my life when this represented a very big sum indeed), I would probably be too nervous to invest it. I'm the sort of investor who checks his portfolio every few weeks. If you check several times a week, or several times a day, as one of my work colleagues does, it may not be the right thing for you.

Again you seem somewhat confused here! I'm perfectly happy with my investment approach thanks, and have no idea how you've leapt to the above conclusions from comments that bear no relation to it. Maybe worth staying away from the powerful solvent-based cleaning products, eh?