Markets at record highs and euro / dollar both strong - does this impact your investment strategy?

Maidavale

I'm interested in how others are viewing the current investment climate - I will have 40,000 across two stocks and shares ISA's to invest in various funds in May.

I aim to diversify across markets and sectors however I am feeling reluctant to invest too much into the US and European markets on the basis they are both near or at 5 year record highs and the pound is currently so weak against both these currencies.

It would be a double whammy if the US/European markets dropped AND the pound strengthened vs the relevant currencies - both feel quite realistic prospects in the next year subject to brexit strategy resolution.

I know in the long term, on the basis I'm investing every year, it will be lost in the averages but am curious to know are others feeling reluctant to invest at the current levels? I feel myself gravitating towards investing more in the UK in the short term to remove some of the currency risk (although of course many of the earnings still come from overseas).

quirkydeptless

I invest mechanically, steadily, longtermilly.

I accept I have no ability to predict the future, so I make sure I take care of the things I can control (fees, tax relief), and try not to worry about the things I can't, which can at times be difficult, but the longer I keep not worrying about things I can't control, the easier it gets


So I stick with my strategy through the market highs of this year, the year before that, the year before that, the years when there are market lows, the years when the market piggy in the middles...

Keep_pedalling

quirkydeptless wrote: »

I invest mechanically, steadily, longtermilly.

..

Long term Milly, sounds like a nice girl :cool2:

AnotherJoe

To answer your question in detail
"No"

And to add to that detail, it's a fallacy to invest in the U.K. and think you are removing any of the currency risk by adding to Uk. Where do you think BP or BAT or Uniliever ( etc etc etc) get most of their income from?

quirkydeptless

Keep_pedalling wrote: »

Long term Milly, sounds like a nice girl :cool2:

She's the sister of Long Tall Sally

Voyager2002

Maidavale wrote: »

I aim to diversify across markets and sectors however I am feeling reluctant to invest too much into the US and European markets on the basis they are both near or at 5 year record highs and the pound is currently so weak against both these currencies.

It would be a double whammy if the US/European markets dropped AND the pound strengthened vs the relevant currencies - both feel quite realistic prospects in the next year subject to brexit strategy resolution.

Maybe now is a good time to invest in Russia.

And then there is the rest of the world: India and Vietnam look promising, and if you are brave you could consider China.

HappyHarry

Maidavale wrote: »

I am feeling reluctant to invest too much into the US and European markets on the basis they are both near or at 5 year record highs

But...

5 years ago, the S&P was also at a 5 year record high. Since then, it's gained around 120% (inc. dividends).

5 years ago, the FTSE100 was also at a 5 year record high. Since then, it's gained around 35% (inc. dividends)


You would have lost out if you didn't invest 5 years ago because you thought the markets were at a record high. What do you think is fundementally different this time.

This is a prime example of why trying to time the markets tends to be an excercise in futility.

westv

Every new high is a record high.

dealer_wins

Seeing as the FT100 was at virtually this level in 1999, it should have nearly doubled by now, yet its the same after 19 years!

ColdIron

You forgot didivends

badger09

ColdIron wrote: »

You forgot didivends

Not to mention dividends