Investment Timing.....

scoot65

Alice_Holt wrote: »

.....But generally, if you have a sensible 10 years plus time-frame I'd be inclined to get it invested asap and not be too concerned about short term price movements.

That's exactly what I've done. I threw in the full £20k in one go. I'm looking at the long term and won't need the money anytime soon.

Thanks for all the replies!

Alexland

scoot65 wrote: »

I threw in the full £20k in one go.

Argh, terrible decision, you really shouldn't have done that!... only joking :-)

With investing the first few years are the worst as the valuations go up and down and you see periods of loss. Once you break through that and the volatility is all above the profit line it gets easier and you just hope it never crashes badly and drops below the profit line again. However even then there are things you can do to profit from a downturn (increasing contributions or risk)

I'm experiencing it all over again on the Junior ISA for our little baby which is already in net loss.

Alex

fiisch

Alexland wrote: »

I'm experiencing it all over again on the Junior ISA for our little baby which is already in net loss.

Alex

Same boat for our two and a half year old... Hopefully I can time our next child better with a market upturn. :rotfl:

Audaxer

OldMusicGuy wrote: »

I moved a large sum from cash into the HSBC Balanced fund in Feb 2018, 2 days before a 10% downward correction. That felt a bit bad. I just checked - it's up 8.33% since the initial investment.

Yes, as at the end of last month my VLS funds, invested in 2017, and HSBC GS Balanced fund, invested in January 2018, have done very recently with all the gains being in the last 7 months. Hopefully we're not on the verge of another correction or worse where we will see these gains quickly disappear.

PingPongSet

OldMusicGuy wrote: »

I moved a large sum from cash into the HSBC Balanced fund in Feb 2018, 2 days before a 10% downward correction. That felt a bit bad. I just checked - it's up 8.33% since the initial investment.

It's time in the market.

Do you meant after your initial investment, it was 10% down in 2018, and now it is 9% up?

PingPongSet

Alice_Holt wrote: »

One advantage is that had you done this at the start of the tax year, you would already have 5/12's of that £20k invested.

Which bank offers 5/12's interest rate for 20K saving? five twelfth ?

mollycat

PingPongSet wrote: »

Which bank offers 5/12's interest rate for 20K saving? five twelfth ?

I may have misread the thread but I don't think anyone is talking "banks" or "interest rates" here.

My take is that Alice means the OP could have already made 5 payments out of 12 had the choice been to drip feed, (as an alternative to sitting on the cash or investing all in one go).

If your post is some sort of "in" joke that has "whooshed" over my head apologies.

Alexland

fiisch wrote: »

Same boat for our two and a half year old... Hopefully I can time our next child better with a market upturn. :rotfl:

Our little one is back in profit today so I can stop trying to sell his organs on ebay!

OldMusicGuy

PingPongSet wrote: »

Do you meant after your initial investment, it was 10% down in 2018, and now it is 9% up?

No, I meant there was a downward market correction by 10%, the figure that was widely quoted in the press as being the overall number that major indices had fallen by. My investment did not go down by 10% because it was not all equities, although I can't remember exactly what it fell by.

The point being that moving a six-figure sum from no risk (cash) to a higher risk investment class 2 days before a fairly significant market correction is a bad example of market timing. But of course, it just shows that no-one can predict exactly when these market corrections/crashes will occur.

The other point being that since I made the investment, overall it is up 8.33% so my loss was recovered and the investment has performed well since 2018, despite many predictions of doom and gloom.

So this experience was helpful for me because it shows trying to time the market is a waste of time and that time in the market is what really counts.

Audaxer

OldMusicGuy wrote: »

No, I meant there was a downward market correction by 10%, the figure that was widely quoted in the press as being the overall number that major indices had fallen by. My investment did not go down by 10% because it was not all equities, although I can't remember exactly what it fell by.

The point being that moving a six-figure sum from no risk (cash) to a higher risk investment class 2 days before a fairly significant market correction is a bad example of market timing. But of course, it just shows that no-one can predict exactly when these market corrections/crashes will occur.

The other point being that since I made the investment, overall it is up 8.33% so my loss was recovered and the investment has performed well since 2018, despite many predictions of doom and gloom.

So this experience was helpful for me because it shows trying to time the market is a waste of time and that time in the market is what really counts.

Just checked back on the exact figures of my HSBC GS Balanced investment. Purchased on 11 Jan 2108 and by 9 Feb 2018 after the correction it was down 5.71%. By the end of Sep 2018 it was up 1.44%, but by the end of Dec 2018 it was down 5.75%. This year it has really picked up and at the end of Jul 2019 it was up 8.55% on the original investment.

So I agree time in the market is important. The difficult decision where I think timing does come in to it, is when to drawdown. If you needed to drawdown by selling capital once a year, clearly at the end of last year wasn't a good time to sell. However if you used a cash buffer and waited until the end of this year the markets could take a further tumble and lose this year's gains. So for those relying on income from total return, I'm still not sure how they decide when is the best time to sell?