Is it insane to invest in the stock market now?

CreditCardChris

I'm 30 years old and have never invested in the stock market, mostly because I was young and not looking ahead to the future. However now it's finally hit me that if I don't start preparing for the future I'm going to be royally f'ed.

With the price of housing becoming almost unobtainable for the majority of people, savings accounts barely breaking inflation and wages lagging, I really need to start trying to make my money work for me.

However I take one look at the stock market (S&P) for example and I instantly think "not a chance I'm buying into that parabolic bull run". Then of course it just continues going up, month after month.

So that brings me to today, I just got a new job that allows me to invest about £500 a month which I'm going to setup to come out automatically, but I don't want to be one of the laggards, buying at the absolute top (and all the way down) that requires 10+ years just to break even again.

I'm not scared of losing my money because I know the stock market will always recover, I'm scared of not being able to make a profit. That would be the nail in the coffin wouldn't it? I put off investing during the biggest bull run since the dotcom bubble and then when I finally do decide to invest, I end up with absolutely pathetic returns like 20% after 20 years.

Obviously I'm not trying to buy the bottom, I don't expect to be that lucky, but buying now at literally the all time highs just seems like a terrible decision :eek:

masonic

Stockmarkets are often at all time highs.

Alistair31

I’m 29 and investing £1500 per month at present, when things go south I’ll be holding tight, safe in the knowledge that reinvested dividends will be buying more units.

If nothing else, we have time on our side

CreditCardChris

Alistair31 wrote: »

I’m 29 and investing £1500 per month at present, when things go south I’ll be holding tight, safe in the knowledge that reinvested dividends will be buying more units.

If nothing else, we have time on our side

Sure, like I said I'm not afraid of losing my money because I know it's virtually guaranteed that the stock market will recover, if they can recover after 1929, WW2, 2008 crash then they'll recover again, unless there's a nuclear war or some crazy natural disaster but then life probably won't be worth living anyway.

I just feel like the guy who's walked into the shop and missed the black friday sales and now has to pay the "normal" price, if that makes sense. I feel like I'm paying a premium other what others have paid and then to make matter worse, the black friday sale comes back 6 months after I've started buying...

Alistair31

https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Or, perhaps you just don’t have the mentality for investing, many people don’t. And that’s ok.

[Deleted User]

As soon as you are eligible, put £500 a month into your company sharesave scheme.

You will get a discount, your capital is not at risk and, at the end of its term, you will have the luxury of hindsight.

CreditCardChris

Alistair31 wrote: »

https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Or, perhaps you just don’t have the mentality for investing, many people don’t. And that’s ok.

That was actually a pretty insightful post. I guess there's no time like the present, and I will be dollar cost averaging so at least I'll be doing one better than bob :cool:

jamei305

If you invest 500 a month on a long term basis then the sooner and more severe the next stock market crash, the better position you’ll be in. You’ll be buying plenty of units when the price is low and hold them until they’ve made big gains.

You speak as if you’re thinking of investing a lump sum at the current time and no more thereafter, which is what people usually have qualms about, but if you’re investing monthly you have no such worries.

PuzzledDave

I get the nerves - but this you eyes seem set on the near future and not the long term.

Say you do buy today and tomorrow is the crash to end all crashes. The important thing to note is.... it may not matter at all. You are right the stockmarket has historically always recovered - so it only matters when you sell out.

Have you chosen when this will be ? This is the vital question I don't think you have a good grip on. I am assuming you are not intending to take the shares to your grave... so when do you plan to sell ?

[Deleted User]

You have to accept a certain level of risk when investing in the stock market as you may not get back what you invested. You should seek advice as to the level of risk which you are able to live with and invest accordingly. If you cannot tolerate any level of risk that your capital value may fall, even if only in the short-term, then stock investing is not for you.

Instead of thinking of timing the market (impossible even for "experts"), think time in the market. You have the advantage of youth, so you should be able to start relatively small with a long time horizon, building up as you go on.

The feeling of insecurity that you are investing at the top of the market is very common, if not universal. Nobody would ever invest at all if this feeling is allowed to dominate.

kinger101

ZingPowZing wrote: »

As soon as you are eligible, put £500 a month into your company sharesave scheme.

Why do you keep parroting this advice.

(a) the vast majority of people do not have a sharesave scheme for which they are eligible.
(b) the merits of the scheme would depend on the details of the individual scheme.