Should I get into investing now? (Complete newbie)

Thrugelmir

kiwi_fruit said:

Thrugelmir said:

kiwi_fruit said:

Thrugelmir said:

If you are risk adverse why are you now considering jumping into the water while all the markets are at their most volatile. Not as if there's a safe haven. Drip feeding is the often recommended route to put ones toe into the water initially. There's no immediate rush. The panic may yet come. If the situation turns out to be financially damaging for an extended period. Markets hate uncertainty. . 

Isn't the basic principle -buy low, sell high..? So it seems now (or in the next coming weeks) is the best time for buying, isn't it?

My comment was directed at a new investor. Can be difficult to make the initial step. Choosing an investment is never easy. There's always be something that performs better. Losing the money when you first invest can likewise be concerning. Majority of return over the longer term is derived from the reinvestment of dividends/income. This "crisis" is going to last for a period of time. There's no rush to commit large sums until the picture becomes clearer. As few companies are likely to report exceptional trading figures, if anything the reverse. Not worth getting hung up on market indices alone. 

So would your advice to me (the new investor) is to NOT invest during this volatile time? I have until the end of financial year to open LISA in order to benefit from this years bonus, which I'd like to do but have been putting off for months now, just feel like maybe this drop is the push that I needed. Surely it's better to buy now that at all-time-high, right?

Drip feed into a medium risk widely diversified fund, bonds , equities etc. 

A question for you with regards to all time market highs. 
Which is the better option. Buying Microsoft shares at (a) $29 on a price to earnings rato of 11.   Or     (b) $161 on a price to earnings ratio of 28. 

Alistair31

kiwi_fruit said:

Alistair31 said:

kiwi_fruit said:

Thrugelmir said:

kiwi_fruit said:

Thrugelmir said:

If you are risk adverse why are you now considering jumping into the water while all the markets are at their most volatile. Not as if there's a safe haven. Drip feeding is the often recommended route to put ones toe into the water initially. There's no immediate rush. The panic may yet come. If the situation turns out to be financially damaging for an extended period. Markets hate uncertainty. . 

Isn't the basic principle -buy low, sell high..? So it seems now (or in the next coming weeks) is the best time for buying, isn't it?

My comment was directed at a new investor. Can be difficult to make the initial step. Choosing an investment is never easy. There's always be something that performs better. Losing the money when you first invest can likewise be concerning. Majority of return over the longer term is derived from the reinvestment of dividends/income. This "crisis" is going to last for a period of time. There's no rush to commit large sums until the picture becomes clearer. As few companies are likely to report exceptional trading figures, if anything the reverse. Not worth getting hung up on market indices alone. 

So would your advice to me (the new investor) is to NOT invest during this volatile time? I have until the end of financial year to open LISA in order to benefit from this years bonus, which I'd like to do but have been putting off for months now, just feel like maybe this drop is the push that I needed. Surely it's better to buy now that at all-time-high, right?

You do know you could open an account, fund it with £4K, get the “bonus”, but remain uninvested until you are comfortable to do so. 

I didn't actually know that, thank you. Presumably this is applicable to Hargreaves Lansdown?

Yes

Mrbeethoven

You could put off getting started forever if you're not careful. You can nearly always find reasons not to invest.

Just get started and take it slowly. No-one knows whether or not markets have much further to fall, maybe they have but then again maybe not. By this time next week they could be heading back up again. The one thing that is certain is that if you put money into a fund this weekend you will get more units for your money than you would have done last weekend.

If you start paying in monthly from this point onwards and markets have moved back up by the time you make the 2nd investment you'll be glad you didn't delay. On the other hand, if markets fall further then at least the 2nd investment will get you more units for your money than the 1st one did.

The one thing you should not do is put money in and then panic-sell when markets fall as that is the way to guarantee losses. 

kiwi_fruit

JohnRo said:

The key word is suitability, by all means invest now, this tax year. Ignore the current noise and look to the long term.

Just don't invest in something that is going to scare the crap out of you when you log in to your account and it eventually shows you a 20% paper loss which then has you hovering over the sell button to stop it going even lower..

I understand, and I wouldn't do such thing. It did actually make me think today- is nobody was panic-selling there wouldn't be a market downturn/crash, right? So why do they, if historically they say markets always recover. Maybe I'm not getting something. 

ColdIron

kiwi_fruit said:

Alistair31 said:

kiwi_fruit said:

Thrugelmir said:

kiwi_fruit said:

Thrugelmir said:

If you are risk adverse why are you now considering jumping into the water while all the markets are at their most volatile. Not as if there's a safe haven. Drip feeding is the often recommended route to put ones toe into the water initially. There's no immediate rush. The panic may yet come. If the situation turns out to be financially damaging for an extended period. Markets hate uncertainty. . 

Isn't the basic principle -buy low, sell high..? So it seems now (or in the next coming weeks) is the best time for buying, isn't it?

My comment was directed at a new investor. Can be difficult to make the initial step. Choosing an investment is never easy. There's always be something that performs better. Losing the money when you first invest can likewise be concerning. Majority of return over the longer term is derived from the reinvestment of dividends/income. This "crisis" is going to last for a period of time. There's no rush to commit large sums until the picture becomes clearer. As few companies are likely to report exceptional trading figures, if anything the reverse. Not worth getting hung up on market indices alone. 

So would your advice to me (the new investor) is to NOT invest during this volatile time? I have until the end of financial year to open LISA in order to benefit from this years bonus, which I'd like to do but have been putting off for months now, just feel like maybe this drop is the push that I needed. Surely it's better to buy now that at all-time-high, right?

You do know you could open an account, fund it with £4K, get the “bonus”, but remain uninvested until you are comfortable to do so. 

I didn't actually know that, thank you. Presumably this is applicable to Hargreaves Lansdown?

You can leave cash in your capital account for as long as you like with HL. They'll even pay you a
few fractions of a percent interest

eskbanker

kiwi_fruit said:
I'm also thinking that yearly LISA bonus may help cushion the ups and downs.

And while clarifying LISA rules, perhaps just worth mentioning that there aren't yearly bonuses as such, just a one-off bonus for each contribution, although it effectively comes to the same thing if you happen to make one and only one contribution per tax year....

kiwi_fruit

Thanks for all the replies guys, totally appreciate it. I'll go ahead and open HL LISA this evening. Thinking of half in VLS 80 and half in S&P 500.

eskbanker

kiwi_fruit said:

Thanks for all the replies guys, totally appreciate it. I'll go ahead and open HL LISA this evening. Thinking of half in VLS 80 and half in S&P 500.

That's a very heavy concentration in US equities, given what's already in VLS80, what's the rationale for that?

Thrugelmir

Out of interest why the S&P 500? 

kiwi_fruit

I guess from what I read it fits with my perception of "safe" based on the average dividend yield and the type of companies in it. Should I be doing more reading?