Is now a good time to invest in stocks and shares ISA’s

MaxiRobriguez

"Personally I don't think" would lend weight to it being personal opinion rather than a statement of fact.

It's difficult on these boards unless you're willing to append "This is not adivce" to every post as you never know how the reader will take away the commentary. 

EdGasketTheSecond

It does not look a very good time to start a S&S ISA to me. BoE predicts worst slump for 300 years:

https://uk.reuters.com/article/uk-health-coronavirus-britain-boe/bank-of-england-sees-worst-slump-in-300-years-as-coronavirus-bites-idUKKBN22I3BP

Alistair31

EdGasketTheSecond said:

It does not look a very good time to start a S&S ISA to me. BoE predicts worst slump for 300 years:

https://uk.reuters.com/article/uk-health-coronavirus-britain-boe/bank-of-england-sees-worst-slump-in-300-years-as-coronavirus-bites-idUKKBN22I3BP

If that’s the case then you are quite right, better buying opportunities will be coming. I assume that’s what you mean ? 

blue_max_3

EdGasketTheSecond said:

It does not look a very good time to start a S&S ISA to me. BoE predicts worst slump for 300 years:

https://uk.reuters.com/article/uk-health-coronavirus-britain-boe/bank-of-england-sees-worst-slump-in-300-years-as-coronavirus-bites-idUKKBN22I3BP

The line that resonates with me is 'the stock market is not the economy'. The only reason it generally seems to be in positive territory at the moment. You can make some assumptions about the economy, but the market is a black art!

EdGasketTheSecond

But eventually market and economy must meet e.g. when companies go bust or make a loss due to the state of the economy then the share price is affected.

blue_max_3

EdGasketTheSecond said:

But eventually market and economy must meet e.g. when companies go bust or make a loss due to the state of the economy then the share price is affected.

It isn't as clear cut. If there is a reason for a loss (such as investing in plant etc), it could be that there is growth predicted. The people who do this every day struggle to get it right all the time. With the biggest recession in 300 years predicted by the BOE, the markets should be bottoming out, but they are far from it!

Alexland

EdGasketTheSecond said:

But eventually market and economy must meet e.g. when companies go bust or make a loss due to the state of the economy then the share price is affected.

"Personally I don't think" it's that logical anymore with global economic policy throwing the kitchen sink at keeping stock prices high. Even if the entire index went bankrupt we would still be wondering if the Dow might hit 30k later this year. We live in strange and unpredictable times.

EdGasketTheSecond

The FED can prop the markets up to a certain extent but eventually the market wins. Look at Japan's market since 1989 which has had no end of gov't intervention including stock purchases; the index is still way below its peak 30 years later.

In answer to the earlier question "If that’s the case then you are quite right, better buying opportunities will come be coming. I assume that’s what you mean ? " Yes, I mean wait a couple of years and see how it pans out.

masonic

EdGasketTheSecond said:

The FED can prop the markets up to a certain extent but eventually the market wins. Look at Japan's market since 1989 which has had no end of gov't intervention including stock purchases; the index is still way below its peak 30 years later.

The peak in the Nikkei 225 occurred at the beginning of 1990. It's notable that while returns for those holding throughout that period until today were not good, they probably weren't negative, with the sector average annualised return of +1.3%.

Of course the first chart is of the market index price, while the second chart is of actual total return performance, including dividends and currency fluctuations UK investors would have been exposed to. Drip feeding and rebalancing strategies would have delivered a better return over the period, but Japan does make the case for diversification beyond a single market. It's notable that there was massive government intervention in the latter period, which has fuelled the rise in the last few years.

I realise you are certain that the annualised 6% returns enjoyed by investors over the last 5-10 years are going to be savaged by the imminent severe second wave of the Covid crash and ensuing depression, but it's interesting to note the economic policy was quite successful over a long period of time.

Sailtheworld

EdGasketTheSecond said:

But eventually market and economy must meet e.g. when companies go bust or make a loss due to the state of the economy then the share price is affected.

The market and economy always meet. Life is simpler and someone is more likely to make money if they start with that assumption.

You have (or think you have) a gift for being able to determine that, today, you've identified they've met in the wrong place and that gold is the answer to whatever the question is. Such is that gift you'll also know when in the future when they've met in the wrong place again and the answer will be selling gold and buying shares. Don't assume everyone else has this heaven sent gift - we'd all be as rich as you.

OP, of course it's a good time to start a S&S ISA if that's what you want to do. The only thing I'd suggest is that you consider what risks you're happy to take and consider those risks against the backdrop of your total financial situation. Investing in shares is riskier than usual at the moment so, unless it really is different this time, investors should expect a higher premium for taking that risk.