FTSE tracker

Thrugelmir

I personally prefer facts to beliefs.  

Prism

steampowered said:

Thrugelmir said:

Nor is 5 years a recommended time frame for investing in stock markets. Think 10 years plus. 

People sometimes say this but I don't believe it is supported by the facts.

When you actually look at the statistics since the 1970s, there is not much difference in risk between a 5 year investment and a 10 year investment. The risk inflection point appears to come at about 4 years.

Exhibit A:

Source: Macrobond; MSCI World Equity Mid and MSCI Large Cap Total Return in GBP, 1 January 1971-20 May 2020

I think the problem with 5 year investments isn't just the probability of a loss which is quite low. Its the added chance of almost zero returns, less than interest rate returns and less than inflation returns. Its just as important that people realise that after 5-10 years, although technically in the green they may well be disappointed with a very low gain especially if investing for the first time after hearing of 10 years of double digit gains.

I am not sure there is a graph  of historical probability of being disappointed

25_Years_On

ProDave said:

Hold onto your cash just now.  Look at the FTSE100 (for example) it's firmly on a steepening downward trend as Covid cases and restrictions are spreading fast.

Wait until it has done it's falling, Covid is starting to get better again, and the markets start rising again, then buy into your tracker.

My gut feeling is that will not be this year, possibly in the spring?  But keep watching the markets.

You can never tell though. Last time after reaching the bottom, in a couple of days it was well up. Perhaps better to buy into the fall. The FTSE is currently 12% off its recent high.

Steve182

I would not track a crap index like FTSE100
FTSE250 maybe....but not my first choice
Do a bit more research before investing.
Look at some stats for the past 50 years or whenever. Maybe take five 10 year periods? covering 70-80, 80-90, 90-00, 00-10 and 10-20 or any period you like
Find some stats on FTSE 100 TR
then find stats on FTSE 250 TR
Definitely don't overlook the S & P 500. TR stats with and without inflation can be found on this site  - https://dqydj.com/sp-500-return-calculator/
Maybe also look at Nasdaq, MSCI
Then decide.....

TBC15

The FTSE 100 is a Jurassic index, to be avoided at all costs.

Another_Saver

Steve182 said:

I would not track a crap index like FTSE100
FTSE250 maybe....but not my first choice
Do a bit more research before investing.
Look at some stats for the past 50 years or whenever. Maybe take five 10 year periods? covering 70-80, 80-90, 90-00, 00-10 and 10-20 or any period you like
Find some stats on FTSE 100 TR
then find stats on FTSE 250 TR
Definitely don't overlook the S & P 500. TR stats with and without inflation can be found on this site  - https://dqydj.com/sp-500-return-calculator/
Maybe also look at Nasdaq, MSCI
Then decide.....

The FTSE 100 is a market cap weighted index of the 100 largest companies in the UK.
The S&P 500 is a market cap weighted index of the largest 500 companies in the US.
The long term performance of the UK and US stock markets has been the same.
The 100 index is smaller, a little more concentrated, a little less diverse and contains a different mix of companies, but to assert without explanation or substantiation that's it crap is... Silly... Especially at a time when the UK is the cheapest major market in the world and the US is firmly in dot com bubble territory.

Steve182

Another_Saver said:

Steve182 said:

I would not track a crap index like FTSE100
FTSE250 maybe....but not my first choice
Do a bit more research before investing.
Look at some stats for the past 50 years or whenever. Maybe take five 10 year periods? covering 70-80, 80-90, 90-00, 00-10 and 10-20 or any period you like
Find some stats on FTSE 100 TR
then find stats on FTSE 250 TR
Definitely don't overlook the S & P 500. TR stats with and without inflation can be found on this site  - https://dqydj.com/sp-500-return-calculator/
Maybe also look at Nasdaq, MSCI
Then decide.....

The FTSE 100 is a market cap weighted index of the 100 largest companies in the UK.
The S&P 500 is a market cap weighted index of the largest 500 companies in the US.
The long term performance of the UK and US stock markets has been the same.
The 100 index is smaller, a little more concentrated, a little less diverse and contains a different mix of companies, but to assert without explanation or substantiation that's it crap is... Silly... Especially at a time when the UK is the cheapest major market in the world and the US is firmly in dot com bubble territory.

The long term performance of the UK and US stock markets has CERTAINLY NOT been the same as is evident to anyone spending a little time doing their own research. The FTSE250 has certainly outperformed the 100 hence I didn't dismiss it as an investment option.
I'm one of about 4 or 5 people who have already replied to this thread saying that the FTSE100 should be avoided.

Another_Saver

Steve182 said:

Another_Saver said:

Steve182 said:

I would not track a crap index like FTSE100
FTSE250 maybe....but not my first choice
Do a bit more research before investing.
Look at some stats for the past 50 years or whenever. Maybe take five 10 year periods? covering 70-80, 80-90, 90-00, 00-10 and 10-20 or any period you like
Find some stats on FTSE 100 TR
then find stats on FTSE 250 TR
Definitely don't overlook the S & P 500. TR stats with and without inflation can be found on this site  - https://dqydj.com/sp-500-return-calculator/
Maybe also look at Nasdaq, MSCI
Then decide.....

The FTSE 100 is a market cap weighted index of the 100 largest companies in the UK.
The S&P 500 is a market cap weighted index of the largest 500 companies in the US.
The long term performance of the UK and US stock markets has been the same.
The 100 index is smaller, a little more concentrated, a little less diverse and contains a different mix of companies, but to assert without explanation or substantiation that's it crap is... Silly... Especially at a time when the UK is the cheapest major market in the world and the US is firmly in dot com bubble territory.

The long term performance of the UK and US stock markets has CERTAINLY NOT been the same as is evident to anyone spending a little time to do their own research.

/
UK 1900-2019 9.8%
US 1900-2019 9.8%
🤷‍♂️
The UK dataset becomes less reliable before 1930, the US data before 1926.
What research did I evidently miss?

Another_Saver

TBC15 said:

The FTSE 100 is a Jurassic index, to be avoided at all costs.

Rather that than the S&P 500 full of dot com valuation consumer electronics and media companies, and healthcare companies that won't be around when the US inevitably switches to public healthcare.

Steve182

Another_Saver said:

Steve182 said:

Another_Saver said:

Steve182 said:

I would not track a crap index like FTSE100
FTSE250 maybe....but not my first choice
Do a bit more research before investing.
Look at some stats for the past 50 years or whenever. Maybe take five 10 year periods? covering 70-80, 80-90, 90-00, 00-10 and 10-20 or any period you like
Find some stats on FTSE 100 TR
then find stats on FTSE 250 TR
Definitely don't overlook the S & P 500. TR stats with and without inflation can be found on this site  - https://dqydj.com/sp-500-return-calculator/
Maybe also look at Nasdaq, MSCI
Then decide.....

The FTSE 100 is a market cap weighted index of the 100 largest companies in the UK.
The S&P 500 is a market cap weighted index of the largest 500 companies in the US.
The long term performance of the UK and US stock markets has been the same.
The 100 index is smaller, a little more concentrated, a little less diverse and contains a different mix of companies, but to assert without explanation or substantiation that's it crap is... Silly... Especially at a time when the UK is the cheapest major market in the world and the US is firmly in dot com bubble territory.

The long term performance of the UK and US stock markets has CERTAINLY NOT been the same as is evident to anyone spending a little time to do their own research.

/
UK 1900-2019 9.8%
US 1900-2019 9.8%
🤷‍♂️
The UK dataset becomes less reliable before 1930, the US data before 1926.
What research did I evidently miss?

During the timeline that I suggested in my original reply, 1970 to 2020, how have they compared?  That's surely more relevant to an investor today to what the marked did 100 years ago. 
If you go back further I'm aware that the US markets performed less well, certainly they suffered more during the great depression. Perhaps I should have clarified that timeline in my last comment, but I didn't consider what happened >50 years ago relevant to this thread.