Dow Jones and ftse 100.

Prism

ProDave said:

Prism said:

ProDave said:

Prism said:

ProDave said:

Linton said:

ProDave said:

We each have our own investment strategy.

I would rather miss a rise because I was over cautious, than suffer a fall because I was too brave.

Yes, that is a perfectly rational view to take if a lower long term return is sufficient for your needs.  However continually buying and selling higher risk investments is a very poor way of implementing it.

I have asked before for an example of a safe, low return place to park the money that is in a HL SIPP but nobody yet has suggested where this mythical thing exists.  To put it into a safe savings account would mean taking it out of the SIPP first and paying basic rate tax on it.  Part of my strategy is to time the period when I draw it to avoid any tax on most of it.

So until someone suggests anything else I am left with relatively low risk funds but bailing out if I think there is going to be a crash.

HSBC Global Strategy Cautious dropped about 10% briefly during March and then had pretty much recovered to the same level as the start of the year by mid May. Is that the kind of thing you are after?

That is not far off what I had, but by being out of the market for most of the drop and buying back in, I made an 8% gain, which you will all agree is better than just getting back to where you were.

8% gain from where? When you bought back in until now? Or from the start of the year?

From April to last week.

Now waiting for the fall to buy in again for the next recovery / dead cat bounce.

I have given up trying to understand why the market is doing what it is doing, just trying to go with the flow.

That sounds pretty much the same then to what would have happened if you had done nothing at all. You might have made an extra few % with your lucky timing this time but it sounds like quite a stressful thing to do each time.

AnotherJoe

Why would you invest in the FTSE100?

csgohan4

ProDave said:

Linton said:

ProDave said:

We each have our own investment strategy.

I would rather miss a rise because I was over cautious, than suffer a fall because I was too brave.

Yes, that is a perfectly rational view to take if a lower long term return is sufficient for your needs.  However continually buying and selling higher risk investments is a very poor way of implementing it.

I have asked before for an example of a safe, low return place to park the money that is in a HL SIPP but nobody yet has suggested where this mythical thing exists.  To put it into a safe savings account would mean taking it out of the SIPP first and paying basic rate tax on it.  Part of my strategy is to time the period when I draw it to avoid any tax on most of it.

So until someone suggests anything else I am left with relatively low risk funds but bailing out if I think there is going to be a crash.

you  you need to do more research. Low risk funds are not for daily/monthly trading and timing to make money.

Low risk index trackers are to be left alone for decades to watch them grow, such as VHVG, HMWO. If your selling them once you have a x% gain, your at the mercy of fund managers as you do not know what price you will get and very short term thinking from your part. 

If you cannot find a low risk fund yourself, that is concerning in terms of your own money and playing hot potato with your long term money, some of my portfolio is down 10%, should I freak out and cash in at a loss, of course not, hence the name long term investments, you ride the lows as well as the highs. 

Only invest short term if you can afford to lose that money. I have a fun fund to invest in shares, investing in these is stressful, trying to time the market and regret if you didn't buy at x time

bowlhead99

csgohan4 said:

ProDave said:

Linton said:

ProDave said:

We each have our own investment strategy.

I would rather miss a rise because I was over cautious, than suffer a fall because I was too brave.

Yes, that is a perfectly rational view to take if a lower long term return is sufficient for your needs.  However continually buying and selling higher risk investments is a very poor way of implementing it.

I have asked before for an example of a safe, low return place to park the money that is in a HL SIPP but nobody yet has suggested where this mythical thing exists.  To put it into a safe savings account would mean taking it out of the SIPP first and paying basic rate tax on it.  Part of my strategy is to time the period when I draw it to avoid any tax on most of it.

So until someone suggests anything else I am left with relatively low risk funds but bailing out if I think there is going to be a crash.

you  you need to do more research. Low risk funds are not for daily/monthly trading and timing to make money.

Low risk index trackers are to be left alone for decades to watch them grow, such as VHVG, HMWO. If your selling them once you have a x% gain, your at the mercy of fund managers as you do not know what price you will get and very short term thinking from your part. 

Not sure if I'm missing something csgohan but market index tracker funds such as VHVG or HMWO are not  'low risk' investments in any conventional sense of the word. As you can see from an old FTSE factsheet, 
[ https://research.ftserussell.com/Analytics/FactSheets/Home/DownloadSingleIssueByDate?IssueName=AWORLDS&IssueDate=20170929&IsManual=false ] , the index being tracked by VHVG lost 40% from the beginning to end of 2008, as part of a peak-to-trough drawdown of 57.4% which started in late 2007 and ended in 2009.  [figures in USD].

Sure, if you 'leave it alone for decades to watch them grow', the risk of failing to meet an objective will reduce over time. 

But if someone is trying to get to grips with the options for a relatively safer, lower risk lower return place to park the money, they would typically be looking for a fund that uses a blend of asset classes to meet the lower volatility requirement that they have, not something that gives 100% of the daily global equity market valuation changes. It is only going to confuse matters if you tell them that a typical global equity index tracker that can lose over 50% in eighteen months is a 'low risk' option but must also be left for several decades, showing that it's not a low risk option at all.

If your selling them once you have a x% gain, your at the mercy of fund managers as you do not know what price you will get 

You will get whatever the assets are worth at the very next daily dealing point.


Really as has been mentioned on other threads, it is very difficult to get a return that neatly matches inflation with some sort of mythical 'mildly cautious' method to park your cash.  Parking the cash means depositing it and coming back to it later and still finding it there, which is the standard function of a cash account at a bank or the cash area within a pension. Over the short term, that's the cautious option.  So one can do that (be highly cautious in cash and accept that you'll lose a bit against inflation), or go more aggressive and take some investment risk on a path to inflation-beating growth (with risk of short term loss in both real and nominal terms). Trying to juggle between the two options means you may end up taking more risk than you really need to create the chance of breaking even in real terms.

The '100% global equity' option from VHVG or HMWO would be off the menu, if ProDave's mindset is that they "would rather miss a rise because I was over cautious".  No point saying 'these are low risk if you hold them for many decades' when they're clearly higher risk options from the menu of choices. The fact they are not as high risk as having a very concentrated portfolio or gambling on individual stocks does not mean they are a 'low risk' tracker. They are a tracker providing the full risks of tracking the market (50%+ drawdown potential).