Shortest time to invest in shares

[Deleted User]

eskbanker said:

ZingPowZing said:

The visual impression from the chart is the same as the one below (from the same article). 
Both pander to the idea that things work out if only you sit still and wait.
But - since the benchmark is the starting line - crossing it after 13 yrs (or whatever) is not a measure of the success of the strategy but - by then - rather its failure.
So the optics are deceiving.

Yes, the two charts in that piece are mirror images of each other so it's redundant to show both really!

I don't see the chart as promoting or validating any particular investment strategy as such though, it's just saying that for that specific choice of investment (a broad and reasonably representative one, if looking to condense everything down to a single example) over those historical periods, those were the outcomes.  However, the fact that I've already had to point that out several times on this thread does show that it can be misinterpreted....

Or to put it another way, what sort of chart do you think would be a better illustration of the wisdom of investing generally being more positive over longer periods than shorter ones, or do you not believe that to be the case?

Where you profess to see no art behind the chart, eskbanker, I see the agenda of "nutmegonomics": short-term bad/long-term good. So, what is Nutmeg's interest in promoting that narrative?

https://www.nutmeg.com/about/the-nutmeg-story

Nutmeg is one of those houses whose appeal  is "making it simple"  for the unsophisticated investor.

Lies, damned lies and statistics...yes, the longer you sit on the riverbank, the more likely you are to catch a fish...but the graph doesn't really show that to the eye...it looks more like a stairway to heaven. 

I agree that investing over a long term is better than over short but only from the premise that investing is better than not. So a roadsign would probably be more apt: "1 in 7 hill" or similar.

Nebulous2

Thrugelmir said:

csgohan4 said:

Don't forget, equally important is the quality of the share. No matter how long you hold, some shares are really poor value, like BT. So if you pick the wrong share, Funds, your not going to get much no matter how long you hold it.

BT hit over £20 in the Dot Com era. 

Do you remember Freeserve? I used them to access the internet. Before that everyone had paid for phonecalls all the time they were online. Freeserve listed on the stock exchange.  Dixons owned something like 20% of Freeserve. At one point the 20% of Freeserve that they owned was worth more than Dixons listing - meaning the rest of the company had a negative valuation. 

eskbanker

ZingPowZing said:

Where you profess to see no art behind the chart, eskbanker, I see the agenda of "nutmegonomics": short-term bad/long-term good.

I'm not planning to go round other investment companies researching it but I hardly think that 'short-term bad/long-term good' is a unique perspective offered by Nutmeg that puts them at odds with their competitors!

ZingPowZing said:

Lies, damned lies and statistics...yes, the longer you sit on the riverbank, the more likely you are to catch a fish...but the graph doesn't really show that to the eye...it looks more like a stairway to heaven.

Only if you happen to be "a lady who's sure all that glitters is gold"....

ZingPowZing said:

I agree that investing over a long term is better than over short but only from the premise that investing is better than not. So a roadsign would probably be more apt: "1 in 7 hill" or similar.

But a standard hill roadsign features a constant gradient, which is of course wholly unrepresentative of real-world investing, or are you suggesting that linear returns are a reasonable expectation?

Alexland

Nebulous2 said:
Do you remember Freeserve? I used them to access the internet. Before that everyone had paid for phonecalls all the time they were online. 

I remember the initial selling point of Freeserve was that there was no subscription so you were paying for their service via the local rate phone call? It was then towards the end of the dial up ISPs that they switched back to charging a subscription and making the calls free using the BT FRIACO (flat rate internet access connection option) product where the ISPs paid a higher rental on their inbound ports to receive unlimited freephone calls. Anyway I am starting to sound old now but telecoms were interesting although often loss making in the 90s.

[Deleted User]

eskbanker said:

ZingPowZing said:

Where you profess to see no art behind the chart, eskbanker, I see the agenda of "nutmegonomics": short-term bad/long-term good.

I'm not planning to go round other investment companies researching it but I hardly think that 'short-term bad/long-term good' is a unique perspective offered by Nutmeg that puts them at odds with their competitors!

ZingPowZing said:

Lies, damned lies and statistics...yes, the longer you sit on the riverbank, the more likely you are to catch a fish...but the graph doesn't really show that to the eye...it looks more like a stairway to heaven.

Only if you happen to be "a lady who's sure all that glitters is gold"....

ZingPowZing said:

I agree that investing over a long term is better than over short but only from the premise that investing is better than not. So a roadsign would probably be more apt: "1 in 7 hill" or similar.

But a standard hill roadsign features a constant gradient, which is of course wholly unrepresentative of real-world investing, or are you suggesting that linear returns are a reasonable expectation?

Absolutely. Wrong as time will show it to be, a straight line is the only valid representation of future expectation we can infer from historical performance without interposing a guess of when it may deviate from it.

The thread started from a false premise, that enrolling in a beneficial scheme is only beneficial after all possible negative outcomes are ironed out by time.

[Deleted User]

Nebulous2 said:

Thrugelmir said:

csgohan4 said:

Don't forget, equally important is the quality of the share. No matter how long you hold, some shares are really poor value, like BT. So if you pick the wrong share, Funds, your not going to get much no matter how long you hold it.

BT hit over £20 in the Dot Com era. 

Do you remember Freeserve? I used them to access the internet. Before that everyone had paid for phonecalls all the time they were online. Freeserve listed on the stock exchange.  Dixons owned something like 20% of Freeserve. At one point the 20% of Freeserve that they owned was worth more than Dixons listing - meaning the rest of the company had a negative valuation. 

I remember Alan Sugar sending out a free machine that charged a nominal sum for every email it processed.

Thank God the internet has not been completely monetised.

eskbanker

ZingPowZing said:

Absolutely. Wrong as time will show it to be, a straight line is the only valid representation of future expectation we can infer from historical performance without interposing a guess of when it may deviate from it.

Well, yes, the shape of the chart shouldn't be read as a prediction of actual future returns, and it's clearly not meant to be, as it's just an analysis of some historical data, despite its labelling trying to imply that it represents 'probability'.  The fact that some might misinterpret it doesn't mean that a straight line would be a more informative or accurate substitute though, so if you're criticising the chart as 'pretty terrible' but advocating a straight line in its place, that doesn't really seem a particularly useful approach to me!

Is your hypothetical straight line plotted against the same axes, i.e. percentage likelihood of positive outcome versus time, or are you thinking of some completely different representation?

ZingPowZing said:
The thread started from a false premise, that enrolling in a beneficial scheme is only beneficial after all possible negative outcomes are ironed out by time.

I agree that OP's original question ("I have a vague idea that it's not recommended to buy shares if you're planning to hold them for less than 5 years- does that rule still hold good?") was simplistic and naive in its apparent assumption that five years is some magically significant turning point, and also that anyone choosing to interpret the chart as signifying that time will heal all ills is missing the point....

maxsteam

ece9600 said:

I have a vague idea that it's not recommended to buy shares if you're planning to hold them for less than 5 years- does that rule still hold good?

I mentioned in another post that I held EasyJet for 90 minutes and made a profit. It was CFDs to avoid stamp duty and it was a low-cost platform.

If you are paying stamp duty and £10 commission, it is sensible to plan to hold the investment for more than a year and to invest £1000 or more.

eskbanker

maxsteam said:

ece9600 said:

I have a vague idea that it's not recommended to buy shares if you're planning to hold them for less than 5 years- does that rule still hold good?

I mentioned in another post that I held EasyJet for 90 minutes and made a profit. It was CFDs to avoid stamp duty and it was a low-cost platform.

If you are paying stamp duty and £10 commission, it is sensible to plan to hold the investment for more than a year and to invest £1000 or more.

But that's two fundamentally different concepts being conflated there - your EasyJet deal was what's generally considered to be trading (measured in hours or days), whereas OP's thread title asks about investing (typically years).

https://www.investopedia.com/ask/answers/12/difference-investing-trading.asp

Dealing costs shouldn't be ignored but also shouldn't be a significant influence on investing decisions - it's self-evident that you're not truly ahead until you've covered those costs (and any future selling ones) but it's unlikely that anyone looking to invest will see that as a particularly meaningful milestone, in the context of the reason to invest in the first place....

maxsteam

eskbanker said:

maxsteam said:

But that's two fundamentally different concepts being conflated there - your EasyJet deal was what's generally considered to be trading (measured in hours or days), whereas OP's thread title asks about investing (typically years).

I would disagree that there's a fundamental difference. The only difference is timeframe. The point that I was making was that it's not solid advice to suggest that "it's not recommended to buy shares if you're planning to hold them for less than 5 years".