Sensible low risk investment

Aristotle67

I won't pull it out but will leave it in for around five years and then make a decision. If it costs me a packet then so be it, but it will be the only investment on which I lose as there won't be any others.  I guess I just was not expecting what has occurred. I understand that considering the ongoing war stocks will not perform as they did in the recent bull market but in my naivete I understimated how even a small movement downwards would make me feel. So investing is not for me. I was looking at one of the Global funds of the rural-Oxford based Evenlode, but I dare not get involved. Wouldn't be able to cope with it. At least I have learned something about myself 

tebbins

Aristotle67 said:

I won't pull it out but will leave it in for around five years and then make a decision. If it costs me a packet then so be it, but it will be the only investment on which I lose as there won't be any others.  I guess I just was not expecting what has occurred. I understand that considering the ongoing war stocks will not perform as they did in the recent bull market but in my naivete I understimated how even a small movement downwards would make me feel. So investing is not for me. I was looking at one of the Global funds of the rural-Oxford based Evenlode, but I dare not get involved. Wouldn't be able to cope with it. At least I have learned something about myself 

There has literally never been a single calendar year in human history free of war.
Ultimately, investing is the only way to have a chance of growing wealth at any rate significantly above inflation.

Thrugelmir

Collyflower1 said:

What about bringing a lump sum back to cash and drip-feeding , say £500-£750 each month? 

Over the longer term much of the return is generated by the reinvestment of dividends, other income and capital disatributions. Not just a question of share prices going forever upwards. Compounding is often overlooked. 

Aristotle67

tebbins said:

There has literally never been a single calendar year in human history free of war.
Ultimately, investing is the only way to have a chance of growing wealth at any rate significantly above inflation.

Oh, I don't believe there has been any point in my lifetime when there was not a war going on in one part of the world or another. 

I understand investing is the only way to have a chance of growing wealth above inflation, but what I have come to realise is that it is a chance I am not cut out for taking. I would rather be safe than sorry and take the hit. I will try personal adjustments to offset the effect of inflation.

With the current cost of living crisis only going to worsen as the year progresses, I see a danger we may end up in a depression. Not perhaps to the extent of the 1930s "brother can you spare a dime" depression - and when Wall Street crashed it was for a number of reasons (failure of mass production, weak banking system, US foreign trade in a bad way, uneven distribution of wealth etc) - but one failure of the world today is a tendency to disregard the lessons of history and conclude that past events may not be repeated in today's world. I confess that scares me and illustrates that I am not cut out to be an investor, even if my worse fears turn out to be unfounded. 

CheekyMikey

Aristotle67 said:

tebbins said:

There has literally never been a single calendar year in human history free of war.
Ultimately, investing is the only way to have a chance of growing wealth at any rate significantly above inflation.

Oh, I don't believe there has been any point in my lifetime when there was not a war going on in one part of the world or another. 

I understand investing is the only way to have a chance of growing wealth above inflation, but what I have come to realise is that it is a chance I am not cut out for taking. I would rather be safe than sorry and take the hit. I will try personal adjustments to offset the effect of inflation.

With the current cost of living crisis only going to worsen as the year progresses, I see a danger we may end up in a depression. Not perhaps to the extent of the 1930s "brother can you spare a dime" depression - and when Wall Street crashed it was for a number of reasons (failure of mass production, weak banking system, US foreign trade in a bad way, uneven distribution of wealth etc) - but one failure of the world today is a tendency to disregard the lessons of history and conclude that past events may not be repeated in today's world. I confess that scares me and illustrates that I am not cut out to be an investor, even if my worse fears turn out to be unfounded. 

If you invested six weeks ago once the war had started, with stocks already well down and interest rates rising, and didn’t realise that we were in for a prolonged period of volatility, then yes, I don’t think investing is for you. By the way, I’d call only 2% down over the last six weeks a result…. I dropped over 1% in a day this week.

Aristotle67

Yes, I did invest then. I was going to hold off, but all the talk, and the suggestions in various articles I read, was not to try and second guess when the market might recover and that it is still the best option for funds at present. That said, I did choose to hold off with this year's full ISA allowance. 

My fund also dropped more than 1% in a single day this week.

Albermarle

Aristotle67 said:

Yes, I did invest then. I was going to hold off, but all the talk, and the suggestions in various articles I read, was not to try and second guess when the market might recover and that it is still the best option for funds at present. That said, I did choose to hold off with this year's full ISA allowance. 

My fund also dropped more than 1% in a single day this week.

The problem is that in the current situation there are no real obvious good choices.
Either you invest in Stocks and shares based investment funds , which will have lost 5% to 15% do far this year, but may recover in the short /medium term ( or get worse) but will almost for sure recover and grow in the long term ( > 10 years) 

 Or stay with cash savings that will be dropping by a  minimum 5% in value in 2022 ( maybe 7%) and probably lose more value in the following year(s) .

Although the loss of value for cash savings is currently less than for stocks and shares, the problem is that the loss is guaranteed and unavoidable and unrecoverable , whilst Stocks and shares should recover at some point .

So to me remaining invested, but holding quite a lot of cash as well, seems like the best of a bad job.

P933alilli

Thrugelmir said:

Collyflower1 said:

What about bringing a lump sum back to cash and drip-feeding , say £500-£750 each month? 

Over the longer term much of the return is generated by the reinvestment of dividends, other income and capital disatributions. Not just a question of share prices going forever upwards. Compounding is often overlooked. 

Thanks but how do things like compounding work in reality? Would any compounding not be lost over a year/2yr/5yr period when the price is lower than when you started? And how do re-investment of dividends and distributions work in such circumstances? How much can the latter two measures affect returns? 

Thrugelmir

Collyflower1 said:

Thrugelmir said:

Collyflower1 said:

What about bringing a lump sum back to cash and drip-feeding , say £500-£750 each month? 

Over the longer term much of the return is generated by the reinvestment of dividends, other income and capital disatributions. Not just a question of share prices going forever upwards. Compounding is often overlooked. 

Thanks but how do things like compounding work in reality? Would any compounding not be lost over a year/2yr/5yr period when the price is lower than when you started? And how do re-investment of dividends and distributions work in such circumstances? How much can the latter two measures affect returns? 

If the unit price is lower than when you started. Then any income received and reinvested will buy units at a lower price. Resulting in an average unit price for the entire holding. 

eskbanker

Collyflower1 said:

Thrugelmir said:

Collyflower1 said:

What about bringing a lump sum back to cash and drip-feeding , say £500-£750 each month? 

Over the longer term much of the return is generated by the reinvestment of dividends, other income and capital disatributions. Not just a question of share prices going forever upwards. Compounding is often overlooked. 

Thanks but how do things like compounding work in reality? Would any compounding not be lost over a year/2yr/5yr period when the price is lower than when you started? And how do re-investment of dividends and distributions work in such circumstances? How much can the latter two measures affect returns? 

There are too many variables to generalise about the scale of the benefit of compounding, but if you take the FTSE100 index as an example (renowned for higher than average divi payers), the index value is pretty much where it was five years ago, but if dividends were reinvested then it's up by about 21% over that period.  However, it's not as simple as comparing 0% and 21%, in that if dividends weren't reinvested then those distributions would have been spent/invested/used elsewhere....