Golden Rules for Investment Blog

masonic

Which is the market you wish to invest in that is currently nose diving?

Prism

DoneWorking said:

R_P_W said:

Surely you have answered your own question?!

Out of interest what would you be waiting for exactly?

I don't really think too many returning investors would want to begin investing while markets are still nose diving.
And obviously it's difficuilt to know when they may bottom out

Assuming most people invest in smallish amounts, drip feeding in as they earn, then when markets are dropping is a perfect time to start. Certainly better than investing for a few years on the way up before a fall. 

It can be more daunting if you come into a single lump sum of money I suppose, but its still the right choice to invest it rather than try and time it.

DoneWorking

masonic said:

Which is the market you wish to invest in that is currently nose diving?

I had been looking at this as a DIY option

The Irish Domiciled version of this ESG Fund

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-developed-world-all-cap-equity-index-fund-uk-gbp-acc/overview

EthicsGradient

If you have a lump sum, and the market is volatile as at present, then splitting it up into a few chunks, which are then invested separately at intervals, is a way to take the risk of of it all going in at a high (while, of course, meaning the chance of investing it all at a low goes down too). That could be, say, 5 parts, invested every 2 weeks, if you want to get it invested fairly quickly (meaning you have "time in the market" - all invested over the next 2 months), or invest them once a month, to average over a bit longer, or even more parts, once a month to average over longer still.

masonic

DoneWorking said:

masonic said:

Which is the market you wish to invest in that is currently nose diving?

I had been looking at this as a DIY option

The Irish Domiciled version of this ESG Fund

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-developed-world-all-cap-equity-index-fund-uk-gbp-acc/overview

That's a high risk fund, it would be well beyond your risk tolerance as discussed in your previous threads. It is too risky as a single holding for most people. It has actually been on the rise this week, but the year to date fall of a little under 10% is by no means the worst that could happen to a fund like this. I think if you were to choose this fund as an alternative to the cautious portfolio your adviser selected for you (with the disappointing ~4% return projection), you run the risk of being scared into selling the next time a crash comes along, which may put you in a worse position than if you'd never invested in it. I don't think the returns at the level of risk you can tolerate are going to be sufficient for you, and investing above your risk tolerance is unlikely to end well, so I'm leaning towards the 'never' part of your scale, as far as DIY is concerned.

Be honest with yourself, if you drip feed your money into this fund over a period of a few months, then it starts falling again, how great a loss would you be able to stomach before you panic and pull your money out? 20%, 30%, 40%? Or do you think you could tolerate something like this and not lose sleep over it?

DoneWorking

masonic said:

DoneWorking said:

masonic said:

Which is the market you wish to invest in that is currently nose diving?

I had been looking at this as a DIY option

The Irish Domiciled version of this ESG Fund

https://www.vanguardinvestor.co.uk/investments/vanguard-esg-developed-world-all-cap-equity-index-fund-uk-gbp-acc/overview

That's a high risk fund, it would be well beyond your risk tolerance as discussed in your previous threads. It is too risky as a single holding for most people. It has actually been on the rise this week, but the year to date fall of a little under 10% is by no means the worst that could happen to a fund like this. I think if you were to choose this fund as an alternative to the cautious portfolio your adviser selected for you (with the disappointing ~4% return projection), you run the risk of being scared into selling the next time a crash comes along, which may put you in a worse position than if you'd never invested in it. I don't think the returns at the level of risk you can tolerate are going to be sufficient for you, and investing above your risk tolerance is unlikely to end well, so I'm leaning towards the 'never' part of your scale, as far as DIY is concerned.

Be honest with yourself, if you drip feed your money into this fund over a period of a few months, then it starts falling again, how great a loss would you be able to stomach before you panic and pull your money out? 20%, 30%, 40%? Or do you think you could tolerate something like this and not lose sleep over it?

You have clearly mapped out why I have not gone ahead with any of the options I have put forward over the last few post threads I put out on this forum

All of them have flaws

The DIY option is risky

The IFA option is risky and current projections have fallen from 4% to over -2%

Hence I am still in cash savings getting hammered by inflation

At the same time it is obvious that there are a lot of other people extremely concerned about their pensions and investments and wondering where we are headed

masonic

DoneWorking said:

At the same time it is obvious that there are a lot of other people extremely concerned about their pensions and investments and wondering where we are headed

An investor can expect to go through many short term periods where their portfolio fails to make a positive return. This is completely normal. As boston said, it takes faith in the long term returns to deal with the periods of loss. If you don't have faith in the market's ability to deliver long term returns, then you may be able to have faith in an adviser to steer the ship for you. If you lack faith even in an adviser, then there is little that can be done.

Likewise, with inflation, it is necessary to look to the long term. Inflation has certainly taken a bite out of your cash savings over the past 12 months, and is likely to continue feeding on them for the rest of this year. However, inflation has been incredibly low over the 2010s, and will not remain where it is now forever. Over the long term, interest from 'active cash' has done quite well to compensate for the effects of inflation, depending on how much the taxman takes away. It is a very unusual situation where the best savings rates are several percent below the rate of inflation.

DoneWorking

Thanks Masonic

I often get charged with being indecisive but believe me I have given this matter a lot of thought

In fact it's in my thoughts all the time.
I listen to people saying markets are always volatile but that's not how it feels for people like me

Brexit Covid War in Ukraine Friction between China and USA Global Warming Energy Crisis etc etc

I'm just trying to make sense of it all 
I don't want to be the chump who jumps in just before the equivalent of the Wall Street Crash of the last Century

Prism

So do you not already have investments in the form of a pension?

DoneWorking

I did

But I set it up and left it to the 
Financial Advisor looking after it and apart from a very few hiccups it did ok

I sorted out my pension a few years ago