Vanguard Is It A Good Time To Top Up

awrightson

I understand that logic dunston but perhaps it would give a better chance of averaging out the price paid if there is to be another drop similar to the one that has just occurred in the last few weeks, but on the flip side it could go the other way I suppose.
Not really a case of being nervous though I was just looking for some thought's from other's, for a novice trying to set up a small investment. So all opinions and ideas are most welcome and will be considered.

dunstonh

I understand that logic dunston but perhaps it would give a better chance of averaging out the price paid if there is to be another drop similar to the one that has just occurred in the last few weeks, but on the flip side it could go the other way I suppose.

It is a possible outcome but statistically it will result in a worse outcome in the majority of periods.   Even more so after a significant drop has already occurred.

You have around a 1 in 4 chance of phasing being best vs a 3 in 4 chance single will be best.

Audaxer

awrightson said:

Albermarle, Phew I was panicking there! The sipp has been topped up this year so can't add anymore to it.

I suppose there's always a risk in the vls80 going down in any year but my hopes are it doesn't and does it actually make a little profit to invest next year and the following years into the sipp. 

If VLS80 has fallen in value next tax year when you want to top up your SIPP, why wouldn't you just sell £2,880 from the VLS80 in your S&S ISA and put it in your SIPP and invest it straight away in the same fund - VLS80? When the £720 tax relief is added to your SIPP, I would just invest that in the VLS80 as well. If you did that it wouldn't matter that you are selling VLS80 at a loss in your S&S ISA, as you would be immediately reinvesting in it in your SIPP. If you have enough in cash savings to do the sell and buy transactions on the same day, that is even better as you are sure to buy back at the exact same price.

eskbanker

awrightson said:

I understand that logic dunston but perhaps it would give a better chance of averaging out the price paid if there is to be another drop similar to the one that has just occurred in the last few weeks, but on the flip side it could go the other way I suppose.

What drop?  The LifeStrategy funds, like most of their peers, have been on the rise steadily throughout the last six weeks since bottoming out in mid October....

NoMore

eskbanker said:

awrightson said:

I understand that logic dunston but perhaps it would give a better chance of averaging out the price paid if there is to be another drop similar to the one that has just occurred in the last few weeks, but on the flip side it could go the other way I suppose.

What drop?  The LifeStrategy funds, like most of their peers, have been on the rise steadily throughout the last six weeks since bottoming out in mid October....

He does say if, he’s talking about the future not a drop that has happened recently. 

awrightson

Again thanks for the replies.
Dunston After you saying that I actually recall reading somewhere before making my initial investment that you were just as well to make a lump sum as opposed to monthly payments.
Audaxer I've read your message a few times and can't get my hear around it but will try again later!
Eskbanker and NoMore you are both right with what I said, apologies if I am not explaining it as clearly as I should.

adindas

Albermarle said:

It would have been better to have added it 5 weeks ago as VLS80 is 6% up since then. You are trying to time the market, which even experienced professional investors struggle to do.

Most of acute professionals (not financial advisers) are timing the market. Just look at the  how on CNBC television, Yahoo finance, etc.

But they don't blindly do that. They understand the market as well as using various probability tools such as technical analysis, mood in the market, market breadth, volatility.

Even on the day they decide to enter the market by instructing their brokers, they do not blindly buy any time on that day but they are using VWAP, to get the best probability for a good entry in that day.

eskbanker

NoMore said:

eskbanker said:

awrightson said:

I understand that logic dunston but perhaps it would give a better chance of averaging out the price paid if there is to be another drop similar to the one that has just occurred in the last few weeks, but on the flip side it could go the other way I suppose.

What drop?  The LifeStrategy funds, like most of their peers, have been on the rise steadily throughout the last six weeks since bottoming out in mid October....

He does say if, he’s talking about the future not a drop that has happened recently. 

OP is clearly talking about both future and recent past, i.e. if the former repeats the latter, but my point was that the last few weeks haven't seen a drop in the way that OP apparently (mis)understood.

GazzaBloom

In my opinion, if you are investing for the long term, shovel money in as soon as you can. I DCA my monthly pension contributions as that is how my employer pays me, any money from my annual bonus, that I intend to invest, gets shovelled in, in a lump, the day it's paid.

No fannying around or worrying about timing this or that for me.

awrightson

Gazza there's no danger of you getting splinters from sitting on the fence