Every month I buy into VWRP (accumulating) index fund at all time highs and I'm sick of it.

[Deleted User]

masonic said:

[Deleted User] said:

george4064 said:

Your post is very good evidence (along with lots of others) that time in the market by investing as much as you can as soon (or simply a lump sum) beats drip feeding.

If you’re investing as much as you can afford to invest each month, then I don’t see why you’re complaining as there’s nothing you can do about it (assuming you’re investing as much as you can afford to do so).

Drip feeding? You mean pound / dollar cost averaging? Isn't that the way you're meant to invest long term?

It is if the money you are investing is coming to you as a monthly income. That's the fastest way to get your money invested.

It does seem odd, looking at the YTD price chart that you've missed all of the dips (August and September for example), but even if you did, in 20 years, the difference between £109 and £90 isn't going to seem significant. If you've been continuously buying at new all-time highs, then you'll have bought low in the first year. Your issue seems to be disbelieving your average price is your average price.

On the Trading212 app it shows my average as being £89.53. Maybe I am misremembering or having selective memory but it sure as hell feels like whenever I buy the price is either at all time highs or ~1% from it. 

Martico

You've invested, your investments are now worth more than when you invested. You are winning.

EthicsGradient

[Deleted User] said:

george4064 said:

Your post is very good evidence (along with lots of others) that time in the market by investing as much as you can as soon (or simply a lump sum) beats drip feeding.

If you’re investing as much as you can afford to invest each month, then I don’t see why you’re complaining as there’s nothing you can do about it (assuming you’re investing as much as you can afford to do so).

The remaining money I lump summed into VWRP and then with each proceeding pay check I took what I had left after rent, bills, food etc and bought as many shares as I could. 

I have done this since exactly 14th June 2022. And since that time the market is up 39% but because I've been consistently buying at ever higher prices, my average return has been less, currently 22%.

This is the point I'm making... Because the market is constantly going up it drags my average UP, which I know is to be expected but I would like to at least have 6 months or 1 year where I'm buying low so my average feels more like the average.

No, your average return has been less than 22% because much of your investment has been there for significantly less than the 2 years 4 months than was needed to get 39%. I mean, no one can realistically hope that the price of their chosen investment would stay more or less flat for 28 months, and then shoot up about 39% in one month.

If you want to know the actual equivalent annualised rate of return you've got so far, use the XIRR function in a spreadsheet - you put in the list of dates, the amount you put in each time, and the current worth, and it gives you a figure, which is what you'd need as a constant rate of interest to achieve the same return from the same investments.

Hoenir

[Deleted User] said:

Hoenir said:

[Deleted User]  Is VWRP your only investment ? 

Yes, I'm not smart enough or comfortable enough to risk picking individual stocks. So I just buy a global index fund. 

You've opted for a high risk potentially volatile strategy though. Presumably your decision was based on recent past performance. A sure fire way of riding a roller coaster in the decade that lies ahead. Active investment requires a strong nerve and emotional detachment. Nor does it guarantee that you'll arrive at your destination any quicker. 

[Deleted User]

Hoenir said:

[Deleted User] said:

Hoenir said:

[Deleted User]  Is VWRP your only investment ? 

Yes, I'm not smart enough or comfortable enough to risk picking individual stocks. So I just buy a global index fund. 

You've opted for a high risk potentially volatile strategy though. Presumably your decision was based on recent past performance. A sure fire way of riding a roller coaster in the decade that lies ahead. Active investment requires a strong nerve and emotional detachment. Nor does it guarantee that you'll arrive at your destination any quicker. 

How is investing in a global diversified index fund that tracks several countries across several sectors and is denominated in my own currency considered high risk? It's basically the safest form of investing you can get outside of bonds... But who in their right mind picks bonds when their investment horizon is 25 years?

I'm not exposed to any one country, any one sector or anyone stock and I'm not exposed to currency exchange rates because the fund is in GBP. Tell me a safer strategy that isn't bonds and I'm all ears.

eskbanker

[Deleted User] said:

Hoenir said:

[Deleted User] said:

Hoenir said:

[Deleted User]  Is VWRP your only investment ? 

Yes, I'm not smart enough or comfortable enough to risk picking individual stocks. So I just buy a global index fund. 

You've opted for a high risk potentially volatile strategy though. Presumably your decision was based on recent past performance. A sure fire way of riding a roller coaster in the decade that lies ahead. Active investment requires a strong nerve and emotional detachment. Nor does it guarantee that you'll arrive at your destination any quicker. 

How is investing in a global diversified index fund that tracks several countries across several sectors and is denominated in my own currency considered high risk? It's basically the safest form of investing you can get outside of bonds... But who in their right mind picks bonds when their investment horizon is 25 years?

I'm not exposed to any one country, any one sector or anyone stock and I'm not exposed to currency exchange rates because the fund is in GBP. Tell me a safer strategy that isn't bonds and I'm all ears.

Being 100% in equities is high risk, given the potential for substantial losses - sure, well-diversified instruments are better than individual stocks, but Vanguard rates this ETF as 6 on their risk scale of 1 to 7.  Bonds are traditionally used to dampen volatility and don't require a 25 year horizon if you're buying into bond funds rather than individual ones, so a multi-asset approach of equities and bonds (or cash) is generally considered to be less risky than being fully committed to equities, but much depends on an individual's own objectives, strategy, timescales, risk tolerance, etc.

P.S. You don't avoid currency risk with a global fund that happens to be denominated in your own currency!

masonic

The OP talks a good game, so it is unclear whether the volatility of 100% equities is a problem or not. That remains to be tested given market performance to date.

But it is not a good thing to find out you can't stomach your existing holdings falling 50% to achieve the £50 sale price you seek.

PropertyGuru_Wannabe

Wait till we have a crash decade like in 2000 - 2010 where your returns would be less than Inflation for those 10 years. Great, you bought low…but the price is still low and you’re losing money every day. How does that make you feel?

Swipe

PropertyGuru_Wannabe said:

Wait till we have a crash decade like in 2000 - 2010 where your returns would be less than Inflation for those 10 years. Great, you bought low…but the price is still low and you’re losing money every day. How does that make you feel?

And that the final price in 30 years time and cumulative value of their portfolio is much lower than it would have been due to the lost decade dragging down overall performance in the long run.

Ivkoto

If you think, that every month when you buying the fund is at its highest price ( which I doubt it is ), then change the date of doing so. Wait few days or weeks before buying, but at the same time you may miss the best green trading days and statistic shows, you may lose a lot more in a long run, because of it.
You'll definitely have a lot of chances to buy lower in the next 20 years, but it would be better to have extra cash, when the prices are lower to bring your average price lower. Like most of us, you can do only DCA, which is not a bad thing, but it is working the best, when there are crashes, corrections, bear markets etc.