Re-balance into Equities

valiant24

There's no right answer to this, except in hindsight ...!

I took some profits ahead of the budget, and sold an equity managed fund that I'd had for many years, and had quintupled my investment.  (In fact, the CGT rise was not as high as expected, but it was still a good time).

So I am now sitting on a| sizeable pile of cash. In order to keep my 60% equities balance I should put a large sum (hundreds of thousands) back into equities.

I'm quite the disciple of Lars Kroijer etc, so it should be global trackers.  His ethos is that no-one knows anything, and you should never try to time the market, so by his rules I should bang the whole lot into VWRP or similar tomorrow.

But it just doesn't seem like a good time to do so, with the US market (almost 70% of most global trackers) close to all-time-high valuations.

I know that many here are experts on what other people should do ;-).   What should I do?

Thanks
V

eskbanker

valiant24 said:

But it just doesn't seem like a good time to do so, with the US market (almost 70% of most global trackers) close to all-time-high valuations.

But the long term growth trend of equities is that they'll often, perhaps even usually, be at all time highs, as seen on a typical S&P500 tracker:

IvanOpinion

I remember reading somewhere that markets/indexes spend about a third of their time at all-time highs. Assuming you are looking at a long term investment (10+ years) then you should be fine. If you are concerned you could try drip-feeding the money in on a monthly basis, but historically that has given a lesser overall return.

ColdIron

You'll be buying high but then you sold high so, a few weeks aside, it should balance out

Bobziz

eskbanker said:

valiant24 said:

But it just doesn't seem like a good time to do so, with the US market (almost 70% of most global trackers) close to all-time-high valuations.

But the long term growth trend of equities is that they'll often, perhaps even usually, be at all time highs, as seen on a typical S&P500 tracker:

Isn't the word valuations important ? I.e. it's not the price being at an all time high, it's the CAPE ratio, and I believe I'm right in saying that the CAPE ratio has only been higher twice, dot.com and the 29 depression.

eskbanker

Bobziz said:

eskbanker said:

valiant24 said:

But it just doesn't seem like a good time to do so, with the US market (almost 70% of most global trackers) close to all-time-high valuations.

But the long term growth trend of equities is that they'll often, perhaps even usually, be at all time highs, as seen on a typical S&P500 tracker:

Isn't the word valuations important ? I.e. it's not the price being at an all time high, it's the CAPE ratio, and I believe I'm right in saying that the CAPE ratio has only been higher twice, dot.com and the 29 depression.

Share price quite literally values a company, but yes, other measures are available!

Ivkoto

According to this chart ⬇️, you should not think too long 







And here ⬇️ something, about US

masonic

Bobziz said:

Isn't the word valuations important ? I.e. it's not the price being at an all time high, it's the CAPE ratio, and I believe I'm right in saying that the CAPE ratio has only been higher twice, dot.com and the 29 depression.

It was also higher than it is today in mid-late 2021, and likewise wasn't a good time to enter the market. Nowhere near the highs Japan reached before its market collapse though. Meanwhile the rest of the world (barring India and a couple of other places) is looking much better value, as are some sectors of the US market. Make of that what you will.

InvesterJones

Well you can either take the collective wisdom of all investors and just buy a global index (all world is at what, about a 17.55 P/E so still quite a lot of room for less expensive equities to grow), or if you're certain that one particular market will under/over perform, you can go against collective wisdom and tweak it yourself by titling away from global (personally if doing that, I'd still take a global core, and just add another fund to achieve the tilt - whether that's a global ex-US or a particular region/factor you think will do better). Still get it in asap though.

valiant24

masonic said:

 Meanwhile the rest of the world (barring India and a couple of other places) is looking much better value, as are some sectors of the US market. Make of that what you will.

What should I make of it?

valiant24

InvesterJones said:

 I'd still take a global core, and just add another fund to achieve the tilt - whether that's a global ex-US or a particular region/factor you think will do better). 

In what proportion?