Is investing in funds/stocks for <3 yrs a bad idea?

taless

Hi,

I know there is no right or wrong answer to this, we all have different attitudes to risk etc., but is investing in funds/stocks for yrs a bad idea?

All the stocks and shares ISA that I seen seem to advocate a period of at least 5 years.

For your information, the amount I'm thinking of investing is about 3k.

Any ideas and discussions are much welcomed. Thanks!

Mortgage_&_debt_free

Yes, you need to invest for longer than that to account for the peaks & troughs of the market.

If you do make money, and you might, it is less likely than if you invested for a longer period.

In extremis you could invest for 1 day, but you are relying on 1 day's performance to make you money so it is higher risk.

dunstonh

You can invest for 12 months if you wish. The shorter the term, the higher the risk. As most people in the UK are not experienced investors, the 5 year time scale is recommended as a minimum but in reality its up to you.

nrsql

Over the past 3 years it probably would have been a good idea (depending on what you bought).
Over the last 8 years it might not have been.

Who know what will happen in the future?

You can reduce the risk by making a monthly investment rather than a lump sum - that'll help if you are investing at a peak (but reduce the profit if you are at the bottom).

sho_me_da_money

I havent invested as of yet but i am seriously considering oputting 3K into a stocks and shares ISA and have it managed by HL.

I do know somebody who invested 7K in year 2000 with American Technologies and her money doubled in one year. The came September 2001 and her money is now worth £600.00

Personally, i would invest but always keep an eye on how your money is doing. Once you double - just pull out and go back in with 3K again,

Greed is a b****** but if you set a figure in your head that your happy to pull out with, then stick to it.

Just to get my 2 cents in - anyone got a Hrgreaves Lansdown account? If so - is it best to have them multi manage your funds and have them throw it into the stocks and shares they feel are good as opposed to hand picking your own?

Aegis

sho_me_da_money wrote: »

I havent invested as of yet but i am seriously considering oputting 3K into a stocks and shares ISA and have it managed by HL.

Just make sure you can afford to live without your money for anything up to 5 years. That way you are much less likely to panic and pull your money out at a loss right before abig recovery

I do know somebody who invested 7K in year 2000 with American Technologies and her money doubled in one year. The came September 2001 and her money is now worth £600.00

Very unfortunate... I hope she had a more diversified portfolio than just tech stocks at the time. A lot of people lost a lot of money by not diversifying enough during that particular crash.

Personally, i would invest but always keep an eye on how your money is doing. Once you double - just pull out and go back in with 3K again,

Well, that's one way to do it. Another way would just be to decide on an investment strategy involving a diverse investment portfolio, then to rebalance it when the figures vary sufficiently from your initial investment. This way you lock in gains from high risk assets by diversifying into lower/different risk ones.

Greed is a b****** but if you set a figure in your head that your happy to pull out with, then stick to it.

I don't personally have a figure. My money's just in for growth until I pick a goal for it.

Just to get my 2 cents in - anyone got a Hrgreaves Lansdown account? If so - is it best to have them multi manage your funds and have them throw it into the stocks and shares they feel are good as opposed to hand picking your own?

I have a HL account. They're excellent for investing in unit trusts and OEICs, so I would very much recommend them if this is your strategy.

Their multi-manager funds are supposed to be quite good for multi-manager funds... the trouble is that effectively you end up being charged two lots of management fees, which can limit the potential growth compared to picking your own funds. The plus side is that with a manager picking funds for you, you have to pay very little attention to your portfolio, occasionally checking up on it would be fine.

Have a read through the rest of the forum, especially threads like the "how do I choose a S&S ISA" thread in the ISA forum.