Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • henryandmay
    • By henryandmay 9th May 18, 4:27 PM
    • 50Posts
    • 8Thanks
    henryandmay
    Bear market
    • #1
    • 9th May 18, 4:27 PM
    Bear market 9th May 18 at 4:27 PM
    I'm new to investing and was wondering; why would someone invest today when tomorrow the same investment might be a fraction of today price?

    All the sound bites I'm reading; there is a 40% correction on the horizon?

    thanks
Page 2
    • PuzzledDave
    • By PuzzledDave 10th May 18, 6:46 PM
    • 153 Posts
    • 727 Thanks
    PuzzledDave
    But then why not hold out for the crash? Same stock cheaper price., or am I missing something?
    Originally posted by henryandmay
    Can I introduce you to the house price crash folks ? They are waiting for the same thing, the inevitable crash of house prices so they can buy cheap.

    They have been waiting 16+ years. They now cannot break even.... even if house prices hit 0 per sq meter.
    • bostonerimus
    • By bostonerimus 10th May 18, 7:01 PM
    • 2,253 Posts
    • 1,558 Thanks
    bostonerimus
    But then why not hold out for the crash? Same stock cheaper price., or am I missing something?
    Originally posted by henryandmay
    If you only buy when there's a crash can you tell me when you will sell? If I had a crystal ball I could work out how to maximize my returns, but I don't and only fools believe that they can consistently make money timing the market.
    Misanthrope in search of similar for mutual loathing
    • Treesie
    • By Treesie 12th May 18, 5:34 PM
    • 52 Posts
    • 8 Thanks
    Treesie
    But then why not hold out for the crash? Same stock cheaper price., or am I missing something?
    Originally posted by henryandmay
    You could ... if you knew when it was and which stocks were the right stocks. There is no easy way to become rich on the stock market.
    • sixpence.
    • By sixpence. 13th May 18, 11:56 AM
    • 138 Posts
    • 31 Thanks
    sixpence.
    While I agree with the comments here, I also empathise with the OP.

    I am about to stick 3K in a fund (because the money has come available to me now). I know I should stick it in straight away, but it is tempting to wait, even 6 weeks or so, for that fund to drop a few percent. Right now it's almost the highest it's ever been and that feels intimidating.
    • Prism
    • By Prism 13th May 18, 12:11 PM
    • 471 Posts
    • 386 Thanks
    Prism
    While I agree with the comments here, I also empathise with the OP.

    I am about to stick 3K in a fund (because the money has come available to me now). I know I should stick it in straight away, but it is tempting to wait, even 6 weeks or so, for that fund to drop a few percent. Right now it's almost the highest it's ever been and that feels intimidating.
    Originally posted by sixpence.
    Agreed, its impossible to judge. In february I added 10K to my Scottish Mortgage holding after a 5% drop. In the next couple of days it dropped another 7%. From the lowest point it is now up 20% however I am up about 13%. Around this time in february there were commentators saying that this was the begining of the crash.

    It is guesswork trying to find the bottom (I wasn't really trying but the opportunity came up much like you). Had I not taken the risk then I wouldn't be currently 1300 better off just from this one investment. It could all go terribly wrong tomorrow. I plan on keeping this for 15 more years so that worry about a 7% difference will be irrelevent soon
    Last edited by Prism; 13-05-2018 at 12:14 PM.
    • ValiantSon
    • By ValiantSon 13th May 18, 12:12 PM
    • 2,537 Posts
    • 2,509 Thanks
    ValiantSon
    While I agree with the comments here, I also empathise with the OP.

    I am about to stick 3K in a fund (because the money has come available to me now). I know I should stick it in straight away, but it is tempting to wait, even 6 weeks or so, for that fund to drop a few percent. Right now it's almost the highest it's ever been and that feels intimidating.
    Originally posted by sixpence.
    It could rise a few percent in those six weeks too. The whole point is that you don't know and, over time, the ups and downs of the market are likely to even out. You are better off putting the money in now, if you are going to keep the investment for a decent length of time.
    • sixpence.
    • By sixpence. 13th May 18, 1:03 PM
    • 138 Posts
    • 31 Thanks
    sixpence.
    Yeah I think the solution is to hold investments for a long time (10-15 years at least) and that way the unpredictable fluctuations of the market will be less significant.

    It could rise a few percent in those six weeks too. The whole point is that you don't know and, over time, the ups and downs of the market are likely to even out. You are better off putting the money in now, if you are going to keep the investment for a decent length of time.
    Originally posted by ValiantSon
    Yeah but it was also be so great if the market dropped 5% in that time. Like you say though, it is impossible to know.
    • capital0ne
    • By capital0ne 13th May 18, 2:25 PM
    • 531 Posts
    • 260 Thanks
    capital0ne
    I'm new to investing and was wondering; why would someone invest today when tomorrow the same investment might be a fraction of today price?

    All the sound bites I'm reading; there is a 40% correction on the horizon?

    thanks
    Originally posted by henryandmay
    You're absolutely correct, a 40% correction is coming, so best to wait............

    hang on a mo, it's a year on and it hasn't happened, but.......

    I think I'll just wait a bit longer..........

    10 years later the 40% crash happens, so pile your devalued money in right away......

    That feels really good, I saved loads didn't I?

    Well no, in those past 10 years the FTSE100 has risen 81.5% with divis reinvested - happy days, but then all us experts on MSE know this and just stay in the market through thick and thin to build huge portfolios. Good luck
    • dividendhero
    • By dividendhero 13th May 18, 2:54 PM
    • 263 Posts
    • 275 Thanks
    dividendhero
    While I agree with the comments here, I also empathise with the OP.

    I am about to stick 3K in a fund (because the money has come available to me now). I know I should stick it in straight away, but it is tempting to wait, even 6 weeks or so, for that fund to drop a few percent. Right now it's almost the highest it's ever been and that feels intimidating.
    Originally posted by sixpence.

    I'd suggest you "drip feed".

    Invest 1k now (or tomorrow as it's Sunday today!)
    Another 1k in 6 weeks
    remaining 1k 6 weeks later.

    I'ts easier to take baby steps this way and you know effects of any price fluctuations will be reduced
    • sixpence.
    • By sixpence. 13th May 18, 2:59 PM
    • 138 Posts
    • 31 Thanks
    sixpence.
    I'd suggest you "drip feed".

    Invest 1k now (or tomorrow as it's Sunday today!)
    Another 1k in 6 weeks
    remaining 1k 6 weeks later.

    I'ts easier to take baby steps this way and you know effects of any price fluctuations will be reduced
    Originally posted by dividendhero
    Yeah I think I'll do this. I had 9K to put in my VLS in January and I'm so glad I drip fed it because the fund dropped about 5%.

    But, of course drip feeding doesn't actually make tactical sense and is mostly psychological, right?
    • ValiantSon
    • By ValiantSon 13th May 18, 3:03 PM
    • 2,537 Posts
    • 2,509 Thanks
    ValiantSon
    Yeah I think I'll do this. I had 9K to put in my VLS in January and I'm so glad I drip fed it because the fund dropped about 5%.

    But, of course drip feeding doesn't actually make tactical sense and is mostly psychological, right?
    Originally posted by sixpence.
    Yes, it is psychological. Lump sums are likely to outperform drip-feeding.

    All those losses on VLS have now recovered.
    • Joe_Bloggs
    • By Joe_Bloggs 13th May 18, 3:06 PM
    • 4,448 Posts
    • 1,564 Thanks
    Joe_Bloggs
    @sixpence.
    If you throw your money in to global investments funds whilst the pound is at rock bottom you will get a considerable exposure to global foreign currency valuations of the pound.
    The pound valuation of the globally priced investment will decrease if the pound rises as a traded currency and also increases as the pound falls. This is nothing new but it is a personal irritation .


    I cannot see Brexit adding to the strength to the value of the pound

    J_B.
    Last edited by Joe_Bloggs; 13-05-2018 at 3:27 PM. Reason: clarity
    • jamei305
    • By jamei305 13th May 18, 3:19 PM
    • 357 Posts
    • 422 Thanks
    jamei305
    @sixpence.
    If you throw your money in to global investments funds whilst the pound is at rock bottom you will get exposure to global foreign currency valuations that will value the investment lower when the pound rises and then value it higher when the pound falls. This is nothing new but it is a personal irritation .
    Originally posted by Joe_Bloggs

    When is the pound at "rock bottom"? For example, it might currently be the highest it will be for twenty years.
    • dunstonh
    • By dunstonh 13th May 18, 3:20 PM
    • 94,490 Posts
    • 62,438 Thanks
    dunstonh
    Yeah I think I'll do this. I had 9K to put in my VLS in January and I'm so glad I drip fed it because the fund dropped about 5%.
    Statistically, most phased investments result in lower returns than those that invest on day 1.

    So, whilst it worked before, will it work again? The odds are against you. But you never know.

    There is also the issue that if you are worried about this sort of thing, are you really investing within your risk profile?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • jimjames
    • By jimjames 13th May 18, 3:29 PM
    • 12,741 Posts
    • 11,429 Thanks
    jimjames
    You could ... if you knew when it was and which stocks were the right stocks. There is no easy way to become rich on the stock market.
    Originally posted by Treesie
    I think you're wrong. I'm not sure if you missed out the word "quick". There is a very easy way to become rich and that's to invest long term and let compounding do its work.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • sixpence.
    • By sixpence. 13th May 18, 4:02 PM
    • 138 Posts
    • 31 Thanks
    sixpence.
    Statistically, most phased investments result in lower returns than those that invest on day 1.

    So, whilst it worked before, will it work again? The odds are against you. But you never know.

    There is also the issue that if you are worried about this sort of thing, are you really investing within your risk profile?
    Originally posted by dunstonh
    I'm would say I'm worried about it to be honest. I just want to get the best deal I can, which, ironically, as you say, means investing it in a lump sum.
    • sixpence.
    • By sixpence. 13th May 18, 4:10 PM
    • 138 Posts
    • 31 Thanks
    sixpence.

    All those losses on VLS have now recovered.
    Originally posted by ValiantSon
    Yup, and I've had more growth because I bought low
    • Thrugelmir
    • By Thrugelmir 13th May 18, 5:02 PM
    • 59,784 Posts
    • 53,125 Thanks
    Thrugelmir
    Agreed, its impossible to judge. In february I added 10K to my Scottish Mortgage holding after a 5% drop. In the next couple of days it dropped another 7%. From the lowest point it is now up 20% however I am up about 13%. Around this time in february there were commentators saying that this was the begining of the crash.
    Originally posted by Prism
    With SMT's 4 largest holdings amount to some 30% of the portfolio. Worth knowing what you are actually indirectly investing in. As it bears little correlation to many market indices.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Prism
    • By Prism 13th May 18, 5:38 PM
    • 471 Posts
    • 386 Thanks
    Prism
    With SMT's 4 largest holdings amount to some 30% of the portfolio. Worth knowing what you are actually indirectly investing in. As it bears little correlation to many market indices.
    Originally posted by Thrugelmir
    Its quite a bit more consumer focused than many other funds but its still pretty much in correlation with the global index (FTSE or MCSI). If there is a down side too it I would say that its lacking in defensive equities - I have other funds for that.

    I absolutely agree you should know what you are invested in with these high conviction managed funds.
    • capital0ne
    • By capital0ne 13th May 18, 6:45 PM
    • 531 Posts
    • 260 Thanks
    capital0ne
    I'd suggest you "drip feed".

    Invest 1k now (or tomorrow as it's Sunday today!)
    Another 1k in 6 weeks
    remaining 1k 6 weeks later.

    I'ts easier to take baby steps this way and you know effects of any price fluctuations will be reduced
    Originally posted by dividendhero
    Unless of course the market goes up say 5% in the next 6 weeks, then what, hold off on the Next 1k

    And 6 weeks later it falls 10% then what add 2k or just 1k in case it falls further.

    Don't muck around, invest the full 3k tomorrow. Leave it for at least 3 years.
    If you can't do that investing isn't for you. And I guess that means a pension isn't for you either because that will be invested in the market that could fall.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

2,138Posts Today

8,608Users online

Martin's Twitter