How do you invest the money you make?

[Trader Pat]

Wine, Women and Song

... and you squander the rest.

To be fair I squandered it on wine too. I've drank many bottles but still cant tell the difference between them if I don't see the label!

[firlandsfarm]

You are making a fundamental mistake in your figures that people often make.

You are just looking at the headline FTSE 100 figure and disregarding the fact that if you hold it as a fund you would also receive dividends which are then reinvested.

I'm sorry but I am not making any mistake, bull and bear conditions refer to capital growth, dividends refer to income ... now that is a fundamental mistake to confuse that. So you would say I don't care my investments have dropped by 73% in value I've had the income!! Really!!

I personally would not suggest holding just the FTSE 100

I can't recall ever suggesting just holding the FTSE100. What I did was to use it as an example ... it's a popular way to explain a point!

Weekly and monthly aren't short term Really?

When used as candles no, they are not short term. Do you know what I mean by "candles"? It is probably the most popular chart form used in investment. A month candle compresses a whole month's price action into a single bar that resembles a candle, hence the name. So you would use a graph of monthly candles to view say 5 years or more of price movement and the weekly candle for say 1 - 5 years. So you see 5 years plus as short term Really?

Yes, as I said before, just keeping dollar cost averaging no matter what the market does. Don't even look at your returns (if you can manage that).

Fidelity did a study, guess which class of people did the best? Dead people, because they just held on whatever the market was doing.

Yes I agree with averaging but why not move it in your favour ... Warren Buffet tells you to do the reverse so when the market is high and the lemmings are investing because it's buoyant you sit on your cash and when the market is low because the lemmings are selling you buy. I doubt that Mr Buffet will make more money dead than alive!

Something else that hasn't been mentioned so far is home bias. Think about how exposed you already are to your countries performance. Most people are hugely over weight with regards to their home country, they own a home, they earn a living and then often invest in their own country ahead of other countries. Less of an issue if you are American due to the nature of there economy, more of an issue if you are in the UK.

USA, UK, Europe, Australia, Asia ... there is only one strategy ... keep your assets in the same proportion to your liabilities. If you spend £'s then keep £'s why bring another variable into it by introducing an element of forex. It's not unusual for the assets to grow in the local currency but fall in value when converted to the home currency.

[firlandsfarm]

To be fair I squandered it on wine too. I've drank many bottles but still cant tell the difference between them if I don't see the label!

Too true my man, too true I don't give a flyingF what the label says nor how cheap, my only concern is did I like it.

[PDC]

I'm sorry but I am not making any mistake, bull and bear conditions refer to capital growth, dividends refer to income ... now that is a fundamental mistake to confuse that. So you would say I don't care my investments have dropped by 73% in value I've had the income!! Really!!

Each to their own, I look at total return as that is what my investment returns me.

Roughly over the last 20 years:

Jan 2000 the FTSE 100 was at 6,930
Today the FTSE 100 is at 7,404
Return = 7%

Total return in that period has been 86%.

I always go for accumulation rather than income when selecting my funds as I am in the accumulation stage of life still and I am not sure I will ever switch to the income version of the funds for various reasons.

Kind of on this subject I listened to a 2 part debate about Dividend investing recently which might be of interest to others:

https://www.choosefi.com/dividend-investing/

https://www.choosefi.com/learn-more-abo ... investing/

I personally would not suggest holding just the FTSE 100

I can't recall ever suggesting just holding the FTSE100.

You recall correctly, the clue was in the use of the words "personally" and "I". I was talking about what "I" would not do "personally"

When used as candles no, they are not short term. Do you know what I mean by "candles"? It is probably the most popular chart form used in investment.

Unfortunately I do know all to well about candles, I wasted a lot of time and money on technical analysis buying and studying books such as Japanese Candlestick Charting Techniques: A Contemporary Guide to the Ancient Investment Techniques of the Far East and Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications and then I learned more and no longer bother with such stuff.

why not move it in your favour ... Warren Buffet tells you to do the reverse so when the market is high and the lemmings are investing because it's buoyant you sit on your cash and when the market is low because the lemmings are selling you buy.

Thats what he does and continues to do so. It could be argued he has given up a lot of returns by sitting on his huge cash pile. Yes he is ready to buy when things go on sale but in the meantime there is an opportunity cost to what he does.

I ain't no Warren Buffett so I won't be adopting his approach I will instead go with his advice that most investors will not be able to achieve this and instead should just keep on dollar cost averaging. That way I don't have to worry myself about timing the market on the way in and out multiple times. I will buy at the top and I will buy at the bottom and every step in between.

At what point in the last decade did people think the market was high and started to sit on cash? Or are they fully invested still? Did they manage to call the bottom of the 2008 crash? Where are we now in the cycle? Where were we at the start of 2019, the market had just been falling was it going to continue to fall or did they see the turn around coming and yet more all time highs being hit month after month. I know I didn't, I have been saying for ages that it can't surely keep going up yet it has. But ultimately I don't care, I don't make my investing decisions based on what I think will or won't happen.

I know that I can't time the market over the long term and don't attempt to, I did use to but learned from that. I just wish I learned much sooner that market timing is pointless and will leave (in almost all cases) to under performance v the market average. Also by remaining invested you avoid the additional costs and tax events that buying and selling can lead to.

Perhaps you are one of the few that can keep calling it right time and again, if you are fair play to you, you are one of the very few who can keep doing it year in year out. It is a very very select club. Say hi to Warren for me next time you have lunch with him

This is an interesting article about dollar cost averaging v lump sum investing, personally I don't feel comfortable with going all in when I come into a lump sum. I know I should do it but it doesn't pass the sleep test for me. I would be kept awake worrying about it, I am therefore willing to give up some potential returns for a better nights sleep.

"Invest now or temporarily hold your cash? "

https://personal.vanguard.com/pdf/ISGDCA.pdf

there is only one strategy ... keep your assets in the same proportion to your liabilities. If you spend £'s then keep £'s why bring another variable into it by introducing an element of forex. It's not unusual for the assets to grow in the local currency but fall in value when converted to the home currency.

Each to their own, but the greater diversification and growth potential that investing in foreign funds brings more than out weighs the exchange rate variability, for me.

A YouTube channel that I really like and have learned a lot from is by PensionCraft, he produces a weekly video and I would highly recommend following the channel, still waiting on Peter Webb's finance YouTube channel that he keeps hinting at launching:

https://www.youtube.com/channel/UC9OIwU ... XGw/videos

Ultimately, people have to do what is right for them. What was/is right for me won't be right for you. What I think is right for me may be wrong when I look back in years to come when I have better knowledge and understanding. I wish I knew back in the past what I know now such as that trying to time the market and pick individual stocks would lead to under performance. The way I put it is I can roll a 4 every time, or I can have the chance of rolling a 5 or 6 if I put in a lot of extra time and effort but even if I do I could easily still roll a 1, 2 or 3.

I will take the 4 every time and spend my time and effort on other things that are more productive and useful to me.

[PDC]

Anyone tried apps like wealthify, moneybox?
Seems easy and low fees, if you dont want to put too much effort into it, you can select your risk level, seems to be popular and good reviews, maybe a good solution.
Overall im down 30% on stocks, so been a waste of time for me

I haven't used those apps but this video might be of interest (it is from May 2017). My preference is Vanguard though you can potentially get lower fees elsewhere but for the small savings I am happy to stick with them and I have found their customer service to be very good.

Review of Wealthify: Opening an Account

https://www.youtube.com/watch?v=9pgr0J-sv5Y

You might also find these 3 videos of interest Rik about Robo advisors as a bit of a starting point to investigating them further:

ROBO-ADVISORS: Should You Invest with Them for Financial Independence? | Our Warning
https://www.youtube.com/watch?v=fVGKrmNDQ7A

Betterment vs. M1 Finance vs. Acorns | Which Robo-Advisor is Better (Battle of the 'Bots)
https://www.youtube.com/watch?v=E6pvVpX6PE0

Vanguard vs Best Investing Apps (M1, Betterment & Acorns) | See Our Results With Real Investments
https://www.youtube.com/watch?v=mrojJV04Oa8

Only use those links as a starting point.

[PDC]

I thought the newly released (yesterday) Berkshire/Buffett letter might be of interest to the thread:

https://www.berkshirehathaway.com/letters/letters.html

Some commentary:

Berkshire’s stock rose 11% in 2019 compared with a 31.5% total return in the S&P 500, including dividends—Berkshire’s biggest underperformance since 2009.

Buffett has long said that investors should focus on companies’ long-term performance and ignore shorter-term fluctuations in the stock market.

Berkshire increased its buybacks in the fourth quarter to $2.2 billion, bringing its total repurchases for the year to $5 billion, the company said. That still barely dented the company’s huge pile of cash, which totaled $128 billion as of Dec. 31, the company said Saturday, slightly down from a record $128.2 billion at the end of the third quarter.

In his letter, Buffett lamented the difficulty of finding attractively priced acquisition targets that are big enough to move the needle for Berkshire.

“The opportunities to make major acquisitions possessing our required attributes are rare,” he said.

“I think there’s more capacity for buybacks,” said James Shanahan, senior equity-research analyst at Edward Jones. “It’s no doubt that the significant outstanding cash balances have been an extraordinary drag on earnings.”

[wearthefoxhat]

Is the FTSE100 about to retrace?

FTSE100Feb26.png

[wearthefoxhat]

Not yet anyway....

FTse100Feb262.png

[wearthefoxhat]

Maybe now...

FTSE11am.png

[wearthefoxhat]

By comparison, the EUR/GBP forex pair....

EUR+GBP.png

[wearthefoxhat]

FTSE100 close of play....

FTSE26Close.png

Just call me; "Bobby fooking Axelrod"....

voice.png

[LinusP]

The thread has ‘invest’ in the title titled not gamble

[wearthefoxhat]

The thread has ‘invest’ in the title titled not gamble

True....but...

one life.png

[firlandsfarm]

To all you investment gurus out there … if you can translate and understand this you will make a fortune!

In response to questions as to whether 'the Feds' will step in and help the markets after the Coronavirus downturn …

Coronavirus.JPG

Anyone want to have a go at translating it?

[marksmeets302]

To all you investment gurus out there … if you can translate and understand this you will make a fortune!

In response to questions as to whether 'the Feds' will step in and help the markets after the Coronavirus downturn …

Coronavirus.JPG

Anyone want to have a go at translating it?

Sure, it just means that because of the downturn in the stock market, parties have to deleverage. Meaning: they have to sell even more holdings, which will likely cause the stock market to go down even more. Gamma can be seen as a number by which your positions value accelerates, both up and down, compared to an underlying. In this case the stock market itself.

A very nice example of this was last Thursday: the stock market closed at a level that triggered the deleveraging. The futures were still open for another hour and there you saw massive selling.
With sentiment so extremely negative it could very well be that a short term bottom is very near, or we already saw one on Friday. Don't panic