How do you invest the money you make?

[ShaunWhite]

What a small world we live in.

Sometimes it doesn't take all six degrees of seperation I guess. But at times like this, even six seems too close for comfort. https://en.m.wikipedia.org/wiki/Six_deg ... separation

[ShaunWhite]

Decent little FTSE bounce today, still hard to contemplate it was nudging 7,500 this time last year.

[PDC]

Why timing the market is so hard:

Stock market news live: Dow posts best weekly gain since 1938, despite Friday drop

Steep gains made earlier in the week still sent the Dow up a total of 12.8% for the week, for its best weekly gain since 1938. The S&P 500 rose 10.3% for its best weekly gain since 2009.

https://finance.yahoo.com/news/stock-ma ... 09874.html

While also this week:

Record number of Americans file for unemployment

Nearly 3.3 million people registered to claim jobless benefits for the week ended 21 March, according to Department of Labor data.

That is nearly five times more than the previous record of 695,000 set in 1982.

https://www.bbc.co.uk/news/business-52050426

To those on here that are able to time the market twice, both when they sell and buy hats off to you. But:

Suppose you did get spooked last year, and you gave up by selling off your positions, trading your investments for cash. Eventually you'll get back in the market when the worst is over, you tell yourself. That sounds like a reasonable strategy. However, waiting it out also means potentially missing some very big up days in the market, which makes an enormous difference in your portfolio's performance over time.

Time in the market, versus time out of the market - J.P. Morgan Asset Management's 2019 Retirement Guide shows the impact that pulling out of the market has on a portfolio. Looking back over the 20-year period from Jan. 1, 1999, to Dec. 31, 2018, if you missed the top 10 best days in the stock market, your overall return was cut in half. That's a significant difference for only 10 days over two decades!

You don't have to miss many good days to feel the impact. The return went from positive to negative by missing the 20 best days of the market over 20 years.

https://www.fool.com/investing/2019/04/ ... he-st.aspx

[ShaunWhite]

Why timing the market is so hard:

It's why institutional investors prefer to hold assets for either 20yrs or 20 nanoseconds, anything between that is tough going.

[PDC]

based on ongoing market sentiment, i'm sticking with my (personal) opinion from last week (before the big falls), that I would have exited on a stoploss and waited until the markets/ecosystem/social fabric in general had stabalised, rather than continuing to hold while things are falling. I'd (theoretically) wait until it's gone the further 30-40-whoknows% that it will and then buy back in once consolidation begins. you'd still be up on today's (or last week's) prices.

+1

You don't blindly invest each month just because it's the day you invest. You take the market conditions into account … not day to day but by trend. If the market is reasonably stable then carry on as normal but when you see it is in a Bear market you hold back your new money until it seems to have stopped falling and you can buy cheaply.

Please remember to come back and tell us when it seems to have stopped falling and we should start buying at the cheap levels.

Are we still holding off buying into the market, assume so as we haven't yet had the nod to get back in?

Off the lows the markets are:

FTSE100: +19.3%
FTSE250: +32.6%
S&P500: +27.3%
Dow: +30.2%

Damn that dollar cost averaging approach and not trying to time the market, I am glad I ditched it and avoided buying in at the lows as the trend was for it to keep on going down

(P.S. I am not saying it won't fall again and won't fall further than it did before. All I know is that it will either go up, down or stay the same. Though in 20+ years time the markets will more likely than not be higher than they currently are. What stocks will be higher I don't know either, many won't even exist anymore. That is why I don't try to pick the winners and time the market.)

[megarain]

If a lot of companies fail as a result of this or need cash injections, I am thinking of what small businesses will best bounce back.

I can think of a lot of sectors to swerve .. not so many that stand out.

The banks have been battered .. ask a Barclays/LLoyds shareholder how he feels :

Both around GBP6-8.00 in 2000, now v deep in the red at 90p and 35p. Imagine the bad loans will be pretty hard to swallow.

[PDC]

The banks have been battered .. ask a Barclays/LLoyds shareholder how he feels :

Both around GBP6-8.00 in 2000, now v deep in the red at 90p and 35p. Imagine the bad loans will be pretty hard to swallow.

The advantage of broad based index funds, you don't have to worry about these things. Yes you own the dogs where you might lose 100% of your money in that business but you also own the stars where you make many many 100's of % of your money.

Some (Many) people would have you believe they can consistently over the long term, time the market and pick the winners and avoid the losers and beat the market averages after all costs are taken account of. However, there is a reason Warren Buffett is well known and it isn't because so many people are also able to do what he has done.

[arbitrage16]

based on ongoing market sentiment, i'm sticking with my (personal) opinion from last week (before the big falls), that I would have exited on a stoploss and waited until the markets/ecosystem/social fabric in general had stabalised, rather than continuing to hold while things are falling. I'd (theoretically) wait until it's gone the further 30-40-whoknows% that it will and then buy back in once consolidation begins. you'd still be up on today's (or last week's) prices.

+1

You don't blindly invest each month just because it's the day you invest. You take the market conditions into account … not day to day but by trend. If the market is reasonably stable then carry on as normal but when you see it is in a Bear market you hold back your new money until it seems to have stopped falling and you can buy cheaply.

Please remember to come back and tell us when it seems to have stopped falling and we should start buying at the cheap levels.

Are we still holding off buying into the market, assume so as we haven't yet had the nod to get back in?

Off the lows the markets are:

FTSE100: +19.3%
FTSE250: +32.6%
S&P500: +27.3%
Dow: +30.2%

Damn that dollar cost averaging approach and not trying to time the market, I am glad I ditched it and avoided buying in at the lows as the trend was for it to keep on going down

(P.S. I am not saying it won't fall again and won't fall further than it did before. All I know is that it will either go up, down or stay the same. Though in 20+ years time the markets will more likely than not be higher than they currently are. What stocks will be higher I don't know either, many won't even exist anymore. That is why I don't try to pick the winners and time the market.)

Glad you're highlighting the nonsense of this thread because people, if they listen, can genuinely learn something here. Hell, go a bit further and read a book - Tim Hale Smarter Investing is the one you want.

The current market situation is exactly the example that was required to show that the posters on the other side of the argument are wrong. And not just kind of wrong, but 100% wrong and costing themselves significant chunks of money as a result.

The thinking proposed in the quotes highlighted here is at least 15 years out of date. Those investors will still have a decent pot for their retirement, but it is nothing like what they could have earned if they had availed themselves of the data on investment strategy. Their under-performance should serve as a cautionary tale to the rest of us.

[firlandsfarm]

Are we still holding off buying into the market, assume so as we haven't yet had the nod to get back in?

Are you talking to me? If so I don't know what your ramblings are referring to, I never said I would give anyone a nod. And quite frankly your post demonstrates a lack of understanding of investment management! Have a look around the Internet, there are many websites/pages from people more experienced than me who would be happy to educate you.

[arbitrage16]

Are we still holding off buying into the market, assume so as we haven't yet had the nod to get back in?

Are you talking to me? If so I don't know what your ramblings are referring to, I never said I would give anyone a nod. And quite frankly your post demonstrates a lack of understanding of investment management! Have a look around the Internet, there are many websites/pages from people more experienced than me who would be happy to educate you.

I'd love to learn more about that way of thinking. Could you direct me to some sources you've used to further your understanding of this approach please?

[firlandsfarm]

I'd love to learn more about that way of thinking. Could you direct me to some sources you've used to further your understanding of this approach please?

I suggest you ask Messers Google and Bing.

[arbitrage16]

I'd love to learn more about that way of thinking. Could you direct me to some sources you've used to further your understanding of this approach please?

I suggest you ask Messers Google and Bing.

But I'm asking you, clearly. I can provide names and references - Danny Kahnemann for one - who says that the active investing model is nonsense. I'd like you to provide the same for your 'school' of thinking.

If you're unable to do that, it's clear to all that you're talking the same kind of nonsense.

[firlandsfarm]

The current market situation is exactly the example that was required to show that the posters on the other side of the argument are wrong. And not just kind of wrong, but 100% wrong and costing themselves significant chunks of money as a result.

The thinking proposed in the quotes highlighted here is at least 15 years out of date. Those investors will still have a decent pot for their retirement, but it is nothing like what they could have earned if they had availed themselves of the data on investment strategy. Their under-performance should serve as a cautionary tale to the rest of us.

Well I guess the 100%wrongers will have to bow to the superior knowledge of the Alwaysrighters and always be poorer than them ... there is no way I could compete with such a font of 'rightness'. I'm envious that you are so right you are able to predict that your system will win over a 15 year out of date approach. And I'm happy you have your views I'm sure they help you to feel warm and comfortable at night.

[firlandsfarm]

If you're unable to do that, it's clear to all that you're talking the same kind of nonsense.

so you deem a reluctance to waste time on you as a 'victory'. There's nothing more praiseworthy than self congratulation!! ... I refer you to the answer I gave a few posts ago.

[arbitrage16]

If you're unable to do that, it's clear to all that you're talking the same kind of nonsense.

so you deem a reluctance to waste time on you as a 'victory'. There's nothing more praiseworthy than self congratulation!! ... I refer you to the answer I gave a few posts ago.

Ok, so still no sources then. That's telling. And now you're getting personal - the penultimate refuge of the scoundrel.

And I'll refer you to your previous post, which ended "Clearly we are of differing minds so let's just leave it at that. Bye." And something similar you said to PDC - but you can't leave it alone.

That's because you realise the way you've been doing it your whole life has been wrong, and that's hard to deal with. I'm guessing you're 60+? So knowing that if you actually went into the literature - I recommend Smarter Investing by Tim Hale or Thinking Fast and Slow by Danny Kahnemann amongst many, many others - you'd find out that, like so many others, you've been punked by the financial services indusry into believing that active investing is the way to do it.

They've been sucking you dry for years mate, and you didn't even realise it.