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Is it wise to invest in Shares in March 2017

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Halicarnassus
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Re: Is it wise to invest in Shares in March 2017

#47771

Postby Halicarnassus » April 22nd, 2017, 8:04 am

Dumbledore wrote:Hello all,

I am new to investing in shares & stocks. I have noticed that the FTSE 250 is at a 10 year high in March 2017.

Is it sensible to buy shares when the market is booming?

I was thinking that i should wait till the market goes down before i buy any shares for my Share ISA. Is that wise?

Any advice is appreciated.

Thanks.


If you need the money in the next 5 years I would think twice, but that is relevant to investing in shares at any time, not just March 2017. Remember that an index high is precisely where we want it as it has move beyond that to continue it's long term upward trend.

When buying individual shares rather than EFT Indices (like Vanguard) you want to be thinking of it as buying into the company rather than buying shares. Buying a part of a profitable company that has good prospects is much lower risk than buying a share that has been tipped that you know nothing about.

Itsallaguess
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Re: Is it wise to invest in Shares in March 2017

#47790

Postby Itsallaguess » April 22nd, 2017, 9:40 am

Pipsmum wrote:
It is a bit more exciting than a savings account so maybe that will be it's attraction. Not sure yet.

It feels like only semi predictable horse racing to me. I think the ride might be worth it even if I lose. Then at least I can say I tried it instead of wondering if I should. Hopefully one won't lose on everything and all. We'll just see won't we?


Have a look at some of the income-strategies available. As a beginner such as yourself, a few years ago now, I feel that I was very lucky to stumble on The Motley Fool forums when I was looking to start investing seriously, having previously lost a significant sum of money doing it out on my own with no real investment-related knowledge behind me. I found the HYP (High Yield Portfolio) strategy very appealing indeed, with it's focus on dividend-income from a portfolio of equities, rather than looking at growth-based strategies that I felt, at that time, needed a little more focus and attention than I was wanting to give to what was going to be a long, regular-investment period ahead of me.

I can honestly say that it has been one of the best financial decisions I've ever made, and I'm as happy with the HYP strategy today as I was all those years ago when I first began looking at it.

Your analogy with a horse-race is interesting, and I can see why you might currently think that investing in equities is simply a more 'sophisticated' gamble, and nothing more, but even if you're going to think that for a while (and you might, although I expect that view to change if you are able to persist with investing in the market as your experience grows), then you could think of an income-related investment-strategy as a horse-race that hopefully never 'ends' (in terms of the equities you invest in hopefully continuing to operate as an ongoing enterprise), and one that, during the race, pays out regular 'winnings' (in the form of dividends) whilst the race continues to be run....

From a personal point of view, when I first took up the HYP strategy even with relatively small amounts of initial capital, one of the very best things I found was seeing the initial small trickle of regular dividends come back to me from the companies I'd invested in, and, as time went on and I was able to invest regular extra-capital into my portfolio and also re-invest those regular dividends, I saw both the dividends rising simply because in general (and almost certainly on an overall-portfolio basis) the companies I'd invested in do tend to raise their payouts-per-share over time, and also because the amount of capital I continued to have invested was also growing as well, giving me more dividends from extra companies, or more dividends from some of the same companies because I'd invested more in them since the previous years.

This regular stream of dividends gives a starting-out-investor great visibility in the power of income from equities, and the huge influence that compounding-returns has over your portfolio, as last years income is re-invested and goes on to produce even more income next year, over and above that which would be generated anyway, from the original base-capital.

Sticking with this strategy over many years has meant that I've been able to see my income-stream grow significantly from those initial small amounts, and has also given me great confidence that generally and over long periods, income from shares in the form of dividends is much less volatile that the capital value of the shares delivering that income. This is a key point to the HYP income-strategy, and is a real benefit to those of us who prefer to use it, rather than using other, perhaps more growth-based strategies that derive much of their 'income' from selling shares that they hope will rise in value over time, rather than purely delivering income.

I'd never try to suggest that an income-strategy like the HYP one used by many around here is 'better' or 'worse' than a more growth-based strategy, but I would definitely suggest that some people are better suited to one rather than the other, and without a doubt I can say that the HYP income strategy suits me, and I'm very lucky to be able to say that.

One other thing I'd say before ending what's turned out to be a longer post than I initially intended, is to keep an eye on Investment Trusts as well. They can provide some 'instant diversification' in terms of minimising single-(or very small-number-of..)company-risk, especially during the initial build-phase of an equity portfolio. What you may lose in terms of a small margin for IT-management costs, you might gain in 'sleep-at-night-ness' and better diversification in the market, hopefully minimising the risk of big fluctuations in capital value compared to the risk of picking an initially-small number of shares to invest in that may go on to hit trouble early on in your investment 'career'.

They are a good, low-cost way to spread your capital around the market without having to buy small amounts of actual shares yourself, so think about taking advantage of that if you think it might be a benefit. Some of the income IT's I invest in still pay a significant amount of income in the form of dividends, and provide a healthy 'base-core' of my HYP portfolio in terms of market-spread.

Best of luck with your own investment-journey. Please do stick around and let us all know how it's going, whichever way you decide to go.

Cheers,

Itsallaguess

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Re: Is it wise to invest in Shares in March 2017

#47791

Postby Halicarnassus » April 22nd, 2017, 9:49 am

Itsallaguess wrote:
Pipsmum wrote:
One other thing I'd say before ending what's turned out to be a longer post than I initially intended, is to keep an eye on Investment Trusts as well. They can provide some 'instant diversification' in terms of minimising single-(or very small-number-of..)company-risk, especially during the initial build-phase of an equity portfolio. What you may lose in terms of a small margin for IT-management costs, you might gain in 'sleep-at-night-ness' and better diversification in the market, hopefully minimising the risk of big fluctuations in capital value compared to the risk of picking an initially-small number of shares to invest in that may go on to hit trouble early on in your investment 'career'.

They are a good, low-cost way to spread your capital around the market without having to buy small amounts of actual shares yourself, so think about taking advantage of that if you think it might be a benefit. Some of the income IT's I invest in still pay a significant amount of income in the form of dividends, and provide a healthy 'base-core' of my HYP portfolio in terms of market-spread.

Best of luck with your own investment-journey. Please do stick around and let us all know how it's going, whichever way you decide to go.

Cheers,

Itsallaguess


Great post +1

That's how I do it. ETFs.

https://www.vanguardinvestments.com.au/ ... /?overview

High yield. Compounding returns. Takes the risk out of me picking duds.

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Re: Is it wise to invest in Shares in March 2017

#48050

Postby Pipsmum » April 23rd, 2017, 11:27 pm

Thank you. I shall be reading everything suggested.

The things I've bought so far are HL managed funds in the main. I certainly didn't think I could jump in without my hand held by the experts. I did buy two on my own though. Both long term slow growth shares in the oil industry with good predictions from all corners. The horse racing analogy was more about studying form. I don't know the hock from the head in shares.... yet!

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Re: Is it wise to invest in Shares in March 2017

#48054

Postby YeeWo » April 24th, 2017, 12:12 am

Hello Pipsmum,

A workable grasp of Excel is, IMHO, one of the best tools for the home investor. I certainly wish I'd started making comprehensive records in Excel from day 1. Commands such as XIRR are fantastical for showing you the potency of your investing decisions. As has been mentioned above Time In the market is better than trying to Time the Market. That said, a homemade spreadsheet is a Really Good Idea. Good Luck!!

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Re: Is it wise to invest in Shares in March 2017

#48081

Postby Pipsmum » April 24th, 2017, 9:15 am

I'm listening to you all and thank you for all the kind advice. Got the book on search on ebay. I shall make an excel sheet and learn more. So far they were just in a ringbound folder with a summary sheet.

Income V Accumulation. I bought equal amounts of each within the same fund to compare what happens. I expect if I look in here a bit harder, there will be a place to list ones investments for friendly crits. The lingo takes some getting used to and I haven't found a summary sheet for them yet. (What does FIRE stand for?)

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Re: Is it wise to invest in Shares in March 2017

#48103

Postby Pipsmum » April 24th, 2017, 10:02 am

I've found this for a Excel XIRR tutorial. I presume this is right.

http://best-excel-tutorial.com/59-tips- ... ed-returns

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Re: Is it wise to invest in Shares in March 2017

#48153

Postby stevensfo » April 24th, 2017, 11:57 am

Pipsmum, if you are a complete novice and haven't already done so, I'd suggest you get hold of Tim Hale's book, Smarter Investing, and give it a read.


I remember being in the same boat about 20 years ago and wish I'd read plenty of books before starting!

I've kept a short list of books that have been recommended over the years and which I found useful:

George Clason The Richest Man in Babylon (very basic - motivational and useful for getting the brain thinking in the right way for beginners)
Stanley & Danko The Millionnaire next door (fascinating book though could be summarised in a few pages - basic message is LBYM)

John Lancaster Why everyone owes everyone and no one can pay. (Readable, funny but scary account of the Financial crisis etc)

Andrew Craig How to own the world. (Investing a bit further than Dover.)

Tim Hale Smarter Investing. (Brilliant)
John Kay The Long and the short of it. (Brilliant)
Richard A Ferri All about Asset Allocation. (Importance of diversification - I was recommended this years ago and found it very useful)

In true LBYM style, try to get them either free, 2nd hand or via your library. Then invest the money you have saved. :-)

Steve

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Re: Is it wise to invest in Shares in March 2017

#48631

Postby YeeWo » April 25th, 2017, 7:13 pm

Pipsmum wrote:(What does FIRE stand for?)
Financial Independence Retire Early

Pipsmum
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Re: Is it wise to invest in Shares in March 2017

#48770

Postby Pipsmum » April 26th, 2017, 10:20 am

stevensfo wrote:
In true LBYM style, try to get them either free, 2nd hand or via your library. Then invest the money you have saved. :-)


Nice mindset... love it. I was halfway there with them down for a search on ebay for second hand....

Will investigate the library first. Thanking you.

BrummieDave wrote:Pipsmum, if you are a complete novice ....


Yes and no. I am an experienced stoozer but haven't dabbled in shares yet. Only once before, getting given some by a company I had an insurance with. Took massive time out from the snooze forum to help snooze away some real and very huge debt landed on OH by unfortunate circumstance. Dealt with it just about and will be completely gone on Friday hopefully. Was reading up on how to enter the financial solitaire fray again.

YeeWo wrote:Financial Independence Retire Early


That would be nice.... however I forsee that unless lightning strikes or I'm flipping clever, I shall be starting work at 60!!!


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