The Lemon Fool

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.

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.

Here's a chart of the FTSE250 over 10 years. https://www.google.co.uk/finance?chdnp= ... authuser=0
Quickly cover the chart with a piece of paper. Now gradually slide the paper to the right so that you can see only the early part of the chart. Now try and forecast what the index will do in the future, then move the paper further to the right to see if you were correct.
If you can forecast the future most of the time, then you are a genius! If not, like the rest of us, remember the adage "It's time in the market, not timing the market".
If you have a large lump sum to invest, you may prefer to invest a little at a time, that way you might not suffer too badly with a near-term market crash. Of course, you might instead miss out on some big gains.

Alternatively, replace all of my preceding waffle with...... "Nobody knows"

--kiloran

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.

The answer might depend on what kind of investor you are. Maybe start by asking a few questions such as:

If I invest and my shares drop 10, 20, 30% in value by this time next year, will I panic sell, or just sit tight and wait for the recovery?

If I don't invest and the market starts to drop, will I be fearful of further drops, so still not invest?

If I don't invest and the market rises even more, will I decide to wait for the eventual fall, or will I jump in, fearing to miss even further rises?

If you know yourself, you'll be able to answer the question as it applies to you.

VRD

Yes its unpredictable. I would hate to loose money. I dont know how to time the market

I might invest regularly and balance out the highs & lows that way. Is that the best strategy to even out highs & lows?

Dumbledore wrote:
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.

No-one knows the answer to your question, but what I would say is that you'll only really ever learn about personal investing once you've got actual funds in the market.....

You don't give any indication regarding the size of capital you're looking at investing, and you don't mention what your ultimate investment-aim is, with regards to income or capital growth, but once you've decided which way to go on that front, then I don't see much harm at all in taking a suitable percentage of your available funds and sticking it into a well-regarding Investment Trust, after carrying out some research into the most appropriate one.

There's certain elements of your investment-disposition that you'll only ever discover once you've got some funds invested, so the sooner you do that then the sooner it will be that you gain that very important insight.

From a personal point of view, I try very hard to stay invested with my existing equity holdings, and don't normally sell anything during times where I may feel markets are looking a bit 'toppy'.

However, I do wax and wane my further-investments from either accrued capital or incoming dividends, depending on how I personally feel about the current situation. I've currently got around 15% cash available after a period of sitting our of further investment and allowing those funds to accrue, which is a level I'm happy with now, and whilst I'll maintain that level for the foreseeable future, any further accrued capital or dividends, over and above that 15% level, will get drip-fed into the market.

So I don't think it's ever a question of 'Do I invest or don't I?', and perhaps more one of asking yourself how much you may feel comfortable investing right now, and over what time-scale you'd like to do that.

Do remember my initial point though.....I honestly feel that even if today is the 'wrong' time to invest in your own mind, if you plan on investing at some point in the future then going 100% in at some later date when you're initially more 'comfortable' with the market situation may well test parts of your personal comfort-zones that you'll only really discover at that point.

I'm not sure that's the best idea, and no matter what your view of the market today, there's a sense of costing some of your initial investment-sums simply as 'personal development money', in the sense that you'll discover things once you're invested that you'dnever have known about by standing on the outside looking in.

Also, as a final note, I'll ask you to try to carry out a little mind-experiment. You seem to be looking at the market graph and statistics, and have formed a view that now may not be the best time to invest because 'it can't keep going up forever', is that more or less correct?

If it is, then try your best to imagine a scenario where we've just had 6 months of market-lows, and all the news programmes and all the printed media are howling at the state of the stock market, and how people have lost thousands, nay millions, on the current bear-market.

At that time, it's really difficult to push against that doom and gloom and actually invest as well, simply due to the overwhelming despondency associated with financial investment during those periods.

Do you think you'd feel the opposite to how you feel now?

Best of luck with your journey, no matter which way you go. Start with small sums and get a feel for both the market and your temperament to it.

Even 100% losses with those initial small sums will be some of the best real investments you'll make....

Cheers,

Itsallaguess

Thank you all for your replies.

A lot of people recommend regular monthly investing, which leads to "Pound cost averaging", and means that when the market has a fall you get more for your money. You say that you are new to investing, so some sort of a savings plan may suit you.

Have you thought about Investment Trusts?

TJH

tjh290633 wrote:A lot of people recommend regular monthly investing, which leads to "Pound cost averaging", and means that when the market has a fall you get more for your money. You say that you are new to investing, so some sort of a savings plan may suit you.

Have you thought about Investment Trusts?

TJH

I have no idea about Investment Trusts, tbh. However, I am reading about it now.

I am thinking of starting a Share ISa & drip feeding it to get pound cost averaging. I am told Halifax Self Select Stock & Share ISA might be a good option due to its low annual charge (£12/-) & £2/- per trade on selected dates as set by the bank.

https://www.lemonfool.co.uk/viewtopic.php?f=11&t=3672

Dumbledore wrote:I have no idea about Investment Trusts, tbh. However, I am reading about it now.

I am thinking of starting a Share ISa & drip feeding it to get pound cost averaging. I am told Halifax Self Select Stock & Share ISA might be a good option due to its low annual charge (£12/-) & £2/- per trade on selected dates as set by the bank.

https://www.lemonfool.co.uk/viewtopic.php?f=11&t=3672

You could do worse.

TJH

The FTSE is at an all-time high measured in pounds £.

At the same time, the pound is at an all-time low. In real terms, the FTSE isn't quite as high as it looks.

Whatever you have in cash is consistently losing value. Other assets give you at least a chance of preserving or increasing value, though they might also lose it faster than cash.

Sorry, can't be more specific. Except to note the high political risk to assets of all kinds.

"OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks. The other are July, January, September, April, November, May, March, June, December, August, and February." - Mark Twain

Dumbledore wrote:Yes its unpredictable. I would hate to loose money. I dont know how to time the market

I might invest regularly and balance out the highs & lows that way. Is that the best strategy to even out highs & lows?

No one's keen on losing money - but few things in life are certain, and investing entails risks. One of the things that is certain is volatility, meaning the price of what you purchase can and will bounce around all over the place.

Non-investors often approach investing without a suitable mindset. They're not used to seeing the value of their money pot vary, potentially dramatically, from week to week, month to month and year to year. They pay too much attention to this price volatility and allow it to affect their emotions and then react (erroneously) to those emotions.

Investing is much easier once you've been doing it for a while, and one of the things you learn is to take a step back and put things into context. For example, many investors are investing for the very long term, so a 30 year old saving for retirement may be investing for another 30,40, 50, 60+ years. That being the case, why worry if the price falls next week? If, as many people do, you're feeding money into the market over the very long term (eg. over much of your working life), then you've even less reason to worry about market falls. In fact, you actually want the market to fall because your future purchases will then occur at lower prices.

Over time, you may become somewhat skilled at finessing your purchases so as to buy more when others are fearful and prices are lower. But starting out you should probably just focus on investing money every month into some sort of well diversified portfolio appropriate to your long term goals (obviously, there's a bit of thinking to do on that front). Then, ignore the price volatility, and judge your progress by how well you stick to the rules you've laid down for yourself, not by how much your portfolio goes up or down over each week month or year.

If you do sensible stuff over the long term, and avoid the daft things that plague many beginners, you'll get a decent result. It's pretty easy really. People make it hard because they allow their emotions to get in the way - they allow their System 1 decision making (look it up) to get in the way. Cut those errors out and you'll do just fine. Cut those errors out right at the beginning of your investing career and you'll do far better than most people ever will.

When we're discussing investing in march 17, is triggering article 50 not the elephant in the room? In fact that's what I expected this thread to be about.

Surely there will be a retreat in the market as seen on the referendum result? Despite the fact we all know about it, surely it will cause the market to go down, at least as a short term knee jerk reaction. I don't pretend to know what will happen but I can't convince myself that there will be no reaction, or that there will be a positive one.

I do not believe in timing the market and am normally fully invested, but I must admit I've been CGT harvesting and have not reinvested the proceeds. If I had a lump sum I'd be opening a share dealing account and putting some cash in, but I think I'd wait until article 50 day to see what happens.

One things for sure, I think the next couple of years will bring more uncertainty than normal (and normal is pretty uncertain).

Actually I suspect another thing will be true, in the long term equities will still prove to be the best home for investment money. But maybe not this month.

doug2500 wrote:
Surely there will be a retreat in the market as seen on the referendum result? Despite the fact we all know about it, surely it will cause the market to go down, at least as a short term knee jerk reaction.

I think the market had priced in a Remain result, so the actual result was a bit of a shock. For article 50, I'd be surprised if the market took fright, since it's March delivery has been declared as a done deal by Mrs May for quite some time.

What happens after will be interesting. Any rumours of deals, or no deals will have the market bouncing as if on the high seas in a gale. As we approach the two year deadline it will get more chaotic, but then, once uncertainty becomes certainty, I expect stability to return. Since the FTSE has a high proportion of foreign earnings, bad news for the UK £ will be offset by increasing prices as quoted in GBP (as we are seeing now).

Of course, because of the FTSE's exposure to foreign markets, what Trump does will probably have more impact than Juncker's attempts to define Brexit.

Or, to summarise, I've no idea what's going to happen!

Back to the OP: if you are investing for the long term, reread saechunu and Itsallaguess's posts. A lot of good advice that's worth thinking about.

VRD

'Known unknowns' tend to get priced in well in advance, and perhaps often more than priced in. A variant of 'fall on the rumour, rise of the fact'?
IMHO we're going to see volatility around A50 etc, as the EU ex-UK, esp Germany/Brussels, are going to make a big show of threatening us 'pour encourager les autres'. But reducing exposure is not something I've considered at all.

kiloran wrote:If you can forecast the future most of the time, then you are a genius! If not, like the rest of us, remember the adage "It's time in the market, not timing the market".
--kiloran

Just to reinforce what Kiloran and some others have said from a different perspective, based on my own experience after starting a new portfolio recently (I'm overseas so can no longer contribute to my ISA or SIPP), there is a definite psychological comfort in having a portfolio with shares bought years ago, so the incidence/percentage of shares 'in the red' is a lot less.

In my new portfolio started 2 years ago, with money drip-fed in, roughly 30% of shares are in the red to a larger or smaller extent*. Contrast that with my Sipp, where the only 2 in the red are recently bought new ETFs.

Torata

*Although the portfolio TR is still very high though with 1 share that has massively outperformed and most of the other profitable ones 30~40% up.

Is it wise - No-One knows! But I wouldn't let a measure such as the numerical value of the FTSE warn you off. Here's one I prepared earlier!

viewtopic.php?f=15&t=3957&start=20#p40044

Here's some valuation measures -
https://www.advisorperspectives.com/dsh ... overvalued
https://www.advisorperspectives.com/dsh ... -indicator

Investment strategies -
http://tweedy.com/resources/library_doc ... t14Web.pdf
https://www.bogleheads.org/wiki/Boglehe ... philosophy

Intelligent historic research -
Credit Suisse Global Investment Returns Yearbook
Barclays Capital Equity Gilt Study

I'm a beginner too. Very new at this share malarkey. I find it hard to understand many of the posts because I'm not even familiar with the lingo yet.

I've been tentatively drip feeding into the HL newer funds at the £1 a unit entry level. I've no idea yet whether this is a good or bad idea or whether they are the best value for money. However the sums we are talking about are smallish. A small lump just to jump start the procedure, then adding at £50-£100 a month. I've opened one lot as a twin set of the same fund within an ISA share package. One accumulative and one income. Purely to see what happens with the different tactic. I don't really know what I am doing exactly, but feel safer with someone else managing it for me. If they get it badly wrong then they'll be out of a job, so I expect they'll try hard not to lose. HL seem like a reputable company and my dad uses them, hence my faith there. I know there are cheaper ways, but I don't know what i am doing yet and need my hand held for a bit.

In the initial excitement, I studied some 'form' and bought a couple of shares of my own choice. Both immediately dipped alarmingly for someone who's used to a savings account where money doesn't wobble like this. However, they picked up and then dipped again. So bravely or foolishly, I bought some more in the next dip of the better one. One has gone up and the other hasn't. Each have good predictions so we'll see.

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?

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. You'll finish it in a weekend and it may just be the best investment you'll make, and ensure future investments are made with a full knowledge of the risks you're taking. You'll find a lot on here have read it.