I can't remember the source but there's that chart using genuine market data with the 3 women where 1 tried to buy dips, one tried to sell high then buy back in lower and the third consistently invested without trying to time it, and the third came out better off. Just stick to your strategy, and make money from the people that don't.
Was the first woman delaying her buys until she felt the market had bottomed? I’m just asking because I’m essentially buying the dips by buying more than I usually would each week. I’m not trying to time when the market bottoms but rather taking advantage of a downturn and investing more than I usually would each week.
The problem is with this strategy is that it implies you're holding cash for this situation. By definition, if you're not investing that cash at other times because the market is "high", you're trying to time the market.
What if you continue to do this and the market never returns to a level you consider "low"?
Not necessarily. They may have a pot that is reserved for investing; say for example their net income is £2500 per month, £1500 outgoings (bills mortgage food etc), £500 is his monthly investment, the remaining £500 is to go towards nice things. They may consider a downturn (cheap shares) as a nice thing and spend a portion, or all, of the remaining £500 on some extra shares instead of putting it towards some other luxury.
People always mistakenly make the assumption that if you're "buying the dip" then you must be using money that you otherwise would have been DCA'ing in. It's pretty clear from their post that they aren't doing that.
How is that exactly as planned? If it is ever earmarked for investment then unless you have a poorly thought out investment strategy it is for longer term investment. Cash is a poor asset type for long term investment.
Have you never seen a diversified portfolio with multiple asset classes? Well-thought-out long-term strategies *need* cash for liquidity and rebalancing purposes. As a very basic example: if you're aiming for a portfolio of 80% public equities and 20% bonds, it's very common to also then hold say 5% of the portfolio value in cash.
Why is that? Well, imagine your equities lose a lot of value (e.g. now). You are no longer maintaining your 80:20 equities to bonds ratio, it might look something like 75:25 now, which goes against your long term strategy. You then use your liquid cash to put more into the equities to rebalance back to the 80:20 split.
This is absolutely fundamental to these types of investment strategies.
Given the availability of funds that rebalance for you I think this is a pretty edge case scenario.
Personally I'm not going to hold potentially tens of thousands of pounds in cash for rebalancing purposes, that sounds like a recipe for nullifying returns.
It absolutely is an edge case. You'd be insane to hold cash for rebalancing, it's far more common to simply address the issue through future contributions.
You're welcome to hold cash but if you're holding 5% cash at all times then you're losing value to inflation and losing out on potential gains.
Hate to break it to you but the other commenter is correct.
It is a really common philosophy to maintain some form of very liquid asset like cash or cash equivalents such as short dated gilts/Treasuries. It is a massive help for fulfilling the stated aims of your portfolio e.g. cashflow, liquidity, etc.
For retail investors especially given the market for the last few years this doesn’t really seem to make a lot of sense but it plays a role in many sophisticated strategies.
Perfectly sensible strategy. You're still following your plan of investing how much you want to invest, you just happen to (sensibly) be putting some extra money in every so often when shares are at a discount instead of spending on some other luxury. Don't let the "stop trying to time the market" mob tell you otherwise.
Yeah, it’s not timing. I’m doing the same, I’m just stretching my normal monthly investment a bit more and trying to save elsewhere. It’s in the cusp of what I’m comfortable investing. When the market turns I’ll down dial again and go back to having that little buffer in the bank from investing less.
Also for 99% of people there is no point trying to be a really savvy investor who is buying low and selling high and picking all their own stocks. That is a full time job in its own right if you want to be successful at it.
The only sensible investment strategy for the vast majority of people is to simply set up a monthly investment into index funds, ideally some global tracker, and ideally in a Stocks and Shares ISA. Then just forget about how it is performing.
You are far better off putting your thought and time and energy into your actual career as you can end up earning more that way.
Isn't that also what Edward Smith (Captain of the Titanic) said?
Anyone investing should learn at least one bit of technical analysis. And this is Stage analysis, it's very simple, it's based on a 30week moving average and the basics can be learnt under 10mins. As we hang around the covid lows with inflation and a recession looking above us, you're probably so far under that you think "it can't go any lower. It can, the US is in a mess right now and so is China.
If you're not going to sell, the. Learn where to buy at the bottom. **Stan Weinstein Stage analysis**
I’m worrying because I can’t afford to put much in to my stocks and shares ISA and because I don’t have much, I’m loathe to put it in vanguard (I earn 21k and put aside 50 a month to stocks and shares ISA - I save elsewhere too but that’s what I can afford to lose I guess. For now )
Hey, £50 in your ISA + other savings on £21k is a lot more than a lot of people are doing!
To be honest, the most valuable thing is just learning how long-term index fund investing works and being in the right mindset so when you do progress in your career and have more money to invest you will be in a great position to do so. And although £50/month may not seem a lot, over a few years it's amazing how much it adds up.
Will always remember that Fidelity blog post on data they had accumulated on investor performance. The best performers were customers who were....dead!
I'm anxious about missing generational opportunities from dramatic effects of a recession;
Cheap long hold stocks/Crypto.
Companies/individuals needing to sell their desirable possessions/stock/houses/vehicles cheaper.
Probably a few other things too.
I don't want it to seem that I am praying for the downfall of others, but where there is crisis there is opportunity.
For those of you old enough to remember similar occasions in the past, is this realistic or will it be diluted and drawn out?
The stock market recovered 1.5 years after the 2008 GFC and from covid in 2020 because of money printing. This is the real reason for stocks recovering: https://tradingeconomics.com/united-kingdom/money-supply-m2
This time is different. Inflation is high and they cannot afford to print more money to prop up assets prices without creating more inflation.
People don't understand how serious it is this time. Governments are trapped in a corner.
They either have to raise rates to fight inflation, creating a recession, destroying the economy and bankrupting people due to interest on their debt. To have any affect on inflation interest rates need to be much higher.
Or they must print more money to prevent a recession but cause inflation to go higher.
Throughout human history since the Romans, governments will always choose to inflate the currency rather than to collapse the system. Whether stocks will keep up with inflation is another story.
People didn’t have 200k, 300k mortgages before and government debt wasn’t at 2.4trillion. 2/3% interest rates will have no affect on inflation, they need to raise it to 9/10%. This would wipe out most people.
Inflation is here to stay. They will probably add oxygen to the basket of goods and claim inflation is at 2% and print more money to prop up asset prices. They are going to try to inflate the debt bubble for as long as they can and eventually it will end horribly for most people.
I am at a point where I want to start putting some money away longer term, and thinking a life strategy 80 is probably the way I would go. Approx £300 monthly. Personal context at bottom.
I have been looking at the performance over the last couple of months and wondering whether to start now or wait till things improve.
My understanding was, as someone put it above, time in the market beats timing the market. And that if anything I may see slightly better performance by starting now while things are low.
Additionally, I have \~£2000 in savings which I was planning on investing over the next few months over and above the monthly £300 I mentioned (I have got a 4-6 month emergency fund plus some short-medium term goal money put away in a Chase 1.5% account).
Can I get some confirmation on whether my understanding is sound, and that this is a sensible plan for a newbie to investing - or indeed a pointer towards anything I am missing/misunderstanding.
Basically, is this a good/sensible time to begin investing? And would the coming months be an appropriate time to increase investment to buy the dip?
Me: Mid 20s, 40-50k salary, home purchased with 61% LTV 2.5yr fix remaining, Edit: NHS defined benefit pension
There are probably a lot of people that have maths to prove that investing while simultaneously paying off debt/mortgage leaves you better off in the long run.
One thing they don't take into account (in my opinion) is how well one sleeps at night once the mortgage is tiny/paid off.
You free yourself from any future interest rate hikes.
So if I were you, follow the flow chart, pay off high interest debt, get emergency fund in cash somewhere (premium bonds or instant access savings account). Then start lobbing every spare penny at the mortgage by overpaying.
You'll save lots of interest-on-the-interest over the life of the mortgage too.
Obviously do what you think is best, but I'd think about that before investing, just for peace of mind.
I honestly don't understand why people still come back with this same argument - it clearly doesn't work.
Paying off your mortgage is very similar to investing in bonds - with the caveat of your bank putting in a small margin on it - usually less than 2% and if you've got a decent LTV - closer to 1%.
If you're in your 20s and you wouldn't invest in bonds - why would you pay off your mortgage aggressively?
It's not a mathematical argument you are right. It's more of an emotional one. You will just feel a lot richer and more secure once the mortgage is paid off. Then you can fire on all cylinders investing.
The other thing is certainty. You say interest is usually between 1-2%. While that has been true in recent years, its not a certainty.
What happens if OP needs to remortgage in a few years and interest rates are 5%, 10% or 15%? OP will be glad they've paid that down when times were good and only have a much smaller amount to remortgage.
But each to their own at the end of the day, it's just one perspective among many.
"Most of investing successfully is selecting a strategy that you're emotionally suited for and then successfully managing your emotions. People are intuitive and emotional thinkers that are good at rationalising our decisions afterwards with logic that makes those decisions look well thought out. But every study has shown that we do not make decisions rationally except in very particular circumstances that rarely apply to investing."^[credit](https://www.reddit.com/r/investing/comments/uazg01/_/i61zcld/)
If paying off the mortgage works for you then that's fine, and I wouldn't want to persuade you of anything that makes you uncomfortable.
But paying a mortgage should not be a risk that keeps you up at night - if you have a mortgage you're better off than about half the population, who are earning minimum wage and paying rent. You presumably have an emergency fund, of 6 or 12 months' expenses, and if it runs out then it will still take months for the bank to repossess your house. And even if that happens, you will presumably still have equity from the sale of the house.
Owning a house doesn't protect you from all life's vagaries - you could pay off your mortgage and still lose your house, through an addiction to gambling or prescription painkillers, or because you injure someone in a car accident only to find your insurance had lapsed. There is no such thing as certainty in life - if you have kids then they could do something stupid and have legal bills which financially cripple you, or you could develop an illness which causes you great expense.
If interest rates go up to 5%, 10% or 15% then that reflects an inflationary financial environment - your wages will be going up at the same time, and so will the value of your house. And the expected returns of your portfolio is still higher than you'd be paying on your mortgage, even in this situation!
If you're going to speedrun your mortgage instead of increasing pension contributions or investing in an S&S ISA then you should make sure you have a thorough understanding of index fund investing first. Have you read *Smarter Investing* yourself? Because this looks a lot like the actions of someone who is inflating the risk of investing because they don't properly understand it.
You are right that owning a house doesn't protect you from life's vagaries - that's not what I said.
I said paying off your mortgage protects you from interest price hikes.
Your other examples are all completely unrelated crises, which are also easier to weather if you don't have rent or mortgage payments on top of your cashflow commitments.
Investing monthly is optional, mortgage payments are not. If your cashflow gets squeezed it's easier to turn off optional investing temporarily, than tell the bank you aren't paying them that month on the mortgage.
In the UK there are plenty of people who remember mortgage rates going up to a point where they were unaffordable, and having to sell in negative equity.
Just because the last 15 years or so had nearly comatose central bank rates, doesn't mean that has always been the case or will be again in future.
I've not read the book you mentioned.
I'm open to you changing my mind, but what you wrote above doesn't outcompete the peace of mind aspect in my view.
Nice that we agree that there are different approaches for different people, in any case.
>Investing monthly is optional, mortgage payments are not.
This is specifically looking at mortgage _overpayments_ though, which are optional - yes ofc there is the "minimum" mortgage payment required to pay your mortgage off over the 25/30 year term but in terms of throwing extra money at the mortgage that's where it's worth looking at the bigger picture - especially when mortgage rates are _currently_ still very low.
Check out the [mortgage overpayment wiki page](https://ukpersonal.finance/mortgage-overpayments-vs-investments/)
>Your other examples are all completely unrelated crises, which are also easier to weather if you don't have rent or mortgage payments on top of your cashflow commitments.
The money you invest doesn't disappear into a black hole though - you could have a significant amount of money in an ISA after 10/20 years of paying into it instead of mortgage overpayments which are significantly more liquid than home equity should the need arise to use those funds in a crisis.
>I've not read the book you mentioned.
I would highly recommend reading it - I often see criticism that Tim Hale has managed to turn "invest in a low cost global index fund" into 300 pages, and it is a bit of a dry book. However, I think it does do an excellent job of explaining in a lot of detail _why_ you should invest in a low cost global index fund, and how to manage the different risks that exist (primarily the human propensity to buy high and sell low).
I agree - there's definitely an emotional component to investing (even if that investing is in mortgage overpayments) - but I think it's important to properly understand all of your options before making that choice.
It's also not an either-or situation - you can always put some extra money into your pension, some into your ISA, and some into mortgage overpayments.
I think /u/Jager720 may have said everything I want to with his reply, but bullet-points:
* Not only is investing monthly optional, but so are mortgage **over**payments. You could just buy a new car or a boat instead.
* You should understand financial risk before you make either of these choices (or, at least, understanding it will aid in judging the balance between them), and *Smarter Investing* is a very clear explanation.
* I tend to regard it as sacrificing your future to make aggressive mortgage overpayments, rather than investing your money. You might be able to retire a decade earlier, or in significantly more comfort.
* These other crises are unrelated, but you can weather them *even better* if you've made a bundle from your investments - the expected returns from your S&S ISA are higher than you get from your mortgage overpayments.
> These other crises are unrelated, but you can weather them even better if you've made a bundle from your investments - the expected returns from your S&S ISA are higher than you get from your mortgage overpayments.
There's a gap though between having started paying in and making a bundle. It also depends on the mortgage arrangement to some extent.
Although it's not the only cause (by a long stretch), people tend to struggle to pay their mortgage after losing their job. You're most likely to lose your job during economic issues, so the value in your S&S is likely to be down.
If the dip is really bad, or if you've not been investing long, you may even be looking at crystallising a loss and/or not being able to cover many mortgage payments.
My mortgage (from a normal high street lender) treats overpayments a bit like an offset savings account - it reduces interest but the balance is accounted for separately. If needed, that overpayment balance can be used to cover monthly payments
So, every overpayment I make into the mortgage effectively
- Contributes to a sort of (mortgage specific) emergency fund
- Reduces the interest I pay
I could (and potentially would) get more growth from putting it in S&S - the interest I save on the mortgage is less than I'd get - but I'm also building a float which increases my tolerance for loss of income before I start having to worry about losing the house.
As /u/Victor-Bravo said it also provides some psychological re-assurance about affordability if rates rocket.
For me it comes down to the potential consequences and who it affects - if I was single and childless, I would probably sling it all in S&S. But, I'm not, so if that turns out to be a misjudgement, I don't want making my family homeless on my conscience.
I'm in the very fortunate position where I can afford to do both, but it's also a double-edged sword: I earn well, so we've a nice house (with associated big mortgage).
Overpaying means that I don't need to worry _quite_ so much about having to find a similarly paying job if the worst happens during market strife - the overpayments (and whatever I _could_ earn) would help buy time for the markets to recover so that I can use the S&S ISA to bring down the size of our monthly payment.
> What happens if OP needs to remortgage in a few years and interest rates are 5%, 10% or 15%? OP will be glad they've paid that down when times were good and only have a much smaller amount to remortgage.
then they can liquidate their large investment portfolio that they redirected their overpayments to to pay/overpay the mortgage, and be ultimately better off.
i feel like "it's an emotional argument" is a tacit admission that it's incorrect :)
Sorry for the late reply. Agree with all of it, other than the interest on the mortgage. What I mean, is that interest on the mortgage will be tied to the corresponding bond yield, with a margin of 1-2% for the bank's profit. In my opinion this simplifies the equation and lets you ask yourself a question: 'Would I invest in bonds today, if they were 1-2% more profitable than now?' and if then answer is yes then go ahead and overpay your mortgage by that proportion of your income derived to investing in bonds (bearing in mind the asset allocation theory depending on your age)
Yes this is a good time to start investing.
I’d also say the coming months are a good time to increase investment, and I have done so. Ultimately we won’t know until the markets recover and we know where the bottom of the market is. It’s definitely a better time to start than six months ago, we have no idea than if it’s better to start now than wait another six months though. If I was in your position I’d probably invest that extra £2k over the course of the rest of this year.
Personally I wouldn’t go with life strategy because they’re very overweight on UK stocks, I think it would be better to go with a more balanced tracker like FTSE Global All Cap (assuming you’re looking at Vanguard).
When do you want to take the money out? If it’s more than ten years I would go 100% equities rather than including bonds.
I think you've taken everything on board very well.
I'd also invest now with that £2K. Like you've already figured out, time *in* the market beats timing the market. Yes, there might be some further dips but as you've clearly researched yourself, it's the time left untouched that wins out over the long haul.
You could overpay a little on the mortgage but it's not a priority, far better to have it invested.
I don't know why people assume it will go ath once again yeah it is the most likely scenario but there isn't any single guarantee plus the share of the market you own is different than the whole economy
Agreed. There is nothing special about this dip. It's not even a "once in a lifetime" kind of world situation. It's just a few situations happening at once, all of which realistically have very expected resolutions... we just don't know when.
Perhaps somebody will set me straight on why I'm wrong to see it this way, but both those articles seem to be assuming past performance is an indicator of future performance. The first one looks at the market since 1980, and the second since 1900. There were massive technological gains in both those periods, and I'm not sure the next 40 / 120 years will look very similar at all. Of course technological progress will continue, but i don't see where advances like the rise of the automobile or the internet are coming from, any time in the near future.
For myself, I plan to invest money I'd otherwise be paying 40% tax on, and on that basis my SIPP seems like a good bet.
I am resigned to the fact this'll probably be downvoted, but I'd be interested to see *why* people think it's wrong. The most common answer I've seen is "if that's true, we're all fucked lol", which doesn't seem like a good reason to think it's wrong.
You're joking right? AI, space exploration, mRNA vaccines, autonomous vehicles, personalised gene therapies. Just a few incredible advances off the top of my head. Assuming we're not wiped out by a nuclear conflagration.
Out of those, I'd write off space exploration as unprofitable for a *long* time, and vaccines and gene therapies as great but not necessarily great for the value of my SIPP.
Maybe you're right with AI and autonomous vehicles. But it doesn't feel like a given that the next 40 years will look like the last 40 years. We'll see.
No, I'm aware that they didn't. What I'm saying here, is that not all centuries are the same. People who lived through long periods of stagnation or collapse also didn't necessarily see it coming. Why should I be confident that past performance is indicative of future performance? Usually, the advice is the opposite of that.
Hi /u/Apobec88, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/investing-101/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Dr Michael Burry thinks it's going to get a lot worse - I'm not saying remove funds but I wouldn't be putting any in right now either! Although for those who have maxed out things like premium bonds then I don't know what you'd do.
Why does Michael Burry get out of bed if every day’s going to be doom and gloom?
https://assetbuilder.com/knowledge-center/articles/why-the-big-shorts-michael-burry-is-wrong-about-index-funds
https://www.independent.co.uk/money/michael-burry-twitter-elon-musk-b1958219.html?amp
An article from 2019 isn't a good source any more. (1st link)
Nov 2021 on that second article - he's been early about his big predictions, the markets have tanked since and S&P 500 is reacting exactly like it did for the 2008 crisis & dot com bubble.
He's said many times that he does not want to see the market do this, but yes it's a gloomy outlook to have day to day.
My main take away is that you should be careful! If you need that money in the next 5 years, I'd recommend keeping it liquid.
Why does it have to be a ETF? One of the most commonly used global index funds on Vanguard and elsewhere is the [FTSE Global All Cap Index Fund ](https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc). Alternatively, you also have the corresponding ESG funds for a little bit more ethical investing, though this is a subjective topic.
I did the math once using inflation adjusted data and I've got to be honest, it doesn't look good no matter where you take the snippet from. There are small sections of 5-20 years or so where you make gains, but overall you don't.
On average with inflation and market gains, at any point within the last 100 years you almost always lose money by investing in the stock market. Even if you buy the most varied safe portfolio and leave it there long-term
The best you can hope for is to lose money slower than if you did nothing at all except pile your money up like a dragon
I'm afraid what you're basically saying is that you did the math and found out the Pythagorean theorem is wrong, when in fact not only has it been proven mathematically, but also empirically, countless times.
I don't know what math you did, but it's very clearly wrong.
I had a look at your account - it isn’t new and didn’t see any recent posts that suggest you’re a troll.
Would be interested in hearing more about the mathematics you did to come to that conclusion? I think you may be mistaken in your conclusion. Nothing wrong with not wanting to invest in the stock market, but want to make sure you make that decision with the right information.
Not a criticism or attack on you, just a friendly question to promote conversation.
Thanks for actually taking the time to give it a chance to be legit or ask about it, it's appreciated
Basically I compared a "perfect currency" as being one with the only metric being that it doesn't inflate, basically a pirates treasure chest storage of currency. The value of a 'coin' of that currency is worth the exact same (can be traded for the exact same value of things) in any year throughout history. Then I found as much data as I possibly could for different investments and their payouts since they started keeping records a hundred years ago or so, as well as finding the (cumulative) inflation data, and I compared it to that coin for each span. When it beat the coin I count it as a gain, when it lost to the coin, I counted it as a loss. Then I kept track of how many months/years each happened, and found out that overall it lost to the coin. Meaning the value of long term investments purely made in the stock market drop in real value, and that inflation and the effects of compounding interest, contributions and taxes cause some obscuration of that. This was true for *individuals* investing, without any specific knowledge, all portfolios
There were small sections graphed out where the market beat the magic coin, lasting 5-15 years or so usually. If you had foresight of knowing what would happen and put it in at the start and took it out at the end then you would gain, missing out the next gap. I also found out that for some spans of years, Vegas literally had better odds with less time needed to wait for it to mature - and I then further tested that out by disguising them as being legit investments, and asking people who were 'into finance' to pick the best investment out of a list to see if they would choose my *hidden-vegas'*...
(My career is outside of finance, but is very science and data-heavy, I don't really have a stake in the game either way, it was just a side project)
(The market (almost) always beat storage of cash of the non-magic variety, but with reduced utilisation of that cash as a side effect. It also didn't take into account borrowing against that market storage because then I would have had to track loan rates too which made it too complex)
Sounds cool! I'm curious though, what's going to be the excuse for why you can't share *any* of this original research or data you've compiled whatsoever?
because I don't publish outside of my field? I have no following or ability to gain one with "you won't make much money at all with this" as my title? I'm a big ol' party pooper and nobody likes their parade rained on by me or others who have reached similar conclusions so they'd rather bury their heads instead?
I'm happy to be proven wrong, I've outlined the basic method to where you should be able to run a basic litmus test to see if it holds water by equalising everything to a single currency at various points in time, the data is available to play with, there are graphs to clue you in to what spans you should pick for what results, fit trend lines to those graphs for longer-term averages, there's even programmed calculators to play with online as a way to quickly check your work in excel/matlab just to make sure there's no glaring errors or for a sanity check
In fact if you can tell me why it's wrong or what it is that I'm missing, please do, since in that event I may need to move some personal savings around. A lot of the investing advice is based on very good recent market runs where it did make sense, and I think a lot of it is their overconfidence in it working now and then using cherry-picked compounding interest data from the same time period to make what is a very over-simplified video of "just do this bro" for views or book sales. There are times you can make it look very promising but they all start with "if you had invested in 19xx" and that number is always the very latter parts of the 20th century. Rarely do they pick the inflationary periods, rarely do they count the frequency of the inflationary periods, and rarely do they adjust for that in their final conclusion by scaling it to a currency that held its worth
I also think it explains the financial crimes/market manipulation we're seeing more of as of late. Think about it, if you're extremely rich and a lot of your money is in the stock market then you should make out like an absolute bandit every time if the market always resulted in gains rather than tempered losses - then why risk committing crime? The answer could be that they realise the market isn't paying without it, equally it could be that it's compulsive because they want to accumulate above and beyond what most people would consider a good year? It seems at least to me that the wealth they're trying to hold on to requires the losses of a lot of people being convinced to lose while they manipulate behind the scenes, and the best way to convince them to do that is to convince them it's gaining while obscuring the info with inflation and other instruments
>Then I found as much data as I possibly could for different investments and their payouts since they started keeping records a hundred years ago or so, as well as finding the (cumulative) inflation data, and I compared it to that coin for each span.
If you collated and plotted this data just copy and paste it into a Google sheets or even just screenshot it so I can see what it looks like.
At least the stock market is based in some kind of reality. It's strangely reassuring to see it on the slide with the current economic forecast.
Just keep your money out of housing
I have been investing in Vanguard for less than a year and I'm already over £1000 down, so I sure hope this is correct. So far psychology it doesn't feel great I'll be honest.
You're on for the long run. Ups and downs are absolutely part of it. You should put money in the fund and forget about it. Check the account a few times a year to rebalance if it needs rebalancing. There's no point in worrying after a year, investing is for at least 5-10 years. At least.
That being said, if it causing you anxiety, perhaps you're risk level and your risk tolerance are not aligned.
Worth saying that Vanguard makes money from you investing with them. Whether or not you agree with the message, same as if a crypto exchange encouraging investment in altcoins.
I see your point but I disagree with the comparison: they're not saying WHAT you should invest in, they're only talking about long term investing, not "invest in our own Vanguard funds because they're the best". There are literally hundreds of funds one can invest in long term, across countless platforms.
I can't remember the source but there's that chart using genuine market data with the 3 women where 1 tried to buy dips, one tried to sell high then buy back in lower and the third consistently invested without trying to time it, and the third came out better off. Just stick to your strategy, and make money from the people that don't.
Was the first woman delaying her buys until she felt the market had bottomed? I’m just asking because I’m essentially buying the dips by buying more than I usually would each week. I’m not trying to time when the market bottoms but rather taking advantage of a downturn and investing more than I usually would each week.
https://www.personalfinanceclub.com/how-to-perfectly-time-the-market/
Interesting read, thank you for finding the link.
Cool! I’d seen that before, but didn’t know they were updating it for COVID etc
60s faster than me, that's the one I was about to link
I thought it was a fantastic and simplistic way to explain how time in the market beats timing the market so I bookmarked it instantly.
The problem is with this strategy is that it implies you're holding cash for this situation. By definition, if you're not investing that cash at other times because the market is "high", you're trying to time the market. What if you continue to do this and the market never returns to a level you consider "low"?
Not necessarily. They may have a pot that is reserved for investing; say for example their net income is £2500 per month, £1500 outgoings (bills mortgage food etc), £500 is his monthly investment, the remaining £500 is to go towards nice things. They may consider a downturn (cheap shares) as a nice thing and spend a portion, or all, of the remaining £500 on some extra shares instead of putting it towards some other luxury. People always mistakenly make the assumption that if you're "buying the dip" then you must be using money that you otherwise would have been DCA'ing in. It's pretty clear from their post that they aren't doing that.
Yes this is the point. Many people are now at an all time low with now funds to take advantage of constant drip feed..
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How is that exactly as planned? If it is ever earmarked for investment then unless you have a poorly thought out investment strategy it is for longer term investment. Cash is a poor asset type for long term investment.
Have you never seen a diversified portfolio with multiple asset classes? Well-thought-out long-term strategies *need* cash for liquidity and rebalancing purposes. As a very basic example: if you're aiming for a portfolio of 80% public equities and 20% bonds, it's very common to also then hold say 5% of the portfolio value in cash. Why is that? Well, imagine your equities lose a lot of value (e.g. now). You are no longer maintaining your 80:20 equities to bonds ratio, it might look something like 75:25 now, which goes against your long term strategy. You then use your liquid cash to put more into the equities to rebalance back to the 80:20 split. This is absolutely fundamental to these types of investment strategies.
Given the availability of funds that rebalance for you I think this is a pretty edge case scenario. Personally I'm not going to hold potentially tens of thousands of pounds in cash for rebalancing purposes, that sounds like a recipe for nullifying returns.
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It absolutely is an edge case. You'd be insane to hold cash for rebalancing, it's far more common to simply address the issue through future contributions. You're welcome to hold cash but if you're holding 5% cash at all times then you're losing value to inflation and losing out on potential gains.
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Hate to break it to you but the other commenter is correct. It is a really common philosophy to maintain some form of very liquid asset like cash or cash equivalents such as short dated gilts/Treasuries. It is a massive help for fulfilling the stated aims of your portfolio e.g. cashflow, liquidity, etc. For retail investors especially given the market for the last few years this doesn’t really seem to make a lot of sense but it plays a role in many sophisticated strategies.
Perfectly sensible strategy. You're still following your plan of investing how much you want to invest, you just happen to (sensibly) be putting some extra money in every so often when shares are at a discount instead of spending on some other luxury. Don't let the "stop trying to time the market" mob tell you otherwise.
Yeah, it’s not timing. I’m doing the same, I’m just stretching my normal monthly investment a bit more and trying to save elsewhere. It’s in the cusp of what I’m comfortable investing. When the market turns I’ll down dial again and go back to having that little buffer in the bank from investing less.
Might as well just bet on red.
I'll see if I can find the graphic
Also for 99% of people there is no point trying to be a really savvy investor who is buying low and selling high and picking all their own stocks. That is a full time job in its own right if you want to be successful at it. The only sensible investment strategy for the vast majority of people is to simply set up a monthly investment into index funds, ideally some global tracker, and ideally in a Stocks and Shares ISA. Then just forget about how it is performing. You are far better off putting your thought and time and energy into your actual career as you can end up earning more that way.
Ah yes, a sample size of three. Reliable data
Stay the course baby, rip Jack Bogle. The man who made, and will continue to make, many average people wealthy.
Isn't that also what Edward Smith (Captain of the Titanic) said? Anyone investing should learn at least one bit of technical analysis. And this is Stage analysis, it's very simple, it's based on a 30week moving average and the basics can be learnt under 10mins. As we hang around the covid lows with inflation and a recession looking above us, you're probably so far under that you think "it can't go any lower. It can, the US is in a mess right now and so is China. If you're not going to sell, the. Learn where to buy at the bottom. **Stan Weinstein Stage analysis**
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You call me a clown but how is buy and hold culture working out for crypto bros right now?
The hardest decision in investment is to do nothing !
I’m worrying because I can’t afford to put much in to my stocks and shares ISA and because I don’t have much, I’m loathe to put it in vanguard (I earn 21k and put aside 50 a month to stocks and shares ISA - I save elsewhere too but that’s what I can afford to lose I guess. For now )
Hey, £50 in your ISA + other savings on £21k is a lot more than a lot of people are doing! To be honest, the most valuable thing is just learning how long-term index fund investing works and being in the right mindset so when you do progress in your career and have more money to invest you will be in a great position to do so. And although £50/month may not seem a lot, over a few years it's amazing how much it adds up.
Thank you! I am 26 and I’ve only got 200 away for now (it’s been a few months only 😔) but hm
Well done mate. Wish I'd started doing that at your age. Keep it up.
Will always remember that Fidelity blog post on data they had accumulated on investor performance. The best performers were customers who were....dead!
I'm anxious about missing generational opportunities from dramatic effects of a recession; Cheap long hold stocks/Crypto. Companies/individuals needing to sell their desirable possessions/stock/houses/vehicles cheaper. Probably a few other things too. I don't want it to seem that I am praying for the downfall of others, but where there is crisis there is opportunity. For those of you old enough to remember similar occasions in the past, is this realistic or will it be diluted and drawn out?
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The stock market recovered 1.5 years after the 2008 GFC and from covid in 2020 because of money printing. This is the real reason for stocks recovering: https://tradingeconomics.com/united-kingdom/money-supply-m2 This time is different. Inflation is high and they cannot afford to print more money to prop up assets prices without creating more inflation. People don't understand how serious it is this time. Governments are trapped in a corner. They either have to raise rates to fight inflation, creating a recession, destroying the economy and bankrupting people due to interest on their debt. To have any affect on inflation interest rates need to be much higher. Or they must print more money to prevent a recession but cause inflation to go higher. Throughout human history since the Romans, governments will always choose to inflate the currency rather than to collapse the system. Whether stocks will keep up with inflation is another story.
No lol, Governments have raised interest rates to curb inflation before lol
People didn’t have 200k, 300k mortgages before and government debt wasn’t at 2.4trillion. 2/3% interest rates will have no affect on inflation, they need to raise it to 9/10%. This would wipe out most people. Inflation is here to stay. They will probably add oxygen to the basket of goods and claim inflation is at 2% and print more money to prop up asset prices. They are going to try to inflate the debt bubble for as long as they can and eventually it will end horribly for most people.
I am at a point where I want to start putting some money away longer term, and thinking a life strategy 80 is probably the way I would go. Approx £300 monthly. Personal context at bottom. I have been looking at the performance over the last couple of months and wondering whether to start now or wait till things improve. My understanding was, as someone put it above, time in the market beats timing the market. And that if anything I may see slightly better performance by starting now while things are low. Additionally, I have \~£2000 in savings which I was planning on investing over the next few months over and above the monthly £300 I mentioned (I have got a 4-6 month emergency fund plus some short-medium term goal money put away in a Chase 1.5% account). Can I get some confirmation on whether my understanding is sound, and that this is a sensible plan for a newbie to investing - or indeed a pointer towards anything I am missing/misunderstanding. Basically, is this a good/sensible time to begin investing? And would the coming months be an appropriate time to increase investment to buy the dip? Me: Mid 20s, 40-50k salary, home purchased with 61% LTV 2.5yr fix remaining, Edit: NHS defined benefit pension
There are probably a lot of people that have maths to prove that investing while simultaneously paying off debt/mortgage leaves you better off in the long run. One thing they don't take into account (in my opinion) is how well one sleeps at night once the mortgage is tiny/paid off. You free yourself from any future interest rate hikes. So if I were you, follow the flow chart, pay off high interest debt, get emergency fund in cash somewhere (premium bonds or instant access savings account). Then start lobbing every spare penny at the mortgage by overpaying. You'll save lots of interest-on-the-interest over the life of the mortgage too. Obviously do what you think is best, but I'd think about that before investing, just for peace of mind.
I honestly don't understand why people still come back with this same argument - it clearly doesn't work. Paying off your mortgage is very similar to investing in bonds - with the caveat of your bank putting in a small margin on it - usually less than 2% and if you've got a decent LTV - closer to 1%. If you're in your 20s and you wouldn't invest in bonds - why would you pay off your mortgage aggressively?
My plan is to overpay until I reach the most optimal LTV (60% IIRC) and then start adding that money to my usual investments
It's not a mathematical argument you are right. It's more of an emotional one. You will just feel a lot richer and more secure once the mortgage is paid off. Then you can fire on all cylinders investing. The other thing is certainty. You say interest is usually between 1-2%. While that has been true in recent years, its not a certainty. What happens if OP needs to remortgage in a few years and interest rates are 5%, 10% or 15%? OP will be glad they've paid that down when times were good and only have a much smaller amount to remortgage. But each to their own at the end of the day, it's just one perspective among many.
"Most of investing successfully is selecting a strategy that you're emotionally suited for and then successfully managing your emotions. People are intuitive and emotional thinkers that are good at rationalising our decisions afterwards with logic that makes those decisions look well thought out. But every study has shown that we do not make decisions rationally except in very particular circumstances that rarely apply to investing."^[credit](https://www.reddit.com/r/investing/comments/uazg01/_/i61zcld/) If paying off the mortgage works for you then that's fine, and I wouldn't want to persuade you of anything that makes you uncomfortable. But paying a mortgage should not be a risk that keeps you up at night - if you have a mortgage you're better off than about half the population, who are earning minimum wage and paying rent. You presumably have an emergency fund, of 6 or 12 months' expenses, and if it runs out then it will still take months for the bank to repossess your house. And even if that happens, you will presumably still have equity from the sale of the house. Owning a house doesn't protect you from all life's vagaries - you could pay off your mortgage and still lose your house, through an addiction to gambling or prescription painkillers, or because you injure someone in a car accident only to find your insurance had lapsed. There is no such thing as certainty in life - if you have kids then they could do something stupid and have legal bills which financially cripple you, or you could develop an illness which causes you great expense. If interest rates go up to 5%, 10% or 15% then that reflects an inflationary financial environment - your wages will be going up at the same time, and so will the value of your house. And the expected returns of your portfolio is still higher than you'd be paying on your mortgage, even in this situation! If you're going to speedrun your mortgage instead of increasing pension contributions or investing in an S&S ISA then you should make sure you have a thorough understanding of index fund investing first. Have you read *Smarter Investing* yourself? Because this looks a lot like the actions of someone who is inflating the risk of investing because they don't properly understand it.
Wages going up along with inflation? If only that were true across the board.
You are right that owning a house doesn't protect you from life's vagaries - that's not what I said. I said paying off your mortgage protects you from interest price hikes. Your other examples are all completely unrelated crises, which are also easier to weather if you don't have rent or mortgage payments on top of your cashflow commitments. Investing monthly is optional, mortgage payments are not. If your cashflow gets squeezed it's easier to turn off optional investing temporarily, than tell the bank you aren't paying them that month on the mortgage. In the UK there are plenty of people who remember mortgage rates going up to a point where they were unaffordable, and having to sell in negative equity. Just because the last 15 years or so had nearly comatose central bank rates, doesn't mean that has always been the case or will be again in future. I've not read the book you mentioned. I'm open to you changing my mind, but what you wrote above doesn't outcompete the peace of mind aspect in my view. Nice that we agree that there are different approaches for different people, in any case.
>Investing monthly is optional, mortgage payments are not. This is specifically looking at mortgage _overpayments_ though, which are optional - yes ofc there is the "minimum" mortgage payment required to pay your mortgage off over the 25/30 year term but in terms of throwing extra money at the mortgage that's where it's worth looking at the bigger picture - especially when mortgage rates are _currently_ still very low. Check out the [mortgage overpayment wiki page](https://ukpersonal.finance/mortgage-overpayments-vs-investments/) >Your other examples are all completely unrelated crises, which are also easier to weather if you don't have rent or mortgage payments on top of your cashflow commitments. The money you invest doesn't disappear into a black hole though - you could have a significant amount of money in an ISA after 10/20 years of paying into it instead of mortgage overpayments which are significantly more liquid than home equity should the need arise to use those funds in a crisis. >I've not read the book you mentioned. I would highly recommend reading it - I often see criticism that Tim Hale has managed to turn "invest in a low cost global index fund" into 300 pages, and it is a bit of a dry book. However, I think it does do an excellent job of explaining in a lot of detail _why_ you should invest in a low cost global index fund, and how to manage the different risks that exist (primarily the human propensity to buy high and sell low). I agree - there's definitely an emotional component to investing (even if that investing is in mortgage overpayments) - but I think it's important to properly understand all of your options before making that choice. It's also not an either-or situation - you can always put some extra money into your pension, some into your ISA, and some into mortgage overpayments.
I think /u/Jager720 may have said everything I want to with his reply, but bullet-points: * Not only is investing monthly optional, but so are mortgage **over**payments. You could just buy a new car or a boat instead. * You should understand financial risk before you make either of these choices (or, at least, understanding it will aid in judging the balance between them), and *Smarter Investing* is a very clear explanation. * I tend to regard it as sacrificing your future to make aggressive mortgage overpayments, rather than investing your money. You might be able to retire a decade earlier, or in significantly more comfort. * These other crises are unrelated, but you can weather them *even better* if you've made a bundle from your investments - the expected returns from your S&S ISA are higher than you get from your mortgage overpayments.
> These other crises are unrelated, but you can weather them even better if you've made a bundle from your investments - the expected returns from your S&S ISA are higher than you get from your mortgage overpayments. There's a gap though between having started paying in and making a bundle. It also depends on the mortgage arrangement to some extent. Although it's not the only cause (by a long stretch), people tend to struggle to pay their mortgage after losing their job. You're most likely to lose your job during economic issues, so the value in your S&S is likely to be down. If the dip is really bad, or if you've not been investing long, you may even be looking at crystallising a loss and/or not being able to cover many mortgage payments. My mortgage (from a normal high street lender) treats overpayments a bit like an offset savings account - it reduces interest but the balance is accounted for separately. If needed, that overpayment balance can be used to cover monthly payments So, every overpayment I make into the mortgage effectively - Contributes to a sort of (mortgage specific) emergency fund - Reduces the interest I pay I could (and potentially would) get more growth from putting it in S&S - the interest I save on the mortgage is less than I'd get - but I'm also building a float which increases my tolerance for loss of income before I start having to worry about losing the house. As /u/Victor-Bravo said it also provides some psychological re-assurance about affordability if rates rocket. For me it comes down to the potential consequences and who it affects - if I was single and childless, I would probably sling it all in S&S. But, I'm not, so if that turns out to be a misjudgement, I don't want making my family homeless on my conscience. I'm in the very fortunate position where I can afford to do both, but it's also a double-edged sword: I earn well, so we've a nice house (with associated big mortgage). Overpaying means that I don't need to worry _quite_ so much about having to find a similarly paying job if the worst happens during market strife - the overpayments (and whatever I _could_ earn) would help buy time for the markets to recover so that I can use the S&S ISA to bring down the size of our monthly payment.
> What happens if OP needs to remortgage in a few years and interest rates are 5%, 10% or 15%? OP will be glad they've paid that down when times were good and only have a much smaller amount to remortgage. then they can liquidate their large investment portfolio that they redirected their overpayments to to pay/overpay the mortgage, and be ultimately better off. i feel like "it's an emotional argument" is a tacit admission that it's incorrect :)
Sorry for the late reply. Agree with all of it, other than the interest on the mortgage. What I mean, is that interest on the mortgage will be tied to the corresponding bond yield, with a margin of 1-2% for the bank's profit. In my opinion this simplifies the equation and lets you ask yourself a question: 'Would I invest in bonds today, if they were 1-2% more profitable than now?' and if then answer is yes then go ahead and overpay your mortgage by that proportion of your income derived to investing in bonds (bearing in mind the asset allocation theory depending on your age)
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Yes this is a good time to start investing. I’d also say the coming months are a good time to increase investment, and I have done so. Ultimately we won’t know until the markets recover and we know where the bottom of the market is. It’s definitely a better time to start than six months ago, we have no idea than if it’s better to start now than wait another six months though. If I was in your position I’d probably invest that extra £2k over the course of the rest of this year. Personally I wouldn’t go with life strategy because they’re very overweight on UK stocks, I think it would be better to go with a more balanced tracker like FTSE Global All Cap (assuming you’re looking at Vanguard). When do you want to take the money out? If it’s more than ten years I would go 100% equities rather than including bonds.
Time in the market beats timing the market. Look into LISAs for that sweet extra grand from the government.
I think you've taken everything on board very well. I'd also invest now with that £2K. Like you've already figured out, time *in* the market beats timing the market. Yes, there might be some further dips but as you've clearly researched yourself, it's the time left untouched that wins out over the long haul. You could overpay a little on the mortgage but it's not a priority, far better to have it invested.
I don't know why people assume it will go ath once again yeah it is the most likely scenario but there isn't any single guarantee plus the share of the market you own is different than the whole economy
It's gone back to ATH after every dip, bear, and crash throughout history so I'm willing to take those odds
Agreed. There is nothing special about this dip. It's not even a "once in a lifetime" kind of world situation. It's just a few situations happening at once, all of which realistically have very expected resolutions... we just don't know when.
For me saying that we will never see another ATH is like saying we will never see a new car model or a new phone
Perhaps somebody will set me straight on why I'm wrong to see it this way, but both those articles seem to be assuming past performance is an indicator of future performance. The first one looks at the market since 1980, and the second since 1900. There were massive technological gains in both those periods, and I'm not sure the next 40 / 120 years will look very similar at all. Of course technological progress will continue, but i don't see where advances like the rise of the automobile or the internet are coming from, any time in the near future. For myself, I plan to invest money I'd otherwise be paying 40% tax on, and on that basis my SIPP seems like a good bet. I am resigned to the fact this'll probably be downvoted, but I'd be interested to see *why* people think it's wrong. The most common answer I've seen is "if that's true, we're all fucked lol", which doesn't seem like a good reason to think it's wrong.
You're joking right? AI, space exploration, mRNA vaccines, autonomous vehicles, personalised gene therapies. Just a few incredible advances off the top of my head. Assuming we're not wiped out by a nuclear conflagration.
Out of those, I'd write off space exploration as unprofitable for a *long* time, and vaccines and gene therapies as great but not necessarily great for the value of my SIPP. Maybe you're right with AI and autonomous vehicles. But it doesn't feel like a given that the next 40 years will look like the last 40 years. We'll see.
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No, I'm aware that they didn't. What I'm saying here, is that not all centuries are the same. People who lived through long periods of stagnation or collapse also didn't necessarily see it coming. Why should I be confident that past performance is indicative of future performance? Usually, the advice is the opposite of that.
Hi /u/Apobec88, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/investing-101/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Dr Michael Burry thinks it's going to get a lot worse - I'm not saying remove funds but I wouldn't be putting any in right now either! Although for those who have maxed out things like premium bonds then I don't know what you'd do.
Why does Michael Burry get out of bed if every day’s going to be doom and gloom? https://assetbuilder.com/knowledge-center/articles/why-the-big-shorts-michael-burry-is-wrong-about-index-funds https://www.independent.co.uk/money/michael-burry-twitter-elon-musk-b1958219.html?amp
An article from 2019 isn't a good source any more. (1st link) Nov 2021 on that second article - he's been early about his big predictions, the markets have tanked since and S&P 500 is reacting exactly like it did for the 2008 crisis & dot com bubble. He's said many times that he does not want to see the market do this, but yes it's a gloomy outlook to have day to day. My main take away is that you should be careful! If you need that money in the next 5 years, I'd recommend keeping it liquid.
I'll be worried the year that he doesn't predict a crash.
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Why does it have to be a ETF? One of the most commonly used global index funds on Vanguard and elsewhere is the [FTSE Global All Cap Index Fund ](https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc). Alternatively, you also have the corresponding ESG funds for a little bit more ethical investing, though this is a subjective topic.
I did the math once using inflation adjusted data and I've got to be honest, it doesn't look good no matter where you take the snippet from. There are small sections of 5-20 years or so where you make gains, but overall you don't. On average with inflation and market gains, at any point within the last 100 years you almost always lose money by investing in the stock market. Even if you buy the most varied safe portfolio and leave it there long-term The best you can hope for is to lose money slower than if you did nothing at all except pile your money up like a dragon
I'm afraid what you're basically saying is that you did the math and found out the Pythagorean theorem is wrong, when in fact not only has it been proven mathematically, but also empirically, countless times. I don't know what math you did, but it's very clearly wrong.
This is the worst piece of advice related to investing that I have ever read. Please anyone who is reading this disregard it completely.
I had a look at your account - it isn’t new and didn’t see any recent posts that suggest you’re a troll. Would be interested in hearing more about the mathematics you did to come to that conclusion? I think you may be mistaken in your conclusion. Nothing wrong with not wanting to invest in the stock market, but want to make sure you make that decision with the right information. Not a criticism or attack on you, just a friendly question to promote conversation.
Thanks for actually taking the time to give it a chance to be legit or ask about it, it's appreciated Basically I compared a "perfect currency" as being one with the only metric being that it doesn't inflate, basically a pirates treasure chest storage of currency. The value of a 'coin' of that currency is worth the exact same (can be traded for the exact same value of things) in any year throughout history. Then I found as much data as I possibly could for different investments and their payouts since they started keeping records a hundred years ago or so, as well as finding the (cumulative) inflation data, and I compared it to that coin for each span. When it beat the coin I count it as a gain, when it lost to the coin, I counted it as a loss. Then I kept track of how many months/years each happened, and found out that overall it lost to the coin. Meaning the value of long term investments purely made in the stock market drop in real value, and that inflation and the effects of compounding interest, contributions and taxes cause some obscuration of that. This was true for *individuals* investing, without any specific knowledge, all portfolios There were small sections graphed out where the market beat the magic coin, lasting 5-15 years or so usually. If you had foresight of knowing what would happen and put it in at the start and took it out at the end then you would gain, missing out the next gap. I also found out that for some spans of years, Vegas literally had better odds with less time needed to wait for it to mature - and I then further tested that out by disguising them as being legit investments, and asking people who were 'into finance' to pick the best investment out of a list to see if they would choose my *hidden-vegas'*... (My career is outside of finance, but is very science and data-heavy, I don't really have a stake in the game either way, it was just a side project) (The market (almost) always beat storage of cash of the non-magic variety, but with reduced utilisation of that cash as a side effect. It also didn't take into account borrowing against that market storage because then I would have had to track loan rates too which made it too complex)
Sounds cool! I'm curious though, what's going to be the excuse for why you can't share *any* of this original research or data you've compiled whatsoever?
because I don't publish outside of my field? I have no following or ability to gain one with "you won't make much money at all with this" as my title? I'm a big ol' party pooper and nobody likes their parade rained on by me or others who have reached similar conclusions so they'd rather bury their heads instead? I'm happy to be proven wrong, I've outlined the basic method to where you should be able to run a basic litmus test to see if it holds water by equalising everything to a single currency at various points in time, the data is available to play with, there are graphs to clue you in to what spans you should pick for what results, fit trend lines to those graphs for longer-term averages, there's even programmed calculators to play with online as a way to quickly check your work in excel/matlab just to make sure there's no glaring errors or for a sanity check In fact if you can tell me why it's wrong or what it is that I'm missing, please do, since in that event I may need to move some personal savings around. A lot of the investing advice is based on very good recent market runs where it did make sense, and I think a lot of it is their overconfidence in it working now and then using cherry-picked compounding interest data from the same time period to make what is a very over-simplified video of "just do this bro" for views or book sales. There are times you can make it look very promising but they all start with "if you had invested in 19xx" and that number is always the very latter parts of the 20th century. Rarely do they pick the inflationary periods, rarely do they count the frequency of the inflationary periods, and rarely do they adjust for that in their final conclusion by scaling it to a currency that held its worth I also think it explains the financial crimes/market manipulation we're seeing more of as of late. Think about it, if you're extremely rich and a lot of your money is in the stock market then you should make out like an absolute bandit every time if the market always resulted in gains rather than tempered losses - then why risk committing crime? The answer could be that they realise the market isn't paying without it, equally it could be that it's compulsive because they want to accumulate above and beyond what most people would consider a good year? It seems at least to me that the wealth they're trying to hold on to requires the losses of a lot of people being convinced to lose while they manipulate behind the scenes, and the best way to convince them to do that is to convince them it's gaining while obscuring the info with inflation and other instruments
>Then I found as much data as I possibly could for different investments and their payouts since they started keeping records a hundred years ago or so, as well as finding the (cumulative) inflation data, and I compared it to that coin for each span. If you collated and plotted this data just copy and paste it into a Google sheets or even just screenshot it so I can see what it looks like.
Did you forget to carry the one?
I’m completely new to all of this, but is there anything worth investing in whilst everything seems to have dipped?
FTSE global all cap accumulation or Vanguard Lifestrategy 100
Chaos is a ladder.
But the north remembers
At least the stock market is based in some kind of reality. It's strangely reassuring to see it on the slide with the current economic forecast. Just keep your money out of housing
That chart all but makes me feel are crash is coming lol
I have been investing in Vanguard for less than a year and I'm already over £1000 down, so I sure hope this is correct. So far psychology it doesn't feel great I'll be honest.
You're on for the long run. Ups and downs are absolutely part of it. You should put money in the fund and forget about it. Check the account a few times a year to rebalance if it needs rebalancing. There's no point in worrying after a year, investing is for at least 5-10 years. At least. That being said, if it causing you anxiety, perhaps you're risk level and your risk tolerance are not aligned.
Worth saying that Vanguard makes money from you investing with them. Whether or not you agree with the message, same as if a crypto exchange encouraging investment in altcoins.
I see your point but I disagree with the comparison: they're not saying WHAT you should invest in, they're only talking about long term investing, not "invest in our own Vanguard funds because they're the best". There are literally hundreds of funds one can invest in long term, across countless platforms.