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King Lodos
Posted: 21 October 2017 15:28:59(UTC)
#22

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Keith Cobby;52226 wrote:
This week has been the 30th anniversary of the 1987 correction. I was fully invested then and am now. Timing the market is impossible and investors have been waiting for the next correction for some years now. The best advice would be to invest monthly and benefit from pound/cost averaging.


Ever the contrarian: not 'impossible' – just not generally advisable. (and certainly not something the average investor need worry about)

My favourite trader, Stan Druckenmiller, bought big a day before the flash crash (thinking he was buying a dip) .. Realised he was wrong that morning, then went short by the afternoon.

In some sense we're all traders, and all exposed to the risk of being wrong vs the market .. Really what makes trading more haphazard and less advisable is that it exposes more of our own weaknesses .. But if you can do it, while it doesn't guarantee beating stocks, it potentially gives you much more control (puts you less at the whim of the market).
Mr Helpful
Posted: 22 October 2017 08:37:22(UTC)
#21

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Keith Cobby;52226 wrote:

1. Timing the market is impossible and investors have been waiting for the next correction for some years now.
2. The best advice would be to invest monthly and benefit from pound/cost averaging.


1. Depends what is meant by 'timing'.
Opinions and experience differ.
All in or all out, 100% true timing, would definitely be a recipe for disaster.

For those who have been fortunate to accumulate wealth and with an interest in financial history,
Benjamin Roth's 'The Great Depression - A Diary' may be a sobering read.
And as Cassandra keeps reminding me, by some measures Stocks today are more expensive than they were in 1929.

Sometimes said "when Cabbages are dear, then let us eat Brussel Sprouts".
Brussel Sprouts aside, surely we don't want to end up a cynic ‘a man who knows the price of everything and the value of nothing' OW.


2. The OP would be well advised to follow this advice.
If nothing else it would open up thinking time, plus bring experience of the waywardness of the markets,
the learning to live with losses with equanimity.
1 user thanked Mr Helpful for this post.
Tim D on 22/10/2017(UTC)
Bruce J.
Posted: 23 October 2017 16:53:11(UTC)
#23

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Well Andreas, you have been getting lots of wonderful advice from people with great experience. There is nothing I can add, but one point which I would stress:

Putting your investments into an ISA is a really smart move. It's just a separate account where you can put cash or buy shares or trusts, but anything you put in there remains tax free for the rest of your life.

So as you get older and have to pay 40% tax on your earnings, the iSA is saving you that 40% every year, and it's compounding - the money it save you each year is growing the next year and the next, which builds ip to vast amounts of money over the years.

The catch is that when people are young they dont ralise how much they will lose to tax in the long term, so often they miss out on that allowance - for many years I did. If you dont fill it up each year then you cant go back and get it later.

So, whatever form of investment you make I strongly advise you to do it inside an ISA - and maybe sit down one evening and work out how much you save over the next 40 years by paying no tax on your nest -egg.
Tony Peterson
Posted: 23 October 2017 19:12:28(UTC)
#24

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Andreas

Is "quite a lot of money" enough for your first home? Or a deposit sufficient to obtain finance for a first home?

ISAs are brilliant. Once you have the security of your own home.
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