Sitting on hands

[Foodman]

I think we all have some decent gains if we bought in March and early April.

I’ve sold a few positions to realise the profits as it just seems crazy that some are 5% off Jan prices !

I’m now sitting on my hands as I think the thought process of buying shares back up to pre covid will turn and there will be a sell off of profits back towards covid lows.

Difficult to sit on hands when things just seem to be shooting up - but I can’t see a good economic outlook - I await result, forecasts and the end of job retention scheme.

Good luck all!

[jazzersi (Simon)]

Good luck timing the market. You might find this an interesting read: https://www.thesimpledollar.com/investing/stocks/tempted-to-sell-missing-just-a-handful-of-the-best-stock-market-days-can-tank-your-returns

If one invested $10000 in the S&P500 in 1980 and cashed out in 2018 you’d have had a return of ~$708k. Had you missed just the ten best days over that 38 year period your returns would have been more than halved and your return would be just ~$341k.

Just food for thought, not investment advice etc.

[Foodman]

I find these graphs etc ridiculous the essence of that comment is also in fact timing the market and also basically tell you NEVER sell.

Also these examples are given in respect of the entire indexes - my comment on selling profits reflect individual shares.

Also In your example 10k to 341k is NOT to be sneezed at in any case.

Opinions create the market we buy and sell within.

[jazzersi (Simon)]

I think the general argument of the article (and my approach with investing) is to not sell until you need the cash. In my case that will be on retirement.

True, it doesn’t apply as well to individual stocks as it does to indexes or to trading to make quick cash, but any individual stocks I buy expecting them to still exist and be thriving in decades to come. I know I am unlikely to beat the market though, so I keep the vast majority of my money in indexes.

Yes, different approaches and aims create the market dynamics!

[Foodman]

Just interesting …

ask the 40 odd year old who on the 3march 2000 20 years ago bought 100 grands worth of investment in the FTSE100 (non accumulating) thinking that when he was 60 he would have a tidy little nest egg.

Well his/her % return today at writing is .08%

[don_quixote]

@Foodman

ask the 40 odd year old who on the 3march 2000 20 years ago bought 100 grands worth of investment in the FTSE100 (non accumulating) thinking that when he was 60 he would have a tidy little nest egg.

That is a scary point for tracker funds

[jazzersi (Simon)]

Yes good point - hence why I don’t own any FTSE indexes

[jazzersi (Simon)]

Only if your tracker fund is incredibly UK centric, which I would hope it not to be as the US is the bigger market worldwide.

If you’d bought S&P500 on the same day you’d have a 226% return:

[Foodman]

great stuff !

But also happen to think that index is over valued !

Thanks for sharing and offering a balanced argument !

[fryry]

The FTSE 100 is a very dividend heavy index. If you include dividend reinvestment the return is much better. (orange is with dividend reinvestment, blue is without)

I still wouldn’t have it in my portfolio when much better returns are on offer from US indexes.

[anon51767692]

Yes, Foodman, it is unsettling!

I buy tracker funds but I’m pound-cost averaging reinvesting the dividends too (yes, likely a bit wobbly for the next couple of years) which is where the real growth will come from ultimately.

[Sleepy]

The FTSE100 has also been heavily weighted towards oil, miners, banks and financials over recent years, which are unlikely to grow too quickly. Instead they throw off a pile of cash as dividends (at least they did pre-covid). It has also been the home of plenty of UK focused businesses whose outlook is clouded by Brexit.

The S&P has been much more weighted towards tech, hence the growth over the past decade.