I remember seeing that big drop a year ago and thinking now would be a great time to invest. But guess what I didnāt do. I didnāt invest. For years Iāve been overpaying my mortgage that has an interest rate of 2.14% and sticking the rest in pathetic savings accounts. Seems like youāre better off not making overpayments, investing the money and then paying off the mortgage later. At least thatās the conclusion Iāve come to recently.
Gotta say the S&P 500 EFT looks great. I was looking at that earlier. I need to put some cash in there and then look for other good EFTs. So far Iāve mostly picked individual stocks with a lot being Covid recovery dependent. Iām confident of a Covid recovery but still, these stocks have already regained a lot of what they lost already.
I disagree slightly. I began purchasing gold mid December 2019 as the market seemed to be focussed on overvalued stocks. I went 100% cash early Feb 2020 (largely thanks to John Thomas, who also then began to recommend gold) (& having spent 2019 learning how to invest during a recession) (& believing that an unknown virus spreading with a radio news death count throughout January 2020 became a growing warning).
Buying the March 23rd bottom I picked up Alphabet, WWH Trust, BRSC. I had wanted to buy into Alphabet for over a year. That was a great opportunity at ~$1080.
I recall many posts on this community of others pulling the trigger around March 23rd.
Definitely catalystsā of good market fortune than anything else. Not the kind of scenario you could replicate that level of preciseness, but still, a few of us believed the market to be absolutely ridiculously cheap in todayās terms around mid-March. As a long term investor, what else would one wait for than a 40% S&P 500 index drop?
No, we donāt disagree. I do think that almost exactly one year ago would have been a bad time for a new investor to begin investing, because the S&P 500 index fell off a cliff on 24 February last year, and people who have been surprised by this weekās slight wobble would have been put off investing forever if theyād started investing at the beginning of the Feb-to-Mar slide. But I did also say that 23 March would have been an excellent time to begin investing. (Except maybe that people starting then would have learned the wrong lesson, that stocks always go up!)
You did very well with your timing in March. I didnāt go to cash at the beginning of February, that sort of move takes more certainty than I felt I had. So I only had a small amount of cash available to invest, including some bonds that I sold. But I did manage to catch some of the tailwind.
Yes, but calling the bottom is never that easy, you seem to have got it right first time, but i remember buying in early March when the market was down 8%, then it went down another 8% and i bought in then it went down another 12% which was around March 23rd and i bought in again. I still did ok, but would have done much better if id put in everything in on the 23rd.
Now the market is down about 10%ā¦ it could be the bottom, but it could just as easily go down another 10 or 20%, or moreā¦ no one knows
Thatās exactly why the key words I mentioned were āas a long term investorā a 40% S&P 500 drop is quite the time to begin buying. Even it it falls another 10% / 20% after you begin.
As a long term investor, what more would one be waiting for than that exact scenario.
My etf approach.
5% - 20% drop ā¢ regular buying
30% - 50% drop ā¢ chunk purchase
50%+ drop ā¢ monthly large purchases
Yes, and I do not particularly want to be throwing Ā£1K per month into a market which currently has a PE of almost 40. The risk reward back in March 2020 seemed slightly kinder.
Which is why Iāll save the large monthly buying for the inevitable large future corrections.
For now, I am happy with Ā£200 pm during exuberant markets.
Thatās market timing and has shown to be generally much inferior to āthrowing 1k per month into the marketā. Iām always baffled how the extreme power of compounding is never taken into consideration and everybody thinks theyāre the best at market timing
I hear ya. But for the first few years coming into the market I chose to be hesitant when others were greedy and greedy when others were hesitant.
I literally put into play, buffets No1 quote.
Once I build up a large enough portfolio, then I will not not bother with following the market. Itāll be autopilot with once a year rebalancing.
I just felt that 11 years into a bull market, that I would tread carefully entering initially in Dec 2018, then again in March 2020. My first purchase was the S&P 500 in the 20% December 2018 correction.
If an investor followed buffets āhesitant when other are greedy and greedy when others are hesitantā over the past 30 years, those investors would be incredibly wealthy.
I recall Sven saying in April 2020 that he is all in and would go on leverage should the market fall another 20%. (DYOR)
Yes PEs are sky high, but as the oracle himself once said: āitās better to buy a good company at a fair price than a fair company at a good priceā
This article from Lyn Alden (written before the current wobble) is interesting on this. I think she sees some sort of correction in tech stocks as a given as they are supported by the wall of free money, which the Fed is going to have to carefully walk back from. Market/GDP and CAPE etc are all near all-time highs - by any normal measure the US market is vastly overvalued at present.
Interesting read! I think whatās also interesting is that Global bond yields have risen, UK, EU, JP, CY etc
In all countries there seems to have been an equity and bond sell off. The worst hit have been the Tech stocks which are relatively overpriced. Itās a good thing for the prices to come back to reality in the long term
This is also my strategy - time in the market and timing the market and it has been effective . I donāt have plus yet so I use the Webull app to set price alerts to buy the dips.
This is the benefit of having not much money and just investing Ā£5-15 being my highest stock wise. Iām all in the red, but they are literally penny stocks with my highest being 0.50p but only for a few shares. To my understanding this really isnāt an all-out day to day trading app. Iām literally putting some money in, randomly checking it and who knows in a few years maybe these pennies have increased.
Far too many people (in my opinion) thinking theyāll get an immediate return on some stocks. Only put in what you can afford to lose people. Good luck!!
Most contradicting ever.
