# Want to Invest but worried about Markets



## Thargor (24 May 2016)

Ive been procrastinating over what to do with my savings for way too long now, basically its all cash because I got spooked and got out of everything a while back when it looked like crisis 2.0 was upon us, its 50k Prize Bonds but that might aswell be cash seeing as I only get €50 every 6 weeks or worse. I have 30k in a Post Office account earning feck all and another 15k in my current account.

Now just as I approach 100k it looks like there might actually be another crisis looming, I know the long term amateur shouldn't try to time the market but with Brexit, bad start to 2016, possible end to QE and everything else it does feel like a bit bearish.

Vanguard ETFs were where I should have gone a couple of years ago but are mostly down on the year now same as most of the market.

Im basically frozen with indecision and need advice, any help appreciated. I dont really want to get a mortgage as I dont know if Im even staying in Ireland, Im 31 if that makes any difference.


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## Sarenco (24 May 2016)

Hi Thargor

First off, congratulations on putting by close to €100k at the relatively youthful age of 31.  Many of your peers will actually have a negative net worth at your age - I know I did.

Secondly, making negligible returns in an era of (essentially) zero inflation actually isn't too bad at all.  It could be a hell of a lot worse - ask anybody that invested in Irish bank shares or BTLs in 2007/08.

You should probably give us the details requested in the "money makeover" format but from what you have told us so far it sounds as though maintaining maximum flexibility is important to you.  Nothing wrong with that - keeping your powder dry makes perfect sense if you are still weighing up your life options.  Nobody ever regrets having cash at hand.  Are you contributing to a pension scheme of some sort?


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## Thargor (24 May 2016)

No pension scheme and no debts, thanks for your reply, I try to tell myself repeatedly that Im doing well with savings but it really irritates me and I get no pleasure from it, I feel like Im missing something major and that money should be working for me but it just isnt. I only earn about 30k a year in my current role its just I have very little outgoings and cheap rent so it just piles up at a rate of about 60%+ of earnings, I dont even run a car...


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## roncondon (24 May 2016)

stop worrying you are in a super position.

start a pension. 

Go and splash some of that cash and enjoy yourself , before you know it you will be tied down one way or another.


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## Fella (24 May 2016)

There's always a reason not to invest. Just do it if your thinking about it , I thought about it for ages made loads of excuses not to do it then invested , prices went up , invested more and prices went down . I was about 50k or more down , I deleted the app on my phone for checking and can't exactly remember. I'm nearly as young as you though so that's the main thing. We are likely to see a few crashes before we retire. I was a bit annoyed for about a week when I was down 50k on paper. But I invest now each month last time I checked I was closer to 20k down. It's just numbers on a page really. It's the right thing to do that's the main reason I do it ( well I think history shows it's the best way to make your money work). 
Just read the very helpful threads here on tax treatment of ETF's and make sure your clued up. Personally I believe in market efficiency so once your diversified accrpss sectors i would just pick stocks at random and never ask for advice on what to buy. Your guess is as good as anyone else's. 
Good luck


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## Gordon Gekko (24 May 2016)

roncondon said:


> start a pension.



Not necessarily, as the OP is a standard rate taxpayer.


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## Marc (24 May 2016)

You should absolutely get some professional financial planning advice.

See SFPI.ie for a certified financial planner.


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## Steven Barrett (25 May 2016)

Hi Thargor

You need to understand risk and return. If you are going to make returns greater than deposit, you have to take some investment risk and that means the value of your money going up and down over time. You have to decide how much risk exposure you are willing to take and what you are comfortable with. You do not have to go "all in" and invest all of your savings in equities, just a portion. 

You also need to have a think about what you want to do with your money and when. When you know that, you can put the plan in place so it starts working for you. 

Having money will not bring you pleasure. Spending it on meaningful experiences will. 


Steven
www.bluewaterfp.ie


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## SoylentGreen (25 May 2016)

There are many good companies paying decent dividends. Maybe start by seeking out these and looking at the fundamentals of the company. Then make your choice.


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## rob oyle (25 May 2016)

SBarrett said:


> Having money will not bring you pleasure.



Are you sure about that Steven??? I could introduce you to a few people at home (Donegal) that would beg to differ!


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## Steven Barrett (25 May 2016)

rob oyle said:


> Are you sure about that Steven??? I could introduce you to a few people at home (Donegal) that would beg to differ!



Let me rephrase 
Having money sitting in an account will not bring you pleasure


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## aristotle (25 May 2016)

If you are going to invest you need to have a minimum 5 year view, I think it should be a 10+ year view as the markets can be so volatile and if you already got spooked and cashed out then you need to consider if investing is for you.

Do you need the cash in the next 5-10 years? Buying a house for example? In that case I would not invest. You could be down 25% when you wan the cash at a point in time.

I would say start a pension and let that be your "investing" - depending on your fund choice you will be into equities and you are forced to take a 30+ year view as you cannot touch your pension until then. That makes it easier where you don't need to check the markets and worry about it and cash out with fear like you did. And you get your tax relief of course. A lot of people get spooked and cash out at a loss before buying back in when things are going back up and the cycle continues.

If you want to invest I would be looking at the bigger funds and ETFs e.g. Berkshire, S&P 500, FTSE 100, Europe and just plan to invest and add to it but assume you wont cash it out until 20 years time for example.

Based on my experience on investing over last 6 years I learned you need to look at investing like a pension works, its for 20-30 years where you do not need the cash in the meantime.


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## Boyd (25 May 2016)

Aside: if you have a pension (OP doesnt, I know), is investing in equities outside the pension considered too focussed on equities, since a pension is probably 70-80% allocated to equities already? Considering people always talk about diversification, I wonder is post tax equity investment going against that?


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## Thargor (25 May 2016)

Thanks for the suggestions so far all, still cant shake the feeling that its a bad time to get into equities though.


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## postman pat (25 May 2016)

Thargor said:


> No pension scheme and no debts, thanks for your reply, I try to tell myself repeatedly that Im doing well with savings but it really irritates me and I get no pleasure from it, I feel like Im missing something major and that money should be working for me but it just isnt. I only earn about 30k a year in my current role its just I have very little outgoings and cheap rent so it just piles up at a rate of about 60%+ of earnings, I dont even run a car...


Hi Thargor,
                just to add a little to other posts,dont just invest in things just to be doing something with your money,some years ago I did and lived to regret it!
                                                                       just enjoy the fact you have quite a good financial cushion and maybe wait for a good option to come along.

   Pat


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## Thargor (25 May 2016)

postman pat said:


> Hi Thargor,
> just to add a little to other posts,dont just invest in things just to be doing something with your money,some years ago I did and lived to regret it!
> just enjoy the fact you have quite a good financial cushion and maybe wait for a good option to come along.
> 
> Pat


This seems like the way to go atm alright, especially with the low inflation, just wish there was something I could do with the cash instead of leaving it sitting there, I know plenty of people have it a lot worse.


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## Sarenco (25 May 2016)

Hi again Thargor.

Having read through the thread again, I still think you should largely stay in cash for the time being. 

However, that is not because I have any idea what is going to happen in the stock market (or any other market) in the short (or medium) term but because I think you should keep your powder dry until you make some more fundamental decisions about where you want to go next with your life.  

Flexibility has a value.

Having said that, I do understand that you feel you should be doing "something" with your savings.

You told us you currently have the majority of your savings in prize bonds and a post office savings account.  Why not simply become an "interest rate tart" and move your money to whatever is the best instant account savings account?  An post currently pays 0.25% interest whereas Nationwide UK currently pays 0.77% on an instant access account.  So without increasing your risk you could triple your (admittedly modest) return (before DIRT).  You could even argue that you would be lowering your risk if you think the UK deposit guarantee scheme is a better mark than the Irish State.

You also told us you have €15k in your current account.  Why?  Just keep whatever balance you need in your current account to meet you anticipated expenses for the upcoming month (and to avoid fees, if relevant) and move the rest into a savings account.  It's not going to move the dial in a major way but even the smallest returns compound over time.

If you still feel an itch to make your savings work harder, why not dip your toe in the stock market as a live experiment?  Maybe open an online brokerage account (Degiro seems to offer the best value at the moment) and buy, say, €5k worth of shares in something like Foreign & Colonial Investment Trust?  It's not going to change your life but treat it as an education in terms of your own risk tolerance and the practicalities of investing.

As other posters have hinted - whatever you do, make sure you don't let life pass you by.  This isn't a trial run.

Best of luck.


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## Thargor (25 May 2016)

Thanks, Interest rates below 1% with DIRT make that kind of pointless though, I could literally do a few hours overtime on a Saturday which I often do and that would beat most returns on offer in Ireland and elsewhere these days, its an absolute joke. I remember a guy in Anglo Irish Bank in Galway once bumping me to an 8% return on a 15k lump sum just because I asked him if he could do any better than 7%, those were the days!

Agree about life passing me by though, Im very much wondering what the point of my job is these days.


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## Sarenco (25 May 2016)

Well, over the last 100 years, or so, cash has only ever produced a real (after inflation) return of around 1% per annum (before tax).  Over a sufficiently long time period even that low return compounds into something meaningful. 

For reference, equities have produced a real return of around 5% per annum over that timeframe (before tax and investment costs) but with some very significant ups and downs.

Let's play make believe for a moment (bear with me).  Say you won the euro millions in the morning and money was no object - what then?  In other words, what do want out of life?  Travel?  Familly?  Writing a novel or some other personal project?

In other words, I suggest you try and figure out your answer to that question first and then work out a financial strategy to match it - not the other way around. 

Your plans may change so build in some wriggle room.

I hope you don't find that too forward.  I usually leave the "softer stuff" to other posters - they are much, much better at it than I am.

Hope that helps.


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## Thargor (25 May 2016)

On a Euromillions win Id be off travelling the world but even with 100k thats not really an option, this is something I want to secure my future with not live it up for a few years and be back at square one. Id honestly be happy with a 4-5% return even but how to guarantee that? How low could ETFs like the Vanguard ones really go if I invested and then sh1t hit the fan again? You always hear that the causes of the last crisis were just kicked down the road and haven't really been dealt with yet, this is the fear that has me sitting at cash, a lot of commentators saying the whole market is way overvalued at the minute aswell...


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## Sarenco (25 May 2016)

Thargor said:


> Id honestly be happy with a 4-5% return even but how to guarantee that?


 
You can't.  Nobody can.  You just have to accept that as a fact of life.

You can't control or accurately predict the markets.  Nobody can.  

You can have a view.  But you have to accept that you could be wrong.

I have spent (literally) thousands of hours studying investment books and scouring data on the historic returns of various asset classes.  And I have no better idea than anybody else what's going to happen tomorrow.

There is absolutely no point worrying about things that are completely outside your control.  Zero.  

I really hope this doesn't sound like a lecture but I would suggest that you need to strike a balance between doing things that add value to your life today and looking out for your future self.  

It's a terrible cliche but prizes really aren't awarded to the richest man in the graveyard.


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## Suze456 (25 May 2016)

Statesavings.ie? 10 year National Solidarity Bond is 2.26% AER, no DIRT, if there's some you won't need for 10 years. If you don't find your purpose in life 

Also, if you are a single person on 30k, you are probably paying €2.7k in PAYE, so a pension/PRSA may be more tax efficient than just savings.

I left 25k in a credit union for almost 20 years..oops...just didn't know what to do with it! Our government wants us to spend, not save  But now I have some invested (got 7% after tax in the past 2 years), some in a 10 year bond, and a PRSA to at least get the tax relief. Have some with Rabo but they're cut their rates again so looking elsewhere. Best deposit rates seem to be regular saver accounts. And I'm told there are reasonably low risk (and low return) investment options.


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## Cervelo (26 May 2016)

Thargor said:


> cant shake the feeling that its a bad time to get into equities though.



Reading between the lines of your posts I believe your tolerance to risk is very low and if that is the case I would advise you to stay away from the stock market
and look for investments/products that have little or no risk and a guarantied return.


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## Thargor (30 May 2016)

Cervelo said:


> Reading between the lines of your posts I believe your tolerance to risk is very low and if that is the case I would advise you to stay away from the stock market
> and look for investments/products that have little or no risk and a guarantied return.


Its not that Im intolerant of risk I know you have to speculate its just if you look at any graph of the markets on a long term scale you see the euphoric run up to the dot com crash, then the recovery and bull run up to the financial crisis, and now we're back up again right at the tip of what could be another near identical peak, I just dont want to take a position and watch it crumble in a few months time no matter how much I diversify. Then again with QE continuing how do you know its not going to keep going this time...


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## Thargor (30 May 2016)

Sarenco said:


> *Well, over the last 100 years, or so, cash has only ever produced a real (after inflation) return of around 1% per annum (before tax).  Over a sufficiently long time period even that low return compounds into something meaningful. *
> 
> For reference, equities have produced a real return of around 5% per annum over that timeframe (before tax and investment costs) but with some very significant ups and downs.
> 
> ...


Thats very interesting thanks, I always assumed that would have been a negative return...


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## Daddy (30 May 2016)

I think most people would be very happy with a 4% return nowadays.  So the tax on that is approx  42%.  So net 2.4%.  Now to get the gross return requires taking a risk.  One gets a good return of approx 2.3% net from the 10 year National Solidarity Bond.  A long time I know but still pretty secure one would hope.   More expert people than I can put exact figures in here as to what I am saying as my figs are approximations.  Perhaps the OP should consider putting half the money at least away for the 10 years.  Sarenco - you talk a lot of sense.


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## Sarenco (30 May 2016)

Thargor said:


> Thats very interesting thanks, I always assumed that would have been a negative return...



A lot of people assume that but it's not actually true.

The latest Barclays Capital Equity Gilt Study gives a real (after inflation) return of 0.8% per annum for "cash" (UK treasury bills) over the last 116 years.  A retail depositor can usually do slightly better than an institutional investor with precisely the same level of risk (because of State deposit guarantees for retail deposits) by simply shopping around.

Inflation (CPI) is currently -0.1% so a deposit rate of around 0.7% is bang in line with the long term historic average.

Don't get me wrong - there have certainly been pretty long periods in the past where cash has not retained its purchasing power.  Over the 10 years to the end of 2015, for example, cash actually lost 1.1% per annum to inflation.

I'm also conscious that I'm ignoring tax (DIRT).  I personally think it is grossly unfair that somebody at your income level is required to pay DIRT at its current level but I'm afraid you will have to lobby your local TD on that one.

Finally, I would be slightly cautious about investing too much in 10-year NTMA solidarity bonds, even if you are almost positive that you will not need to touch your savings for the full 10 years.  A tax-free return of 2.26% p.a. might look attractive right now but would it have looked attractive (relative to prevailing inflation/interest rates) in 2006?  A lot can change in 10 years.


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## ThatNewGuy (2 Jun 2016)

username123 said:


> Aside: if you have a pension (OP doesnt, I know), is investing in equities outside the pension considered too focussed on equities, since a pension is probably 70-80% allocated to equities already? Considering people always talk about diversification, I wonder is post tax equity investment going against that?



I'd like to repeat this question if it's alright - 20% of my earnings go into a pension which is (between the funds) ~70% equities.
Are more equities ok for personal investing, if I chose a different strategy to my funds'? Or what other options are there (aside from getting swept up in BTL mania?)

Thargor, I think you were on the property pin too - you seem frozen in indecision and I think no matter whether you sit on it or invest it you'll be worried.
If I were you, I'd allocate say 20k and invest that monthly over the next 1 or 1.5 years to get comfortable with it, and if the markets tank 50% you're barely down in net worth. At the end of that 1.5 years you can make a more informed decision based on how the world economy looks and your own experiences in following the stock strategy you chose.

You're also thinking about the apocalypse scenario  - trust me if THE crash comes, you can say goodbye to your 100k one way or another either through bail-ins (where 100k DGS means nothing to a broke government) or hyperinflation. Basically it's not even worth worrying about that because there's jack all you can do about it!


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## Thargor (2 Jun 2016)

Thanks Thatnewguy, what strategy to choose though? And maybe the big crash isn't coming but overvalued does seem to be a consensus opinion at the minute on world markets, I think Im going to sit on my hands for now until Im more sure about travel/career plans...


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## Sarenco (2 Jun 2016)

ThatNewGuy said:


> I'd like to repeat this question if it's alright - 20% of my earnings go into a pension which is (between the funds) ~70% equities.
> Are more equities ok for personal investing, if I chose a different strategy to my funds'? Or what other options are there (aside from getting swept up in BTL mania?)



You should look at your financial position as a whole rather than focusing on any particular account (retirement or otherwise) in isolation - anything else is mental accounting.

For example, if you are already maximising your pension contributions, you might consider increasing the allocation to equity funds in your pension somewhat and saving your after-tax money in (tax exempt) State savings bonds.

Outside of investing through tax-deferred pension vehicles, bear in mind that paying down debt (including mortgage debt) is very often the best investment option - guaranteed, tax-free and cost-free return equivalent to the rate of interest being charged on the loan.


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## Techhead1 (2 Jun 2016)

If you are worried about crashes then long term stock investment is not for you. Buy the stock and leave it alone. Over 30 years + dividends you should see a return.

Buy stock in good solid comanies. Read up on warren B


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## Thargor (2 Jun 2016)

Techhead1 said:


> If you are worried about crashes then long term stock investment is not for you. Buy the stock and leave it alone. Over 30 years + dividends you should see a return.
> 
> Buy stock in good solid comanies. Read up on warren B


Arrrrgh, I know that, Im talking about there being an imminent crash or multi-year bear market, look at a chart of the FTSE or some other index, we are at a near identical peak to the dot-com and financial crisis, I do want to build an investment portfolio Im just wondering if sitting on it for a year might be best first...


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## PGF2016 (2 Jun 2016)

Thargor said:


> Arrrrgh, I know that, Im talking about there being an imminent crash or multi-year bear market, look at a chart of the FTSE or some other index, we are at a near identical peak to the dot-com and financial crisis, I do want to build an investment portfolio Im just wondering if sitting on it for a year might be best first...


Techheads advice is still relevant. If you're in it for the long haul a crash shouldn't be an issue. It's an opportunity to invest more.


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## joe sod (2 Jun 2016)

Thargor said:


> Thanks Thatnewguy, what strategy to choose though? And maybe the big crash isn't coming but overvalued does seem to be a consensus opinion at the minute on world markets, I think Im going to sit on my hands for now until Im more sure about travel/career plans...



yes but the "consensus opinion" has been saying the market is over valued since 2009. Actually I dont remember any consensus opinion ever being enthusiastic about the markets for investing maybe the last time was 1999. Ive made this point in other threads late last year when the markets had a big hiccup . Then the market was worried about the collapsing oil price and china jitters. Oil in january was nearly down to $25 and everyone was betting it would go to $10 with very convincing arguments, that was actually the consensus. Now oil is over $50, in other words doubling in a few months. No commentator predicted that, so oil demand did not collapse.
        I think you should take the advice of sarenco and maybe invest in a fairly conservative investment trust,


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## Marc (3 Jun 2016)

Market timing doesn't work. Period.

Stocks *always* have a positive expected return otherwise why would anyone ever buy them. Markets go up 70% of the time on an annual basis and about 50% of the time on a daily basis.

If you are concerned about volatility then put less in stocks and periodically rebalance.

If you are worried that YOU might be the problem - i.e. buying or selling at the "wrong time" then you need to work with an adviser who can pull you back from the edge of the cliff and stop you harming your portfolio.

In studies working with an adviser adds between 1.5% and 3%pa to portfolio returns compared to doing it yourself and the vast majority of this is just maintaining an investor's composure during market cycles.

As Ben Graham (Warren Buffett's mentor) said; "the investor's chief problem and even their worst enemy, is likely to be themselves"


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## RehmanUK (3 Jun 2016)

Thargor said:


> Ive been procrastinating over what to do with my savings for way too long now, basically its all cash because I got spooked and got out of everything a while back when it looked like crisis 2.0 was upon us, its 50k Prize Bonds but that might aswell be cash seeing as I only get €50 every 6 weeks or worse. I have 30k in a Post Office account earning feck all and another 15k in my current account.
> 
> Now just as I approach 100k it looks like there might actually be another crisis looming, I know the long term amateur shouldn't try to time the market but with Brexit, bad start to 2016, possible end to QE and everything else it does feel like a bit bearish.
> 
> ...


This is the best post about the Investment, i like this too muchh,,,,,,


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## joe sod (26 Jun 2016)

Its not easy investing today, what a shock Friday was, the biggest one day move ever. The shock wasnt a result of a dodgy emerging market economy china or russia as you would expect but from europe. It just shows the importance of europe to the global economy. Europe has been stagnant for 10 years now with stock markets basically going no where on average. In my opinion it would be silly to bail out of european etfs and stocks now. I think the drop was exaggerated because markets had rallied in the days before expecting remain to win the referendum. But this is the time to continue to invest in european etfs. In theory thats what people are told to do but nobody does because of the emotion and difficulty in investing more money in investments that are not rising in value


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## Sarenco (26 Jun 2016)

joe sod said:


> Its not easy investing today, what a shock Friday was, the biggest one day move ever.



Not even close.  

The biggest one day drop in stock values globally was Black Monday - 19 October 1987.  The DJIA plunged over 22% in a single day.


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## landlord (27 Jun 2016)

Sarenco said:


> Not even close.
> 
> The biggest one day drop in stock values globally was Black Monday - 19 October 1987.  The DJIA plunged over 22% in a single day.



Maybe Joe Sod was referring to this.....

http://www.independent.ie/business/...illion-is-wiped-from-markets-sp-34835988.html


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## Thargor (27 Jun 2016)

Prize Bonds not looking so bad now, best investment Ive made lately. Wonder if this is going to be a full bear market...


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## Techhead1 (28 Jun 2016)

When are people going to start buying again?. I may hold off until the autumn. Possibly some great value out there if your brave


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## joe sod (28 Jul 2016)

Who would have thought that in January with the huge pessimism and the big sell off and now after the brexit vote we are now reaching new highs again in some markets. Everyone was talking about 2008 crash again, all the technical analysis was saying bear market. Yet nobody predicted that within 6 months we would be reaching new highs. Nobody in January predicted that


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## joe sod (28 Jul 2016)

Who would have thought that in January with the huge pessimism and the big sell off and now after the brexit vote we are now reaching new highs again in some markets. Everyone was talking about 2008 crash again, all the technical analysis was saying bear market. Yet nobody predicted that within 6 months we would be reaching new highs. Nobody in January predicted that


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## galway_blow_in (28 Jul 2016)

joe sod said:


> Who would have thought that in January with the huge pessimism and the big sell off and now after the brexit vote we are now reaching new highs again in some markets. Everyone was talking about 2008 crash again, all the technical analysis was saying bear market. Yet nobody predicted that within 6 months we would be reaching new highs. Nobody in January predicted that



the people who move markets shorted for all they were worth in january and early february , shook out the small guys and scooped up cheap stocks , the market is rigged in the short to medium term as in its big money which moves it in either direction


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## PGF2016 (28 Jul 2016)

galway_blow_in said:


> the people who move markets shorted for all they were worth in january and early february , shook out the small guys and scooped up cheap stocks , the market is rigged in the short to medium term as in its big money which moves it in either direction


Any evidence to support this?


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## Sarenco (28 Jul 2016)

The idea that any group of investors could rig a market with a total value of ~$70 trillion is interesting.  That takes some serious organisation!


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## darag (28 Jul 2016)

The best advice is simply to buy equities if you want a return on your savings.  There is no other way.

It's not easy advice to follow - at every single point in time since I first bought some ETFs over 15 years ago, it's been a bad time to buy equities by all accounts.  In fact the more informed you are about world economic affairs, the more pessimistic it always looks.  My biggest purchase of ETFs happened at close to the worst time possible over the last 20 years.  Many times, having read and studied the state of the global economy, I've come to the conclusion that I should cash out but I'm a procrastinator and lazy.  These character flaws surprisingly worked to my advantage.

Generally speaking the last couple of decades have not been great for equities in terms of volatility.  And yet when I last checked my portfolio - something I only do once a year - nominally it's increased in value by over 120% during the 15 years.  The annualised return must be higher than this number would suggest since I've been adding to it on and off.

I do not recommend following the official AAM "top 10 Irish shares" advise for equity investors - it's too much work dealing with individual shares, messing around with quarterly dividend cheques and the portfolio has horrible geographical and sectoral diversification.  There's simply no reason to waste time on that nonsense when you can buy properly diversified and automatically rebalancing ETFs these days with tiny expense ratios.

Everything else I "invested" in has been a waste - BES schemes, Forestry Funds, managed unit funds, etc.


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## Gordon Gekko (29 Jul 2016)

Agreed...virtually my entire investment strategy is based around putting the maximum into the world equity market over a 40 year period in the cheapest manner possible.


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## Sarenco (29 Jul 2016)

darag said:


> I do not recommend following the official AAM "top 10 Irish shares" advise for equity investors



To be fair, that's not the consensus view around here - much less the official line.  

I personally think it's nuts for anybody to invest any significant portion of their net worth in such a concentrated portfolio.


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## Dan Murray (29 Jul 2016)

Gordon Gekko said:


> Agreed...virtually my entire investment strategy is based around putting the maximum into the world equity market over a 40 year period in the cheapest manner possible.



Hi Gordon

A comment and a question.....

I think I understand the rationale for your approach. However, it takes liathróidí to do - not everyone is so equipped, metaphorically speaking!

My questions is: why stop at 100%, why not say 110% or 115% equities to get an extra "kicker"?



Sarenco said:


> To be fair, that's not the consensus view around here - much less the official line.



Completely agree - it just has slightly more support that the world equity market rigging theory espoused earlier in this thread!


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## Gordon Gekko (29 Jul 2016)

Hi Dan

It's all pension money, but if I end up with a decent slug of personal cash, I probably will layer around 20% gearing on to a well diversified all-equity strategy.

It may sound stupidly naive, but my view is that I'll do better over time because I fully accept that I will see huge drawdowns periodically.


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## joe sod (29 Jul 2016)

darag said:


> The best advice is simply to buy equities if you want a return on your savings.  There is no other way.
> 
> It's not easy advice to follow - at every single point in time since I first bought some ETFs over 15 years ago, it's been a bad time to buy equities by all accounts.  In fact the more informed you are about world economic affairs, the more pessimistic it always looks.  My biggest purchase of ETFs happened at close to the worst time possible over the last 20 years.  Many times, having read and studied the state of the global economy, I've come to the conclusion that I should cash out but I'm a procrastinator and lazy.  These character flaws surprisingly worked to my advantage.
> 
> ...



Great post. The general investment theme over the last 15 years as you pointed out has been extremely negative in general. There have been many predictions of impending crashes and the internet has exaggerated this which has contributed to all the volatility. The last optimistic period was the 90s. Yet even in todays pessimistic period the stock market has delivered once you did not invest in one country or sector. In hindsight the sell off in January was madness and did not make sense especially when compared to now. We have just had a brexit vote, multiple Islamic attacks in Europe, and a likely trump presidency, all highly negative you would think, yet markets are hitting highs, well then what was January about, surely if sell offs were based on logic, then now markets should be selling off


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## galway_blow_in (29 Jul 2016)

PGF2016 said:


> Any evidence to support this?



any explanation as to why the s+ p shed 12% from around xmas of 2015 to around february 10th of 2016 and why its recovered more than 16% since then ? , bar a sharp drop in oil prices ( again due to shorting ) , there was no big catalyst at the time


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## galway_blow_in (29 Jul 2016)

Sarenco said:


> The idea that any group of investors could rig a market with a total value of ~$70 trillion is interesting.  That takes some serious organisation!



retail investors are a minority , institutional investors dictate market movements on a daily basis , long term the cream rises to the top so earnings and the overall health of a company will be borne out but short term , the market can easily be manipulated , what else explains massive sell offs ?

2008 doesnt count , that was a multi generational event


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## galway_blow_in (29 Jul 2016)

darag said:


> The best advice is simply to buy equities if you want a return on your savings.  There is no other way.
> 
> It's not easy advice to follow - at every single point in time since I first bought some ETFs over 15 years ago, it's been a bad time to buy equities by all accounts.  In fact the more informed you are about world economic affairs, the more pessimistic it always looks.  My biggest purchase of ETFs happened at close to the worst time possible over the last 20 years.  Many times, having read and studied the state of the global economy, I've come to the conclusion that I should cash out but I'm a procrastinator and lazy.  These character flaws surprisingly worked to my advantage.
> 
> ...



there are times when its clearly a good time to buy , the s + p was cheaper in early march of 2009 than it was at the end of 1996 and less than half the price of where it was at in mid to late 2007 or even early 2000 , bar a complete armageddon situation , early 2009 was dirt cheap , even late 2008 was extremely cheap , the market is still only 50% more expensive than it was in march 2000 so its not cheap but not remotely as expensive as it was at the time of the dot com bubble if you subscribe to the idea that over the very long term , the markets always go up  , it might be  best to have a system where you buy every month regardless but from looking at history , it would appear it might be better to instead buy every two or three years instead , as recent as february of this year , the market was the cheapest it had been in nearly two years , today its at an all time high again


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## galway_blow_in (29 Jul 2016)

joe sod said:


> Great post. The general investment theme over the last 15 years as you pointed out has been extremely negative in general. There have been many predictions of impending crashes and the internet has exaggerated this which has contributed to all the volatility. The last optimistic period was the 90s. Yet even in todays pessimistic period the stock market has delivered once you did not invest in one country or sector. In hindsight the sell off in January was madness and did not make sense especially when compared to now. We have just had a brexit vote, multiple Islamic attacks in Europe, and a likely trump presidency, all highly negative you would think, yet markets are hitting highs, well then what was January about, surely if sell offs were based on logic, then now markets should be selling off



the last fifteen years has not been that negative , the biggest bull market in history was from 1982 to march 2000 , the s+ p went up eight fold , prior to 1982 , the markets no more than doubled every twenty years , what has happened since the year 2000 is probably just a levelling out of the enormous bull market from the early eighties to the turn of the millenium , the FTSE has indeed performed horribly this past fifteen years and more however but its not a very well diversified exchange , its top heavy with energy and banks compared to the S + P

as for what january and early february were about , the standout issue was the massive drop in the price of oil , neither demand or supply have changed that much since then , its just shorters over shot to the downside which explains the relatively huge recovery in oil price this past six months , banks were accused to being exposed to oil but the banks were clearly showing what exposure they had to energy debt and it wasnt significant , the market sell off was simply a case of traders capitalising on the sell off in oil and extending it to the overall market , if they can make money on the downside , great ! , this manipulation however if it causes retail to sell is a form of market manipulation by the big dogs


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## Sarenco (29 Jul 2016)

galway_blow_in said:


> the market can easily be manipulated



Really? 

Do representatives of these manipulating institutions gather around a large board room table on a quarterly basis in Dr Evil's HQ, high in the Swiss Alps?  Or do they communicate (in masonic code, obviously) through the dark-net? 

Frankly, the idea that a market as vast and deep as the global stock market can be manipulated by a limited number of institutional participants is the stuff of pure fantasy.  



galway_blow_in said:


> 2008 doesnt count , that was a multi generational event



Unlike the dot-com crash, or the Asian crisis, or the 1987 crash...


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## Sarenco (29 Jul 2016)

galway_blow_in said:


> any explanation as to why the s+ p shed 12% from around xmas of 2015 to around february 10th of 2016 and why its recovered more than 16% since then ?



The stock market has a 15%+ drawdown every two years, on average.  

There is nothing even remotely exceptional about market movements over the first six months of this year.

What moves markets?  Fear and greed.  

Same as always.


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## Sarenco (29 Jul 2016)

galway_blow_in said:


> there are times when its clearly a good time to buy



Wow!  If you can time markets with such precision you must be extraordinarily wealthy.  

Perhaps you could let the rest of us in on the action.


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## galway_blow_in (29 Jul 2016)

Sarenco said:


> Really?
> 
> Do representatives of these manipulating institutions gather around a large board room table on a quarterly basis in Dr Evil's HQ, high in the Swiss Alps?  Or do they communicate (in masonic code, obviously) through the dark-net?
> 
> ...



those crashes ( and sharp falls ) had major causes , the sharp sell off in january of this year had no cause , that the market then recovered and made new highs for no apparent reason further distinguishes it from those examples you give , after black monday of 1987 , the market didnt make new highs for nearly two years


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## galway_blow_in (29 Jul 2016)

Sarenco said:


> Wow!  If you can time markets with such precision you must be extraordinarily wealthy.
> 
> Perhaps you could let the rest of us in on the action.



i was not a market participant prior to early 2012 but it doesnt take a genius to know the 2008 crisis would eventually blow over , buffet was telling people to buy in late 2008 when the s+p was only slightly below 10000 , it fell more than 30% before bottoming , it was still a good buy when he said to do so but was a better buy in early 2009


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## PGF2016 (29 Jul 2016)

galway_blow_in said:


> any explanation as to why the s+ p shed 12% from around xmas of 2015 to around february 10th of 2016 and why its recovered more than 16% since then ? , bar a sharp drop in oil prices ( again due to shorting ) , there was no big catalyst at the time


I guess the answer to my question is no.


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## joe sod (29 Jul 2016)

galway_blow_in said:


> those crashes ( and sharp falls ) had major causes , the sharp sell off in january of this year had no cause , that the market then recovered and made new highs for no apparent reason further distinguishes it from those examples you give , after black monday of 1987 , the market didnt make new highs for nearly two years



Well that was my point, you are basically saying the same as me now, but if you look back at your own posts from January you too were highly negative. The January sell off felt very real and everyone was talking about 2008 again, the markets were falling by 3% day after day on little news. Even George Soros chimed in with his 2008 prognosis during the height of it.
      I think they blame  computer algorithms programmed to follow patterns for most of the sell off now, if x at this when y at this then sell. Then suddenly we were in a bear market caused by computers, its only when the computers were switched off and rational minds began buying  that january turned into a blip.


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## galway_blow_in (29 Jul 2016)

joe sod said:


> Well that was my point, you are basically saying the same as me now, but if you look back at your own posts from January you too were highly negative. The January sell off felt very real and everyone was talking about 2008 again, the markets were falling by 3% day after day on little news. Even George Soros chimed in with his 2008 prognosis during the height of it.
> I think they blame  computer algorithms programmed to follow patterns for most of the sell off now, if x at this when y at this then sell. Then suddenly we were in a bear market caused by computers, its only when the computers were switched off and rational minds began buying  that january turned into a blip.



the official reason given for the sell off at the start of the year was the huge drop in oil price and how it would effect the rest of the market , that oil has recovered so strongly in such a short period of time shows the drop was manipulated in the first place ( shorting ) , the big guns knew there was no danger to banks akin to the crisis of 2008


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## PGF2016 (30 Jul 2016)

galway_blow_in said:


> the official reason given for the sell off at the start of the year was the huge drop in oil price and how it would effect the rest of the market , that oil has recovered so strongly in such a short period of time shows the drop was manipulated in the first place ( shorting ) , the big guns knew there was no danger to banks akin to the crisis of 2008


You might like this: 
http://www.fool.com/investing/2016/07/29/smart-sounding-reasons-during-sell-as-the-market-s.aspx


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## darag (30 Jul 2016)

galway_blow_in said:


> i was not a market participant prior to early 2012 but it doesnt take a genius to know the 2008 crisis would eventually blow over


Indeed, it doesn't take genius to "predict" what happened in the past.  It's especially handy that even if the past behaviour is somewhat inexplicable, you can fall back on conspiracy theories.  You are guaranteed to never be wrong.

Look at last weeks lottery numbers: 2, 4, 5, 27, 40 and 47.  It doesnt take a genius to know that the 10-25 number block would be underrepresented given it dominated previous drawings.  Also, it's obvious that the numbers would eventually hit a 50-50 equilibrium between odd and even numbers after weeks of skewed results.  And the lack of a jackpot winner just continued the pattern of the last few months so no surprises there.

Just because plenty of people "analyse" financial markets in this way, doesn't mean such analysis is anything but hot air.  The skill is picking the winning horse before the race not the day after while reading the sports section of the newspaper.   You seem to have convinced yourself that you have developed insight into market movements.  Test yourself by committing now in writing where you think the main equity and commodity indices will be in, say, 3 months time. It's a lot harder, isn't it?

But anyway, this is exactly the sort of discussion that causes these threads to become derailed and useless.  Using hindsight provides nothing useful to a discussion about buying equities now.  Since Thargor first posted, the Vanguard global equity ETF is up almost 5%; in that time we've had brexit, a major escalation of terrorist attacks in the west, military coup in Turkey, etc. etc.  It's all just noise.


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## galway_blow_in (30 Jul 2016)

darag said:


> Indeed, it doesn't take genius to "predict" what happened in the past.  It's especially handy that even if the past behaviour is somewhat inexplicable, you can fall back on conspiracy theories.  You are guaranteed to never be wrong.
> 
> Look at last weeks lottery numbers: 2, 4, 5, 27, 40 and 47.  It doesnt take a genius to know that the 10-25 number block would be underrepresented given it dominated previous drawings.  Also, it's obvious that the numbers would eventually hit a 50-50 equilibrium between odd and even numbers after weeks of skewed results.  And the lack of a jackpot winner just continued the pattern of the last few months so no surprises there.
> 
> ...



so you think past trends in markets are irrelevant and should never be considered ?


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## Jim2007 (30 Jul 2016)

galway_blow_in said:


> so you think past trends in markets are irrelevant and should never be considered ?



Well since you claim dark sources manipulate the market, the trends are invalid since you have no way of knowing which ones have been manipulated and which ones not.


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## galway_blow_in (30 Jul 2016)

Jim2007 said:


> Well since you claim dark sources manipulate the market, the trends are invalid since you have no way of knowing which ones have been manipulated and which ones not.



i dont remember referring to them as dark , rigged is probably the wrong word to use but the markets are manipulated by big money in the short term , there was no reason for the big sell off in january of this year , that oil recovered from $27 per barrel to $50 within four months shows you that market was also manipulated by financial market engineering


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## Raskolnikov (8 Aug 2016)

Thargor said:


> Vanguard ETFs were where I should have gone a couple of years ago but are mostly down on the year now same as most of the market.
> 
> Im basically frozen with indecision and need advice, any help appreciated. I dont really want to get a mortgage as I dont know if Im even staying in Ireland, Im 31 if that makes any difference.


The folly of market timing.

If you had invested a portion of your savings in the Vanguard Total Stock Market ETF as of when you created this thread, you'd be up about 6%.


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## joe sod (20 Aug 2016)

It is interesting that back in January when the market was tanking, this site had plenty of people including myself giving their theories and what was happening, the general trust was negative and some people had sold their investments or were waiting it out. It turned out to be a great buying opportunity but hardly anyone was saying that. Now after the big rally which even shook off the brexit crisis, there is little comment. If people were rational well surely now would be a time to start going negative and talking about maybe taking some money out of the markets


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## Deauville (21 Aug 2016)

I would suggest to anyone wanting to take control of their investing to go onto 'The Book Depository' and getting 'The Little Book of Behavioral Investing' and 'A Wealth of Common Sense'.
Follow that up with 'Fooled by Randomness' (all very enjoyable reads).
also,
Study up the various risks associated with investing (market, asset, sector, geographical, currency inflation .....).
Do whatever allows you to sleep well at night.


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