Upto 100k Investment

C

castle4

Registered User
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8
Hi all,
I have recently received an inheritance and have upto 100k to invest.I still have a mortage of 200 k on a very cheap tracker.No debt other than mortgage.
No current pension in my job but wife is in public service and will have a good pension.
Our aim is to lock the money away for 7-10 yrs as we will have 2 kids hopefully starting college in 10 yrs time
I have met with 2 individual financial consultants about investing.Both agents have come back with Standard Life-Global Absolute Return Bond-Gars.
Any thoughts on this,no experience of investing other than what I read.The last few days have me spooked with the price of oil and the current state of China.Any ideas or views please.
 
it looks likely that we are in a bear market now , if we are , then its probably better to wait a number of months as a better opportunity for value might present itself
 
galway_blow_in said:
it looks likely that we are in a bear market now , if we are , then its probably better to wait a number of months as a better opportunity for value might present itself
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This makes no sense.

If we are in a bear market, and I don't know wether we are or not, then now is a good time to invest. A bear market means pieces are low, it is better to buy when prices re low than when prices are high.
 
I would have also thought along the lines of cremeegg. Get in now while the price is low and get more bang for your buck.
 
cremeegg said:
This makes no sense.

If we are in a bear market, and I don't know wether we are or not, then now is a good time to invest. A bear market means pieces are low, it is better to buy when prices re low than when prices are high.
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With all due respect this does make sense to me....
I would not describe a bear market as one in which prices are low. (Lower perhaps...relatively speaking).

A Bear market......"The generally accepted measure is a price decline of 20% or more over at least a two-month period."

Late 2007 the Dow Jones peaked. Mid to late 2008 the market had dropped by 20%(bear market). The market then continued to drop to approximately 53% below the peak!!!!!

Also during the year 2000 downturn the Dow Jones dropped significantly below bear market territory.

Personally I would also wait.
I believe this downturn will be far worse than the last two, but I know I am in the minority.
I am also aware that my point of view would generally be perceived to be one where an investor is effectively timing the market.......(generally frowned upon approach!!)
 
cremeegg said:
This makes no sense.

If we are in a bear market, and I don't know wether we are or not, then now is a good time to invest. A bear market means pieces are low, it is better to buy when prices re low than when prices are high.
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a bear market means a drop of 20% from the highs , i know we have not dropped that far on the u.s markets yet , if we do however get there , its not like we will bounce back immedietely upon hitting 20% , the risk is to the downside right now , of that there is little doubt , a correction and a bear market are two different things , a correction allows one to buy on the dips , in a bear market , the trend is always down with thee odd bear market rally , doesnt matter how well many companies are doing , stock price will go down , take GM for example , forward PE of around seven , raised outlook and dividend last wednesday , stock dopped about 6% last thursday on friday , good news doesnt matter in a bear market

id at least wait to see if the 1830 intraday low from last august holds ,if it doesnt , there is no support for about 10% below , the amount of shorting alone will almost certainly ensure this point is tested

OP , you could always put some of your funds in now and buy on the way down
 
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no one really knows but i doubt its anywhere as bad as 2008 - 2009 as the entire global banking system appeared to be on the brink , that was the worse sell off since the 1930,s when you consider the market really was flat from the high of 2000 to 2007 with a bear market inbetween from 2000 to early 2003 , the energy market is down more than it was in 2008 in many cases and the mining sector is down more than it was back then , while the commodties rout is unprecedented , its not as systematically important as the banking sector , not near
 

How will you know when its safe to invest in stocks again?

The S&P 500 has declined by 20% or more on 12 separate occasions over the last 70 years but is up nearly 15,000% per cent over that period.

Many of the world's stock markets have declined by 20% or more since last spring. Would you prefer to buy something for full price or when it's on sale?

You think an even bigger sale is just around the corner? You might be right. Or wrong. Who knows?
 

most markets ( major ones ) are still priced higher than the historical average right now
 
Well, the WSJ had the forward PE of the S&P at 15.65 as at market close on Friday last.

But my point is that all valuations are relative. Look at the inverse of the PE ratio and compare it with bond yields. How do you value equities in a world where the yield on German government debt is negative out to 5 years?
 

i didnt know you compare equities to bonds anymore than you do apples to oranges , american treasuries are more expensive than stocks and european soverign bonds are even more expensive than american treasuries
 

We are all currently discussing/comparing past stock market indicators, which is not always a good way of telling what will happen in the future.
It is present economic fundamentals that tell me this stock market is going significantly lower.
Focussing on the US economy.....
Manufacturing is tanking,
GDP is on the way down and constantly being revised further down.
The Baltic dry index is at record lows.
Us debt is sky rocketing.
The US labour force participation rate is poor and the jobs report although good is a lagging indicator and I believe this jobs report will drop significantly in the next few months.
etc....
and that coupled with the emerging market turmoil to me spells trouble ahead!!!

As for when it's safe to invest again, who knows, I guess the same fundamentals will have to be analysed.
 
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First things first, how much do you need in your pot to fund your kids in college in 7-10 years time. Then we can work out the return that you need. We also need to assess the level of risk that you are comfortable with, see if there are any gaps between what you need and what you are comfortable with and address those issues.

Standard Life have an Absolute Return Bond fund (bond fund that can short the bond market) and the GARS fund which invests in many things (it has a huge amount of different strategies going on within the fund). The GARS fund has done very well to date although some say the fund has got too big. One thing for certain, you pay for both of these funds. They are at the higher end of cost.

You have a long enough investment period to invest and make money, even if the markets fall a bit more. If you are uncomfortable with putting all your money in in one go, drip it in over the year, making monthly investments. That way, if markets fall after you made your initial investment, you only have €8,300 in it. Likewise, if markets rise, you will only make on €8,300 and you buy in at higher prices too.

If there was no risk, there would be no returns either. You have a long term view of what you want your money to do. Don't get spooked by the what has been happening over a number of weeks.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 

Is there a particular reason why you believe those widely known facts are not already reflected in stock prices? If it's in the press, it's in the price, etc.
 
galway_blow_in said:
i didnt know you compare equities to bonds anymore than you do apples to oranges , american treasuries are more expensive than stocks and european soverign bonds are even more expensive than american treasuries
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Well if you are of the view that fixed-income is more expensive (presumably on a risk-adjusted basis) than equities, then logically you would invest in equities?
 
Sarenco said:
Well if you are of the view that fixed-income is more expensive (presumably on a risk-adjusted basis) than equities, then logically you would invest in equities?
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Sarenco said:
Well if you are of the view that fixed-income is more expensive (presumably on a risk-adjusted basis) than equities, then logically you would invest in equities?
Click to expand...

fixed income is where people go at times of uncertainty , regardless of value , you could argue that the logical investment right now is mining or energy stocks , afterall they are historically cheap
 
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