Shares ... would you buy them now or wait ??

Discussion in 'Share Investing Strategies, Theories & Education' started by Kelly88, 21st May, 2019.

Join Australia's most dynamic and respected property investment community
  1. Zenith Chaos

    Zenith Chaos Well-Known Member

    Joined:
    10th Jul, 2015
    Posts:
    1,673
    Location:
    Sydney
  2. pippen

    pippen Well-Known Member

    Joined:
    10th Aug, 2016
    Posts:
    1,428
    Location:
    australia
    If you invest then a crash occurs remember if you drp you can get more units or shares at those lower prices too, adding to the compounding effect over the long term unless you are a forced seller due to lack of emergency or buffer funds.
     
    sharon likes this.
  3. Intrigued_again

    Intrigued_again Well-Known Member

    Joined:
    4th Mar, 2016
    Posts:
    217
    Location:
    Perth
    Lump sum vs DCA (using DRP figures) rough

    ASX:

    $100K invested 20 years ago = $2.4m
    $12.5k added every year for 20 years ($250K in total) = $2.4m

    CBA:
    $100K invested 26 years ago = $5.7m
    $20k added every year for 26 years ($520K in total) = $5.7m

    WBC:
    $100K invested 27 years = $3.8m
    $20.5k added every year for 27 years ($574 in total) = $3.8m

    It all depends what you can afford to do at the time a, truth is if we waited 2 years in 1991 instead of panicking thinking we’ll miss out we would be 40% better off today but it doesn’t hurt anymore.

    But as the scouts say always be prepared.
     
    Nuncasuficiente and Nodrog like this.
  4. pippen

    pippen Well-Known Member

    Joined:
    10th Aug, 2016
    Posts:
    1,428
    Location:
    australia
    What about babcock and brown or even poseidon back in 1969? o_O
     
  5. oracle

    oracle Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,454
    Location:
    Canberra

    I think what @Intrigued_again is trying to say is if you are fairly confident over the long term the trajectory of the price is going upwards then lump sum investing wins. If you look at examples

    For ASX lump sum you had to only invest $100K while with DCA you had to invest $250K (150% extra) to arrive at same dollar figure 20 years later

    For CBA lump sum you had to only invest $100K while with DCA you had to invest $520K (420% extra) to arrive at same dollar figure 26 years later

    For WBC lump sum you had to only invest $100K while with DCA you had to invest $574K (474% extra) to arrive at same dollar figure 27 years later

    Hence, if investing in great companies or index whose prices over the long term are virtually guaranteed to increase it makes sense to go lump sum if you have the cash.

    Cheers,
    Oracle.
     
    sharon, Observer and pippen like this.
  6. pippen

    pippen Well-Known Member

    Joined:
    10th Aug, 2016
    Posts:
    1,428
    Location:
    australia
    Yep fully understand! Just stirring the pot! But i guess back then how well did we know cba will be such giant? As well as wbc etc etc! I guess its hard to say when cba floated it would be a juggernaut and put entire life savings on it! It always looks good looking back but in 1996 its hard to think cba will return xxxx in 2020!
     
    Redwing and sharon like this.
  7. oracle

    oracle Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,454
    Location:
    Canberra
    You don't need to back single stock...you bet on the entire market and the Australian economy and hence buy the index :)

    I am very confident replace individual stock in the above example with index and the result would be the same lump sum investing in Australian index would beat DCA.

    Cheers,
    Oracle.
     
    WhatThe, sharon, Snowball and 3 others like this.
  8. pippen

    pippen Well-Known Member

    Joined:
    10th Aug, 2016
    Posts:
    1,428
    Location:
    australia
    Spot on, now you are talking!

    Old school lics, and good ol fashioned index funds/etfs. Set and forget. Game over.
     
  9. sfdoddsy

    sfdoddsy Well-Known Member

    Joined:
    19th Mar, 2019
    Posts:
    347
    Location:
    Sydney
    I checked all the research quoted above and, in spite of my misgivings about the frothy market, went all in a couple of weeks ago.

    I have a split income/growth strategy and went very conservative on the growth bucket, but the numbers are pretty convincing.

    That’s not to say I don’t check the markets daily with some trepidation.
     
    Froxy, geoffw and oracle like this.
  10. Kelly88

    Kelly88 Well-Known Member

    Joined:
    27th Jul, 2015
    Posts:
    75
    Location:
    Sydney
    @sfdoddsy: just curious, what did you buy a couple of weeks ago ? Tx

    Yes, I'm keen to buy LICs and index too !!!
     
  11. sfdoddsy

    sfdoddsy Well-Known Member

    Joined:
    19th Mar, 2019
    Posts:
    347
    Location:
    Sydney
    After a lot of research here and elsewhere, and chats to a couple of financial planners, we decided to go with what we felt comfortable with.

    We’ve put $2M into an income bucket using mostly the Vanguard wholesale Oz fund plus some Property and Infrastructure.

    Then we have put 1.5M into a conservative international bucket using 20 Vanguard International/20 Vanguard International Small Caps and 60 bonds.

    Then we consolidated our super into the QSuper balanced fund because of their contrarian strategy and minimal Oz exposure.

    Plus we have a chunk of cash/IP we’re still deciding on.

    So overall 40 Oz/income, 40 international/growth, 20 cash.

    Fingers well and truly crossed.
     
    tommo c, Nodrog, Redwing and 4 others like this.
  12. Brumbie

    Brumbie Well-Known Member

    Joined:
    5th Mar, 2018
    Posts:
    190
    Location:
    Canberra
    I have been using Value Averaging into the market to mitigate timing risk. I have a large amount to get in. Seems ok so far.
     
  13. Kelly88

    Kelly88 Well-Known Member

    Joined:
    27th Jul, 2015
    Posts:
    75
    Location:
    Sydney
    @sfdoddsy that is so much money ... my head spins now o_O;):eek:
     
  14. sfdoddsy

    sfdoddsy Well-Known Member

    Joined:
    19th Mar, 2019
    Posts:
    347
    Location:
    Sydney
    I’ll admit to being a tad nervous each time I pressed the Pay Now button, but after way more days than is healthy learning here and elsewhere, and more days and weeks doing back and forward tests on Sharesight and Portfolio Visualizer (great site BTW), I’m reasonably confident that if I haven’t chosen the absolute best strategy, I’ve at least chosen that won’t bite me in the ass.

    The real dithering was over the income bucket and avoiding the temptation to get greedy.

    Hopefully the dividend proselytizers are right.

    :)
     
    Mooser, Anne11, Brumbie and 1 other person like this.
  15. Kelly88

    Kelly88 Well-Known Member

    Joined:
    27th Jul, 2015
    Posts:
    75
    Location:
    Sydney
    @sfdoddsy: with that much money, I'd just put in term deposit and do not bother to invest at all ;):)o_O
     
  16. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    13,439
    Location:
    Melbourne
    Term deposits are actually some of the riskiest in terms of investing - as their returns adjusted for inflation can be almost 0. Once you count in opportunity costs, it can actually make a loss.

    The Y-man
     
  17. Lacrim

    Lacrim Well-Known Member

    Joined:
    25th Jul, 2015
    Posts:
    6,175
    Location:
    Australia
    The time to buy was anytime in the last few months prior to the election. Now they've gone up you guys want to pile in?
     
  18. jprops

    jprops Well-Known Member

    Joined:
    24th Sep, 2015
    Posts:
    885
    Location:
    Sydney
  19. jprops

    jprops Well-Known Member

    Joined:
    24th Sep, 2015
    Posts:
    885
    Location:
    Sydney
    Turns out you did win the lottery.
     
  20. Zenith Chaos

    Zenith Chaos Well-Known Member

    Joined:
    10th Jul, 2015
    Posts:
    1,673
    Location:
    Sydney
    If you had a lump sum to invest and were not confident of going all in, at least DCA or buy a small chunk while making a decision.

    $10k on VGS with 6 figures in the bank is easy to justify.

    As the big blind in a poker game it usually pays to check.