Thoughts on my investment Strategy

But do they really need to? Do yields need to rise and PE needs to drop. Based on the current risk free rates I would say the yield on offer now in equities are reasonable. And PE slightly higher than historical average is not un reasonable considering the record low rates. Now if rates do rise and rise significantly then sure. But that’s if and when they do. In the mean time i think all is well considering the current climate.

Some will say rates will return to normal levels again. Maybe they will but you could be sitting on the sideline waiting a long time for rates to normalise. Or rates never go back to historic norms and suddenly the current yields and PE doesn’t look bad.

My crystal ball is not working so I can’t tell you which way it will go.

 

I haven’t got a clue anymore. In past decades I seemed to be able to sus the cycle out fairly well but post GFC with central bank financial repression it’s made fools out of everyone who thought they had some chance of timing the market.

Now it’s back to basics with getting the money into the market ASAP regardless to generate cashflow then plough that back into the market for even greater cashflow. Rinse and repeat ... . At the end of the day that’s what it’s really all about.

 

SP doesn’t need to drop for PE ratio to decrease or earnings yield to increase. Earnings growth will do that.

 

“risk free rates”

That’s just it. Low int rates has created much risk in borrowing levels.
That is not going to end well let alone the latest air strikes escalation in the Mddle East will eventually put pressure on equities markets running at all time highs.

Anyway, each to their own. That’s the fun bit.

 

Geo political risk seems to be there all the time. Can anyone point to a time in the last 50 years when there wasnt tension in the middle east?

 

Some are saying this chart may go above the 100 dollar mark very quickly ..imho..

 

Well wasn't that whole middle east thing a kerfuffle over nothing. I thought this skirmish could of been a good time to deploy the last part of the cash stash. But 1 week later and the market has moved higher.

I was still holding onto some little hope that even a minor correction was around the corner. But any doubt in my mind about the lack of merit in market timing has now dissolved. I have loaded the remaining cash into the investment platform ready to fire off this coming week. Still giving a little more thought about how I will split it across Aus / International and active / Passive. But I will be all back in by the end of the coming week.

 

@Big A one less thing to worry about!

 

Yes. I actually feel much better about the whole thing. Now my focus is on getting my hands on more cash so I can buy more equities. It’s addictive. I’m a equities shopaholic.

Do we have a PC rehab group for members who have a equities habit?

 

HaHa maybe there should be! Most of us seem to be just hanging around reading (or writing) about coffee, alcohol or food while we wait for the next round of dividends/distributions to roll in so we can go shopping for more equities

 

I can’t imagine just waiting around for dividends to come in before I get my next hit. Lucky I still have working income that flows through as well so I can get hits more regularly.

On a serious note though it’s bizarre how addictive this investing thing is. Much harder to get that high with buying property. Can’t pick up more property every month like you can buying equities.

I have a friend who I have been talking about investing to over the last few years since I started my addiction. Showed some interest but never moved forward with any investing until a few months back. Coming from property he was more comfortable starting with the unlisted property stuff as I was. Now he is getting monthly and quarterly distributions and he is scrambling to get every spare dollar into more investments. He has seen the light. He cant believe he did not start sooner. He has now had a taste of the investing drug called dividends / distributions.

 

We are no longer working (retired) but are lucky enough to have good cash flow from a few different sources so I was a little tongue in cheek in my comment. We will not be buying any more property unless its a PPOR. Still have some to sell down which will flow into equities. Equities are much easier to look after.

 

Well one day (eventually) the markets will turn for the worse. I'm hoping it's quick and short, bit if it's protracted, I'll be hoping you're all still here.

Talk of coffee and beer will be a nice distraction.

 

If you don't sell then there is no loss.

The question is, we haven't seen a prolonged down turn in recent years. I wonder how it will impact dividend distributions.

 

I'll be here @ChrisP73. I'm not sure what you are suggesting but I have been around for a while and well remember Black Monday 1987, the Dot com bubble 2000 and GFC 2008. I expect to see at least one or more crashes in my time. When it does happen we will still be investing as we did during those times

 

I’ll be here. Probably second guessing all the decisions made. Should I have done this or done that. Should I be doing x or z now.

And that’s why I will be here. So you can all tell me to just keep on going as per schedule. And hopefully I will listen to you guys.

 

I'll be here too. Even thought the rationale side of me knows exactly what to do, it will be great to have the wise heads around to keep me sane.

 

That’s it @Big A and @ChrisP73 we all have doubts. When the market falls and keeps falling I used to wonder if this time we were wrong. You need a plan that you are happy with. Then when you think the financial world as you know it is ending just stick to the plan. Well, that’s what we did in the past and that’s the plan for the future. Stick to the plan!

 

me too guys!

 

@Big A in time, maybe the mods will even grace you with your own annual thread rollover!