World Indices Roundup 2020

Would you have invested during the previous Cold War?

 

Lovely picture - Perfectly appropriate for the dollar cost averaging 'carry on as normal' crew, but would you feel comfortable dumping a large % of your net worth into stocks in a lump sum in the current climate?

If the US gets a second wave (they're really still in the first) it could be armageddon.

Definitely appreciate the 'invest what you can, when you can' mantra, but what about when you're holding a lump sum from a recent property sale, and looking to invest in one of the frothiest markets in history from a p/e perspective?

 

Maybe just dca over a measured time frame of 2 years or so.

 

I started investing in shares in November. The literature said that 60% of the time a lump sum is better than DCA but DCA might let you sleep better at night. I decided to drop around 40% as a lump sum and DCA the rest.

If I had dumped 100% I would have had a big crash to start off with and to recover from which over the next 20 years I am sure I would have done so. But DCAing allowed me to mitigate those higher prices with some lower purchasing which has helped me sleep better and has lessened the hit on my paper asset value.

There is no 'perfect time' to enter the market where the world is at peace and we live in some sort of no news utopian paradise. The only time is now, tomorrow only brings another world or local problem to worry about that many will use an as excuse to not take action .

 

If you do have a lump sum it obviously does change things a bit. Easy for me to sit here and say "yeah I'd throw it all in right now" but it would definitely feel different being in that scenario.

"Investing is ultimately an exercise in regret/risk minimization".

You must decide what your risk tolerance is. If you invest it all now you face the risk of a big drawdown, and if you can't take it you will pull out and lock in big losses. If you wait on the sidelines, you face the risk of getting it wrong, and being forced to invest at higher prices in the future.

1. Are you investing for the long-term? Are you close to retirement? If you don't need the money in the next ~7 years, it should all be invested.
   
2. How much are you willing to lose? If your lump sum is $500K, how big of a loss could you stomach - 100k... 250k... 400k? Will you pull your money out when it reaches that stage?
   
3. You don't have to invest all of it in equities, leave some in cash or invest in bonds. Set yourself an asset allocation (e.g. 80/20 equities/bonds)
   
4. How diversified do you plan to be? If you're only looking at one country (Aus/US) then the volatility will be high. How about investing in every country in the world? If you're more diversified, then your ups and down won't be as extreme.
5. Remember, the economy =/= the market. What you see out there may not be as relevant to future returns as you might think.

Yes, lump sum investing is the better option most of the time. And probably is now considering we're in a bear market. But DCA is definitely not a bad idea - just decide on a time-frame, pick when you're going to invest (e.g. 5th day of every month), how much each time, and stick to that plan.

Another way I like to think about it: Imagine you have been investing regularly for thirty years. You don't have a lump sum to invest. All your money is already invested. What do you do? Do you decide to sell your portfolio when the valuation is too high?

The market has never been this high, should I wait to invest? - Passive Investing Australia

 

An eery silence in here. Has COVID destroyed the art of Technical Analysis forever?

 

I think Elliot T. Wave is simply depressed and agoraphobic rather than sick with CoVid.

 

Sorry, been very busy participating in SPP’s
Looking forward to my eofy statement from commsec. Have a sneaky suspicion my dividends have almost double yoy, next year will paint a different picture due to companies not paying dividends, will cross that bridge when I get to it.

 

Nope
Quantitative Easing and MMT did though
Don’t fight the Illuminati

 

In follow up to the US rally discussion.

 

SPY moving back into resistance zone 3,144-3,156. Market disconnected from reality again Possibly close to second wave if we see a breakout.

SPY


No advice

 

Nah, @Alex Straker has already replied. I'm sure @kitdoctor will jump in shortly as well.

 

This was unexpected, impact on US stock market/oz
US shocks economists by adding 2.5 million jobs in May as unemployment declines to 13.3%

 

The May unemployment rate is actually 16.3%, not 13.3%, because 4.7 million workers were misclassified as employed, but are really unemployed.

and...

Total jobless claims are approximately 35.89 million. (The implied unemployment rate is 23%.)

 

Speede..those numbers don't seem to be stopping the DOW , it's up above 800 again in last nights trading and will affect the ASX in a positive way next week as the carona spread is very different then the spread over the GFC .good.luck .

 

@Alex Straker

Second wave up ...or down

 

I have been busy tackling a kaboodle kitchen install and completing an analysis of the big four banks, so I haven't read the latest posts. Here's my update.

XJO has now met a key price target of 6019.5 where Minor wave C equals 0.618 x wave A. The wave pattern is technically complete, so the rally from the 23 March 2020 low either finished on 4 June 2020, or there is the potential for one minor push to a slightly new high.



I favour the latter scenario. The next key price level to watch is 6129.6 where the rally will have retraced 0.618 x Intermediate wave (A). My preferred wave count is that the expected small push higher will end Intermediate wave (B). If an (A) – (B) – (C) zigzag is playing out Intermediate wave (C) is heading lower than the 23 March 2020 low. An interesting relationship is that the collapse of February/March 2020 was 75% of the fall experienced during the 2007-2009 GFC.





Other options exist for the form of the correction (and of course for the larger context), for example, a large Intermediate wave (B) wave triangle may develop taking the price action sideways with a slight downward bias.



Keep a watch on the 15 or 21 June 2020 or thereabouts.

No advice. DYOR.

On another subject check out Love is Blue by Jeff Beck on youtube. Great guitar playing!

 

Lines up with the Uber large whales who need the XJO to tag 6200 before June 30

 

Is this in reference to institutional investors wanting a strong end of financial year result?

 

SP500 barely blinked on it's way through that resistance. What do we expect if it breaks 3272 'limit'?