Would you invest in ASX today?

Discussion in 'Share Investing Strategies, Theories & Education' started by Noobieboy, 1st Apr, 2019.

Join Australia's most dynamic and respected property investment community
Tags:
?

Invest?

  1. Yes, do it!

  2. No, wait!

Results are only viewable after voting.
  1. Noobieboy

    Noobieboy Well-Known Member

    Joined:
    10th Aug, 2017
    Posts:
    1,151
    Location:
    Utopia
    So I’m thinking of starting my investment journey in ASX (probably VAS). Thinking of doing a bimonthly $1,000 investment (weather and life permitting).

    Plan? 5 years minimum (hopefully longer). If I do need to cash it out due to purchase/house/life etc, I’m prepared to take a loss.

    Question, would you invest now? Or wait for the long awaited but elusive recession? Maybe America would go into GFC 2.0? Thoughts?
     
  2. Barny

    Barny Well-Known Member

    Joined:
    16th Oct, 2015
    Posts:
    2,512
    Location:
    Australia
    Interesting info I came across today, it has taken between 3 months and 27 months for a recession to follow an inverted yield curve. These are the last 7 recessions and time frames from inversion to recession.

    686E2F83-BD57-4E9F-A154-84F3BEE22E93.png
     
    Zenith Chaos likes this.
  3. Noobieboy

    Noobieboy Well-Known Member

    Joined:
    10th Aug, 2017
    Posts:
    1,151
    Location:
    Utopia
    Yes. Shane Oliver talked about inverted yield curve. Something along the lines that it could predict a recession and it could be a nothing. Apparently in last 50 years it predicted a recession correctly, except when it didn’t 3 times. And it did take a while as you mentioned.

    I’m not sure if I just should sit on my hands or just invest .... the choices!
     
  4. PropStar

    PropStar Member

    Joined:
    3rd Jul, 2015
    Posts:
    18
    Location:
    Nsw
    Some sage advice from another thread:


    The trick is be invested as soon as you can, for as often as you can and for as long as you can.
     
    Ryan Thomas, Anne11, sharon and 2 others like this.
  5. oracle

    oracle Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    779
    Location:
    Canberra
    The problem with timing the market is usually you need to get it right not just once but twice.

    The first step of either to buy or sell depends on whether you are in the market or not. Let's assume you are in the market.

    You take out your timing crystal ball which says there is a recession coming soon and it's best to lock in your profits and exit the market. So now you need to be right on

    1) Getting out at the top

    Assuming you got that one right.

    2) You still need to again get the timing right on when to get back into the market once the market is at the bottom.

    Many people get one of the timing right but not the other.

    Let's just say no one and I mean no one has been able to successfully time the market consistently. I highlight the word consistently here. Reason if there was anyone out there who could do it consistently they would be way way richer than Warren Buffett and we all know Buffett is still one of the richest person.

    As you mention you are planning to regularly buy in that case there is no way you can lose by buying now. If the market continues to go up you are already in the market so you benefit. If the market goes down you are already regularly buying so now your $1000 will buy lot more shares than before so you benefit. I would be happy with that deal.

    In the end how much money you end up having will not depend on how good you time the market but rather will depend on how much money you save and invest and for how long.

    Cheers,
    Oracle.
     
    Pier1, Zenith Chaos, sharon and 5 others like this.
  6. Nuncasuficiente

    Nuncasuficiente Well-Known Member

    Joined:
    11th Oct, 2018
    Posts:
    62
    Location:
    Perth
    Start now. I could tell you my opinion of what the market will do over the next 12 months to 5 years but it would just be my opinion.

    The quick facts if you buy now are:
    1) Regardless of market fluctuations you will get 5 years of dividends (around 4.65% at today’s price for VAS)
    2) Dollar cost averaging your way in as you described will protect you from a market fall as you will continue to buy more at lower prices, averaging out your buy price and increasing your dividend return.

    If you wait:
    1) If the market declines you will get no dividends for the period you are on the sidelines (so you would need to make greater or equal capital gains after waiting than you would make in dividends and capital gains after averaging down from today.) It will be very hard to do this.
    2) If the market continues to accelerate you miss out on dividends and capital gains. Possibly buy in much higher than today and risk losing capital closer to your planned sell off.

    My 2c is buy now, dollar cost average as you said, reinvest your dividends and check back in 5 years. Also if you can keep the funds you invest in to VAS seperate from the money you save for property you will never need to sell at a loss.
     
    Last edited: 1st Apr, 2019
    Zenith Chaos, DoggaPP, Anne11 and 4 others like this.