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your investment doesn't plummet
Spot the global catastrophe
If there is a real financial melt down that the hedging you pay funds to implement can’t deal with and you ‘lose’ a lot of money then you’ll have bigger things to worry about - your job will be gone and there will be no petrol in the tanks. Zombies will walk the streets!
(And - if you look at long term historical returns from ‘safe’ investments you’ll see that on a long enough timeline it’s pretty good money. There will be ups and downs along the way but stay in long enough and you do well.)
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Howard
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What chart are you looking at?
FTSE shows a massive tank due to Covid
https://www.lse.co.uk/share-prices/indices/ftse-100/charts.html
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I do get all that. That doesn't actually deal with the point I made though - that you yourself acknowledge there are big economic factors inflating the markets at the moment. If those change, that's when you'd see the correction. That's not a remote risk, to my mind.
The question is whether you should buy in now, when markets are already inflated. Will they keep growing? Maybe, but loads of signs are out there that valuations are already too high. If you believe that is true, is investing your sum right now in that market with that risk (and an aim to get maybe 4% growth) better than an absolutely guaranteed, no capital risk c.2%?
Sensible approach might be to do a bit of both, and take the guaranteed return vs. pre-existing mortgage debt on some plus some share investment in the hope it doesn't crash.
hippy
andyfallsoff
I don't disagree in substance, but this entirely relies on an assumption that the conditions for that equity growth will continue so your investment doesn't plummet.
All you've said about equity markets being inflated due to PE, low interest rates etc could be taken as a reason why overpaying is a safer choice as you're taking a guaranteed return with zero capital risk instead of a hope of an increase (which, if shares are all overvalued right now, might wipe out and also take a chunk of your capital)