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To add, common wisdom says you shouldn't try to time the market if you're a long-term investor, which is largely true. If you're drip feeding then by all means get in whenever. But with a lump sum timing it wrong will hurt and it'll take quite a while to get back to break-even depending on how severe the correction is. This cannot and will not last, and when a proper correction happens there'll be a lot of bag holders around...
ElGonzo
@frankenbike
⚠ Long boring post alert, skip if you're not a nerd ⚠
I wanted to look into this minimum investment horizon or whatever you want to call it myself. The received wisdom (as given up thread) is not to invest if you're going to need the money in less than 5 years. So here's some data to back that up to some degree.
I took the "Vanguard Global Stock Index Fund - Investor Accumulation" (I think this is similar to Vanguard FTSE All Cap fund but that has only been going since 2005) and plotted up the return over each period of the specified length since March 1978. So, the question is, if I bought this fund at a random point between now and 1978, and I held it for the specified period of time, how would I do? If you want to invest for 3 months, for example, you take each 3 month period since 1978 (March to June, May to July, ..., Sept to Jan 1979, ..., up to Sep 2021) and plot them as a distribution. The boxes are the quartiles with the line in the middle being the median return over that period. The whiskers are worst/best case. This is obviously crude baby statistics compared to what actual investment people do but it does give some idea. Note this is not a percentage - a return of "3" means your £1k becomes £4k
What does it mean?
If you're holding for less than 3 months it's almost a coin flip on whether you gain money or lose money. After leaving it invested for 1 year there's a 75% chance you've not lost money and a 50% chance you've gained more than 14% (pretty good). After 3 to 5 years there is a decent chance (>75%) of an actual return of around ~15%. But even after 10 years you only have a 90% chance of gaining money!
Worst case scenarios: if you buy this fund for 1 month you could lose 18%. Over 3 months you could lose 26%. Over 12 months you could lose up to 40%. Even after 5 years you could end up down 37%.
If you have a pile of cash and you want to put most in savings and risk a little bit in S&S to try to match inflation - would that work? If you had £10k for 2 years, say, put £2k in S&S for ~9% a year and £8k in savings at 1% - you'd expect to end up with £10537 (a measly 5% over 2 years) but absolute worst case you might get something like £9300. £10k in 1% savings gets you £10201. Or to put it another way, you're gambling with £700 to try to win around £300, potentially a bit more - which isn't too bad, but it's probably easier to just find £15/mo in your budget that you can pay in instead.
Long story short, don't buy S&S for the short term I suppose