Investment & Investing

Yeah checking my e-mails I got the same.

I'm not sure this thread is a reasonable barometer of the general public

If you have 4 years then stick it all in Tesla stock. Musk is best buddies with the president so unlikely to lose over the term.

I lol’d. The chances of Musk and Trump remaining buddies for the next four years are slim to nonexistent.

stick it all in Tesla stock with 5x leverage

I lol’d. The chances of Musk and Trump remaining buddies for the next four years are slim to nonexistent.

I think there's a good chance Musk doesn't make it to the inauguration.

A very loose Q, but when it comes to diversifying portfolios, is there a right/wrong time to look at doing it?

Since I set up my Vanguard account in Feb 2021 all I've done is monthly deposits into Lifestrategy 100 and sort of set and forget; in my mid 30s now and not anticipating selling/withdrawing for at least another 20 odd years. It's performing well (I guess) and know it is obviously UK weighted; just trying to grasp at this point if I'm doing anything wrong...

gradually I think. if you do it all at once then there's the chance that the market swings just before you transfer everything.
If you were to, say, transfer 10% a week over 10 weeks then the chance of it going 'wrong' is lower. similarly, the chance of it going really well and you getting a random bump is also reduced...

Oh, I wouldn't be shifting everything I have to elsewhere; would split up what I currently do (£300 a month generally) into other funds

Lol. I was going to say I'm 100% stocks and will re-assess about 5 years before retirement.

If you are rebalancing you would normally do that in one go, no? On the basis that, if you're not trying to time the market you can't know if it is going to move up or down, so may as well move to the weighting you want sooner rather than later and minimise transaction costs.

I think @cmburns is talking about de-risking rather than rebalancing right?

Everyone has their own opinions, but the idea of de-risking or target date retirement funds is based on the time before the pension freedoms of 2015. You basically had to buy an annuity with your full savings pot so were protecting against a dip as you came up to retirement.

Now, you can drip feed an income out of your SIPP, most of your fund will remain invested for another 20+ years so you still want it working hard for you rather than 80% bonds.

I was thinking of it as analogous to dollar cost averaging. You're just smoothing a reinvestment over a slightly longer period of time specifically because you're not trying to time the market.
Presumably less risk.

I didn't do this, I just transferred away from the Vanguard Lifestrategy fund to an index tracker in one go and crossed my fingers. Didn't check if the timing was right because there was nothing I could do if it was or wasn't.

Well, I think he wants to up the risk for 20 years and then begin to derisk. The Vanguard Lifestrategy presumably is a bit safe over long term

Lifestrategy 100 is 100% equities, so quite 'risky', but as mentioned, a bit too UK weighted for some tastes.

up the risk for 20 years and then begin to derisk

I think this is the point of the Target Retirement 2045 fund. You just buy it and they derisk for you as you approach retirement.

Some would say that fund is too risk-averse and too UK-weighted as well.

if I'm doing anything wrong...

It's really down to individual risk appetite, so very hard to say. I have mostly equity index trackers in my ISA, some UK but various outside for a bit of diversity.

In practice market-cap weighting means this still ends up being massively over-weight US tech and their overseas suppliers, finance and pharma in terms of sector risk.

This is on top of various SIPPs from ex-employers that are mostly in lifestyle things similar to the one you have already, although they're at various stages of drawing down from equities to fixed income since I'm older.

thinking of it as analogous to dollar cost averaging. You're just smoothing a reinvestment over a slightly longer period of time specifically because you're not trying to time the market.

Presumably less risk.

I see what you mean, but I don't think they are the same. In one scenario you are typically constrained by not having the money available in a lump sum, you invest it out of your earnings month by month. The averaging is a side benefit of that, it's not the objective.

In the other you have to sell y to buy x and the cost averaging works both ways, ie it works against you selling y - you'll have to sell more units of y when the price is low to buy your units of x. You can't know what the short term x vs y movements will be, and you are equally likely to gain vs lose on those short term movements whenever you make the switch. So, to me, it seems rational to invest in what you have chosen to invest in straight away, rather than stay partially invested in something you've decided you don't want to be invested in.

It often comes up when people have a lump sum, eg an inheritance. Do you invest it all at once or drip feed it in?

When I have decided I want to invest

The posts by @cjr and @useless sum it up well. You're certainly not doing anything wrong. Being 100% in Equities at your age is sensible and lifestyle 100 is a credible option. At the same time you could choose to do something different if you have a reason to do so.

The UK stock market is not the force it once was, but that doesn't mean it's going to disappear any time soon. Tracking the US / global market has risk as it's to a large extent driven by a handful of highly valued tech giants. It comes down to what your view is on those and other big, long term questions.

Just as expected with the number of real estate developers going into receivership at a 10 year high there maybe an opportunity to short the market. I know that house hold debt in my part of the world is reaching record levels as well as credit card payment delinquencies. The employment numbers seem off considering the amount of lay offs in automobile/airplane manufacturing as well as in the technology field. Being an industry insider working for a company that makes construction materials, I have seen a swift decline in production. I'm not suggesting to ape into shorts but to pay attention to the increasing unemployment numbers. This will accelerate mortgage defaults leaving the banks with an increasing supply of real estate along side of the demand for people trying to consolidate auto loans/credit card debt using their homes for collateral. Do the research for yourself and decide whether you can capitalize on this opportunity. Look into Kingsett capital real estate investors.

How do you actually go about shorting a stock? Is it just another option on trading platforms like Trading 212, or is it more complicated?

It isn't an option for ISAs, but if you have a CFD account with Trading 212 you can short stock.

https://www.trading212.com/cfd

I personally wouldn't though!

77% of retail investor accounts lose money when trading CFDs with this provider.

Nice warning to have at the top of that page. So I've a 23% chance of making money. I like those odds!

That's the spirit!

I expect some people take it as a warning but some might see it as a challenge!

#23%