Is it a good time to enter the market?

[Trembling Hand]

Fund #1 5 year return 38% }
Fund #2 5 year return 28% } average of 25% 5 years
Fund #3 5 year return 19% }
Fund #4 5 year return 17% }
FUND #5 1 year return 8%
All these funds are classed as growth
they have mixed asset allocations with the majority in the domestic market 65%

If you had half a brain when you did your expected P&L you would of 1/2 the return at least just to see what would happen if the next five years don't match the last five of a spectacular bull run.
Do you realize what the Average return of funds are when not in a ripping bull market??
If you think we are in the same environment that lead to an average growth over five years of 25% enjoy your ride.

 

[Doh!]

Can I name funds in this forum ??

 

[prawn_86]

Can I name funds in this forum ??

Yes, providing that the information you post is correct (obviously).

 

[Doh!]

Yes, providing that the information you post is correct (obviously).

Colonial First state 452 Geared share
Colonial First state global Resources
First choice australian share
Perpetual industrial share
ING tax effective income

 

[Doh!]

If you had half a brain when you did your expected P&L you would of 1/2 the return at least just to see what would happen if the next five years don't match the last five of a spectacular bull run.
Do you realize what the Average return of funds are when not in a ripping bull market??
If you think we are in the same environment that lead to an average growth over five years of 25% enjoy your ride.

Obviously we are in a different market now
Which brings me back to the original statement “is it a good time to enter the market now?”

As I said earlier I’m here for the long term not five years.

At some stage the market has to turn, you all sound like that time is far far Away

 

[ShareIt]

great time to trade, not invest!

 

[cuttlefish]

Doh! - I did a quick review of figures based on info on this site:

http://www.colonialfirststate.com.a...D=65&ProductID=40&Public=1&FundTransfer=false


The resource fund appears to have averaged 25% p.a. (so compounded its done 250% over the whole time). Thus you would have made a good profit if you'd invested 5 years ago. (though the interest costs and initial commision and outlay would have meant your average return was only 19% p.a. vs the 25% p.a. the fund made - though I haven't taken into account any tax implications both on the gain and on the interest).

Nobody can predict with certainty the likelihood of this performance continuing - there has been a strong commodities bull market for several years and the market has changed a lot in the past 6 months - if you believe that the resources run will continue into a new leg it might be worthwhile to put some into it - though I still think you are getting stung way too much on the entry fees and commission and question this.

You should not trust any numbers given to you and verify them all yourself, and should stress test them for things like large interest rate rises (what if rates went to 15% or more) and for much more conservative returns (i.e. work on a figure like 10% p.a.). Funds do often have negative returns in flat or falling markets - they're obliged to invest in stocks via their allocation rules so will be close to fully invested in stocks even if they have a negative market view.

I'd still be waiting for the dust to settle on the current market fallout before taking a first time entry to the market but thats only one opinion.

Funds also always like to show you their 'good' periods when trying to attract you, so have a look at longer term life of the fund etc. - i.e. as the saying goes DYOR.

 

[Doh!]

Doh! - I did a quick review of figures based on info on this site:

http://www.colonialfirststate.com.a...D=65&ProductID=40&Public=1&FundTransfer=false


The resource fund appears to have averaged 25% p.a. (so compounded its done 250% over the whole time). Thus you would have made a good profit if you'd invested 5 years ago. (though the interest costs and initial commision and outlay would have meant your average return was only 19% p.a. vs the 25% p.a. the fund made - though I haven't taken into account any tax implications both on the gain and on the interest).

Nobody can predict with certainty the likelihood of this performance continuing - there has been a strong commodities bull market for several years and the market has changed a lot in the past 6 months - if you believe that the resources run will continue into a new leg it might be worthwhile to put some into it - though I still think you are getting stung way too much on the entry fees and commission and question this.

You should not trust any numbers given to you and verify them all yourself, and should stress test them for things like large interest rate rises (what if rates went to 15% or more) and for much more conservative returns (i.e. work on a figure like 10% p.a.). Funds do often have negative returns in flat or falling markets - they're obliged to invest in stocks via their allocation rules so will be close to fully invested in stocks even if they have a negative market view.

I'd still be waiting for the dust to settle on the current market fallout before taking a first time entry to the market but thats only one opinion.

Funds also always like to show you their 'good' periods when trying to attract you, so have a look at longer term life of the fund etc. - i.e. as the saying goes DYOR.

Thank you Cuttle Fish

I really appreciate you taking the time to crunch some figures for me.

 

[arminius]

now is a better time than, say, august 10/ 07.
the greed in us want to buy at the exact low, absolute bottom.
i try to think how much resource shares would be if the USA were all rosy- unaffordable is my conclusion.
be happy with the company, invest for the right reasons, be happy with a price-regardless if it goes lower. otherwise you may get a little depressed.

 

[josjes]

Re: Is it a good time to enter the market ?

you only make a paper loss the day you pull out
I'm looking at 30 years + of investment

i believe i'm starting out the correct why under the wing of a managed share fund

If you are in for 30 yrs plus, now is the best time to enter the market, after this 30% correction has happenned. Start with 30% of your fund, if it goes down again, progressively buy more.

I would start looking at LIC like ARG, AFI (a long standing investment company for over half century) or Index fund like STW or SFY.

Disclaimer on

 

[Doh!]

Re: Is it a good time to enter the market ?

If you are in for 30 yrs plus, now is the best time to enter the market, after this 30% correction has happenned. Start with 30% of your fund, if it goes down again, progressively buy more.

Can you explain your idea further I'm not quite with you

 

[josjes]

I mean if you have say $100K, start buying $30K. Sit back and relax, when the market dip again, buy another $30K etc.
The market has already gone down 30% from high. Do you think it will go down for another 30%, I don't think so, IMHO. Your risk of dipping into the market now, is so much less than if you waded in 2, 3, 4 months ago. i.e the risk and reward ratio is in your favour.

 

[Aussiejeff]

No. Wrong cliche for the wrong time.

try "The market can stay irrational longer than you can stay solvent"

As said by John Maynard Keynes when using other peoples money. Said some 70 years ago after he went bust.

Spoken like a true prophet, eh?....


AJ

 

[Trembling Hand]

Spoken like a true prophet, eh?....


AJ

Didn't you like that one?

 

[gdaf]

here's a way of looking at it:

If the average investor expects their blue chip stock market investment to achieve 25% year on year (as it would seem people do), this implies the ASX200 index by the end of the century to be trading at:

4118046071574

 

[Trembling Hand]

If the average investor expects their blue chip stock market investment to achieve 25% year on year (as it would seem people do), this implies the ASX200 index by the end of the century to be trading at:

4118046071574

LOL. I'm leveraging up even more now I know that.

 

[IFocus]

Re: Is it a good time to enter the market ?

Fund #1 5 year return 38% }
Fund #2 5 year return 28% } average of 25% 5 years
Fund #3 5 year return 19% }
Fund #4 5 year return 17% }
FUND #5 1 year return 8%
All these funds are classed as growth
they have mixed asset allocations with the majority in the domestic market 65%

I under stand the first year I'll make a 4k loss with commission Fund entry fee $2000 Advisor $2000

I will pay intrest on the line of credit loan as interest only
any loss will be partially tax deductable

I will reinvest the divendends

Doh as TH has already said we are unlikely to see a Bull Market like the last 5 years any time soon so theres no immediate hurry. Plenty of time to research your idea.

Market trend is currently down. No bottom insight yet.

The fund entry and adviser fee is simply outrageous. If you are determine to go ahead to buy into a fund open a Comsec account and buy your own units no adviser fee and some have no entry fee.

There is some very good advice on this thread, suggest read it several times take some of the blunt replies as market reality not personally.

Good luck

 

[Doh!]

LOL. I'm leveraging up even more now I know that.

READ the quote 25% average over 5years, Yes in a bull market
There are peaks and troughs this happens to be a trough
How deep, nobody knows. hence my original question
On average the highs out-weigh the losses. True or false

 

[Doh!]

Re: Is it a good time to enter the market ?

Doh as TH has already said we are unlikely to see a Bull Market like the last 5 years any time soon so theres no immediate hurry. Plenty of time to research your idea.

Market trend is currently down. No bottom insight yet.

The fund entry and adviser fee is simply outrageous. If you are determine to go ahead to buy into a fund open a Comsec account and buy your own units no adviser fee and some have no entry fee.

There is some very good advice on this thread, suggest read it several times take some of the blunt replies as market reality not personally.

Good luck

Well your all going to love this. If i don't follow the advice i have to give the advisor a $1000 fee for the cost of preparing the advice.
should i take the loss on the chin
and start planning from scratch
You all seem to have plenty to comments about my scenario and I respect the Knowledge, how did you start your journeys. What reference material etc
To me the share market is very secretive nobody likes to share wealth

 

[Trembling Hand]

READ the quote 25% average over 5years, Yes in a bull market
There are peaks and troughs this happens to be a trough
How deep, nobody knows. hence my original question
On average the highs out-weigh the losses. True or false

Doh! It seems that cuttlefish has done more research into the actual numbers than you. Do you expect the next 5 years to be like the last? No one I have read believes so, not even the most bullish. Even the most basic back of the envelope calculations shows what a waste of $$ you are about to embark on IF you don't get 25% avg return. If you think you can get 25 % average knock yourself out.

I wish you luck. Thats my last words on the subject as there is only so much I can :horse: