Ahead of her Found & Flourish Money Workshop on the 1st of October, Lisa Conway Hughes tells us her response when clients ask “Is now the right time to invest?”
Time IN the market vs. Market Timing
I have written a lot about how the time invested in the market was more important than trying to predict what markets would do. However, I thought I would talk more on the subject because I did some really interesting research for an interview.
Clients often ask me if now is the right time to invest. This is especially common if they are investing a new lump sum such as a bonus or an inheritance. The answer I have to give them is “I don’t know”. No one can. Experts can make an educated guess based on research and analysis but it’s impossible to know when a market is at its lowest and when it’s at the top.
The secret to investing is to stick with the right investments through thick and thin and to not to try to get too clever. Last week I stumbled across a great fact to prove this point on the Vanguard website and here is their chart:
What this shows you is that if you invested £100,000 in 1986 into the FTSE All-Share Index, what the value would be 20 years later in 2016. Now if you had just left it to be invested and hadn’t tried to guess the market by selling and then buying at different times then you would have £1,828,115. However, if you decided to get caught up in stock market hype and you happened to not be invested on only the ten best days of those 20 years you would have halved your return. You would end up with £969,239. This is crazy!
Now I know this is not how it would work in real life. No-one would be 100% invested in the FTSE All Share, you would have a well-diversified portfolio, but it does prove an excellent point.
I would love to hear your best (and worst) investment stories!
Want to learn more?
I will be running a money workshop with Found & Flourish on October 1st where I will be coaching you through all of the above and more!
You will learn:
- How to be financially savvy
- Pension planning and pension schemes
- Tax relief, what it is and how to benefit from it
- Why financial health matters
- How to set financial goals
By the end of this workshop, you will have a better understanding of how to get the most out of your business including tax advantages and tax relief, pension planning, financial goal setting and more.
Looking forward to seeing some of you there!
About the author
Lisa Conway-Hughes is a qualified Financial Advisor with fifteen years of experience and a Fellow of the Personal Finance Society. She also blogs and speaks publicly on financial issues. After 8 years as a financial adviser, Lisa realised that most households, no matter what their income, face very similar dilemmas when it comes to money.
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