Hi Everyone,
I hope this is the right place for this kind of thread, I'm not a complete beginner but I'm certainly no investment expert and am in the fortunate position to have a lump of cash available to invest right now.
I have $100k that I would like to invest, all going well for at least 10 years, maybe longer. I already have about $100k invested in ETFs (Gold (BAR) / whole world (VWRD) / Gov Bonds (IGLO) - ratio is approx 20/50/30). I also trade the occasional individual stock now and again but not actively (maybe holding 1 or 2).
I'd like to put the $100k into an Index/ETF but I can't help thinking that the market is just incredibly overvalued right now and really feels like a bubble getting ready to burst. I know that timing the market is a mug's game but at the same time I really don't want to buy in at what seems like the peak (normally I think I would have just put it all into VWRD).
I could keep it as cash for now and wait and see but I'm also concerned about inflation (part of the reason that I have %20 in a Gold ETF - I sold some of the VWRD I was holding recently to get some BAR as I mentioned above).
I would be really interested in any opinions and ideas, I have considered just buying property also but it's not a great option for me right now (currently expat).
Thanks!
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$100k to invest in 2021 - market timing & inflation.
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- Lemon Quarter
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Re: $100k to invest in 2021 - market timing & inflation.
I'd like to put the $100k into an Index/ETF but I can't help thinking that the market is just incredibly overvalued right now and really feels like a bubble getting ready to burst
This is priced in US$, but the relativity would be the same. World exc. US (VEU) and UK (which normally reflects World exc. US, but where Brexit has further knocked it back) have been relatively poor performers (chart is log scaled, inflation adjusted total returns).
Link here.
Covid etc has seen the flight to safety, so US$, US stocks, US bonds up. As/when that fear subsides there may be a outflow towards 'better valued' ... US$ down (gold up in US$) US stocks flat/down, world/UK up (gold down in £'s). But if inflation does rage and negative real yields widen so gold could do well.
There's a distinct feel that in the US many see recent great gains as potentially faltering, and depression in the UK that the FT100 has performed so poorly for so long. Anyone's guess however if/when that might 'mean revert'. US PE is up above 30, UK's is halve that. So 3% vs 6% earnings yields type differences.
50/50 VUKE/Gold maybe ???
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- Lemon Slice
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Re: $100k to invest in 2021 - market timing & inflation.
Over many years, I have proved beyond doubt that my skills in timing the market are less than zero. Some may be lucky, a very few really do have that skill.
There's a saying..... it's not timing the market, it's time in the market. So if you are looking at 10 years or more, just go for it now. You might win big, you might not win as much as you might have done with better timing. but you probably won't lose.
If you don't feel comfortable with just jumping in now, try 50% now and 50% in premium bonds, then invest the PB 50% in a year's time. Or 2 years. Or 30% in each of the next 3 years.
Whatever you do, don't look back and think "if only....."
doolally
There's a saying..... it's not timing the market, it's time in the market. So if you are looking at 10 years or more, just go for it now. You might win big, you might not win as much as you might have done with better timing. but you probably won't lose.
If you don't feel comfortable with just jumping in now, try 50% now and 50% in premium bonds, then invest the PB 50% in a year's time. Or 2 years. Or 30% in each of the next 3 years.
Whatever you do, don't look back and think "if only....."
doolally
Re: $100k to invest in 2021 - market timing & inflation.
I´m looking to do pretty much the same but over a 20-year horizon and am going 50% MSCI World (including USA), 20% global small cap, 10% Inflation-Linked Gilts, 10% Gold, and 10% All Gilts ETF. UK investors normally need a higher equity component than US investors. 10 years is a pretty short period - a lot of bad things can happen so I would be inclined to play safer with 50-60% equities and the remainder evenly split gold/index-linked gilts/conventional gilts.
Re: $100k to invest in 2021 - market timing & inflation.
Thanks all very much for your thoughts, it's very helpful to have other perspectives.
Following on from some of your ideas, I think perhaps the root of my problem/concern is too much US exposure (both in currency and stocks) so as suggested I will add a non-US ETF - VWCG looks like it fits the bill for now (Developed Europe inc. UK), I have to decide whether or not to beef up my gold holding and I'll keep some cash for now (I know I shouldn't try to guess the peak but I really can't help it, I don't mind buying before the bottom but I really hate to buy at the peak).
Following on from some of your ideas, I think perhaps the root of my problem/concern is too much US exposure (both in currency and stocks) so as suggested I will add a non-US ETF - VWCG looks like it fits the bill for now (Developed Europe inc. UK), I have to decide whether or not to beef up my gold holding and I'll keep some cash for now (I know I shouldn't try to guess the peak but I really can't help it, I don't mind buying before the bottom but I really hate to buy at the peak).
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- Lemon Quarter
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Re: $100k to invest in 2021 - market timing & inflation.
foolulike wrote:Thanks all very much for your thoughts, it's very helpful to have other perspectives.
Following on from some of your ideas, I think perhaps the root of my problem/concern is too much US exposure (both in currency and stocks) so as suggested I will add a non-US ETF - VWCG looks like it fits the bill for now (Developed Europe inc. UK), I have to decide whether or not to beef up my gold holding and I'll keep some cash for now (I know I shouldn't try to guess the peak but I really can't help it, I don't mind buying before the bottom but I really hate to buy at the peak).
and
I'd like to put the $100k into an Index/ETF but I can't help thinking that the market is just incredibly overvalued right now and really feels like a bubble getting ready to burst. I know that timing the market is a mug's game but at the same time I really don't want to buy in at what seems like the peak (normally I think I would have just put it all into VWRD).
Hey foolulike
I like the idea of a global tracker. $100k in say VWRL etf would be my thought, it's a suggestion I make to any family, friends and colleagues interested enough to ask but not inclined to peer over the stock market or try and be clever. They mostly think the stock markets, even a tracker isn't for them and yet pay money to pensions providers, still.
Is your worry too much US? or inflation that's most worrying just now? Or if this is the top of the market is the fear or a crash the worry? If it's all incredibly over valued right now should you be thinking about selling to come back later at better value?
Would dripping $100k in over several years buying quarterly sums make you feel better about not buying at the top and being able to go all in after a correction?
Re: $100k to invest in 2021 - market timing & inflation.
I like the idea of a global tracker. $100k in say VWRL etf would be my thought, it's a suggestion I make to any family, friends and colleagues interested enough to ask but not inclined to peer over the stock market or try and be clever.
I have a fair whack in VWRD, which I think has the same allocation as VWRL, my worry is that it's too skewed to the US (%58 US allocation). I've just added some VWGC to compensate.
Is your worry too much US? or inflation that's most worrying just now? Or if this is the top of the market is the fear or a crash the worry? If it's all incredibly over valued right now should you be thinking about selling to come back later at better value?
All 3 (too much US, inflation, market peak) are a worry right now. I have considered just putting everything in cash and waiting for a while but inflation becomes more of a worry then (and FOMO of course
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- Lemon Slice
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Re: $100k to invest in 2021 - market timing & inflation.
foolulike wrote:I have a fair whack in VWRD, which I think has the same allocation as VWRL, my worry is that it's too skewed to the US (%58 US allocation). I've just added some VWGC to compensate.
Vocal works gospel choir?
I'm guessing a typo, or has Google let me down?
Back OT, I too worry about the US mega-cap weighting in 'global' trackers, though I accept these are good companies and not a bad place for my money. I just feel a global tracker should somehow not be so concentrated. Personally, I've diluted with Europe, UK and EM. First two have worked out quite well, not so much for EM.
Re: $100k to invest in 2021 - market timing & inflation.
NotSure wrote:Vocal works gospel choir?
Sorry, VWCG: Vanguard FTSE Developed Europe UCITS ETF USD Acc
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