Is it a good time to invest in ETF index funds?

[bondog]

Hi all

looking to invest some of my super In vanguard vas and vgs and was wondering if it’s a good time now to invest?

 

[greggles]

Hi all

looking to invest some of my super In vanguard vas and vgs and was wondering if it’s a good time now to invest?

Nobody knows what the market will do tomorrow, next week, a month from now or next year. It could be the best investment decision you've ever made, or the worst. Anything anyone here tells you would be a guess.

Sorry I can't be of more help, but that's the most truthful answer I can give. I've been wrong about the market more times than I care to count.

 

[frugal.rock]

Hi all

looking to invest some of my super In vanguard vas and vgs and was wondering if it’s a good time now to invest?

The best time to invest is when you feel you are ready and understand the potential implications of your investment.
Investing Super should be done in a cautious and informed manner.

There are pros and cons to investing "now" however with Super, I really suggest you speak to an accountant and understand we can't advise you here, only give opinions.

 

[bondog]

Nobody knows what the market will do tomorrow, next week, a month from now or next year. It could be the best investment decision you've ever made, or the worst. Anything anyone here tells you would be a guess.

Sorry I can't be of more help, but that's the most truthful answer I can give. I've been wrong about the market more times than I care to count.

Thanks you, I think I’ll just sit on the sidelines and watch it for a week or two with this omicron around who knows what’s going to happen’

 

[So_Cynical]

In general considering a long time line, indexes were cheaper 3 months ago, 12 months ago and 2 years ago, PE ratios are crazy high now, correction territory high. Is it a good time to invest in index funds? a better question is - will there be a better time to invest in index funds over the next 2 years?

​

 

[bondog]

In general considering a long time line, indexes were cheaper 3 months ago, 12 months ago and 2 years ago, PE ratios are crazy high now, correction territory high. Is it a good time to invest in index funds? a better question is - will there be a better time to invest in index funds over the next 2 years?

​

Mmm yes I’m a newbie so I get that stock goes up and down and currently it’s really up so maybe I just keep my investment in cash for now.
I have had it cash since covid started and I’m not making anything on it so just looking for somewhere reasonably safe to invest in!

 

[So_Cynical]

I have had it cash since covid started and I’m not making anything on it so just looking for somewhere reasonably safe to invest in!

You have missed a big leg up over the last 2 years being 100% cash, the stock market isn't for everyone, many experts and punters like me played covid all wrong or at least didn't make as much as we should have. Can i ask if you were temped to enter the market back in mid 2020 when the indexes were cheap?

 

[bondog]

You have missed a big leg up over the last 2 years being 100% cash, the stock market isn't for everyone, many experts and punters like me played covid all wrong or at least didn't make as much as we should have. Can i ask if you were temped to enter the market back in mid 2020 when the indexes were cheap?

Look mistakenly took it out when covid started as I got spooked and lost a bit then.
I was then planning to buy commercial property and now it’s gone up too much!
So I have only started checking out the stock market.

 

[So_Cynical]

Look mistakenly took it out when covid started as I got spooked and lost a bit then.

I did some spooky selling early covid as well as i needed money for a real estate purchase and i knew some cheap stocks were going to be coming along and decided it was a good year to have a tax loss, anyway if real estate is your thing the listed REIT's are trading at reasonably low PE's at the moment, the REIT index ETF's are yielding 4 to 5% a little more conservative compared to the broader market indexes.

 

[bondog]

I did some spooky selling early covid as well as i needed money for a real estate purchase and i knew some cheap stocks were going to be coming along and decided it was a good year to have a tax loss, anyway if real estate is your thing the listed REIT's are trading at reasonably low PE's at the moment, the REIT index ETF's are yielding 4 to 5% a little more conservative compared to the broader market indexes.

Cheers for the info, real estate is generally my thing but I would like to diversify some of my investments into other classes also.
I just need to learn more about the stock market!

 

[Smurf1976]

a better question is - will there be a better time to invest in index funds over the next 2 years?

That's the key question as I see it.

Is there likely to be a better time than right now?

In my opinion we're overdue for a decent correction which would provide a better entry point BUT that's not a guarantee we'll actually get one soon.

 

[aus_trader]

I've got some exposure to the market, so happy to see it bubbling along.

But as others have said already, just don't know what could cause the everything bubble to wobble. Thought Evergrande was going to shake things up a bit, but looks like punters are at harder than ever before when it comes to Estate, Stocks, Bonds and all other everything bubble that nothing seems to fade the feeding frenzy...?

 

[bondog]

That's the key question as I see it.

Is there likely to be a better time than right now?

In my opinion we're overdue for a decent correction which would provide a better entry point BUT that's not a guarantee we'll actually get one soon.

I've got some exposure to the market, so happy to see it bubbling along.

But as others have said already, just don't know what could cause the everything bubble to wobble. Thought Evergrande was going to shake things up a bit, but looks like punters are at harder than ever before when it comes to Estate, Stocks, Bonds and all other everything bubble that nothing seems to fade the feeding frenzy...?

I guess with these index funds your covered as it’s spread so far over multiples so it would take a big issue for it to turn them all….look at how it reacted to covid! Down then up up up.

 

[sptrawler]

I guess with these index funds your covered as it’s spread so far over multiples so it would take a big issue for it to turn them all….look at how it reacted to covid! Down then up up up.

If you look back at the GFC, it took the all ords 10 years to get back to where it was prior to the GFC, so using the current rebound as a yardstick just highlights the saying, dont use historical performance as a guide to future performance.
History shows you have to play the long game IMO.

 

[Smurf1976]

I guess with these index funds your covered as it’s spread so far over multiples so it would take a big issue for it to turn them all….look at how it reacted to covid! Down then up up up.

It's really just a question of whether there's an opportunity to do better than buying right now?

Suppose for example that someone had invested $100,000 into VAS at the opening price on 20 February 2020, the high point before the crash.

Excluding brokerage costs for simplicity, they'd have bought 1099 shares.

Now suppose that they had bought near the bottom of the crash, buying at the open on 24 March 2020. The same $100,000 would have bought 1699 shares.

The difference?

$100k on 20 February 2020 would today be worth $106,295.28 with distributions during 2021 of $2559.57

$100k invested on 24 March 2020 would today be worth $164,327.28 with distributions during 2021 of $3956.97

What that shows is yes those who invested at the worst possible time but held on have still made a profit but if they'd known that there was a crash about to happen and had waited then invested near the bottom they'd have made a far larger profit.

That's an historic example only and is not a recommendation etc. Price and distribution data sourced from CommSec.

 

[Logique2]

Hi all

looking to invest some of my super In vanguard vas and vgs and was wondering if it’s a good time now to invest?

How much ; for how long ; what type? There are so many different ETFs.
Just be clear in your own mind on what you want to achieve, and especially how patient you're prepared to be.
ETFs for retail investors -have many fans amongst the professionals.

 

[divs4ever]

welcome to ASF ,

my fellow members , have probably said what i was thinking better

now let's assume you have your sight set on VAS and VGS

first off let's discuss DRP ( Dividend Reinvestment Plan ..DRiP in the US )

Dividend Reinvestment Plan (DRIP)​

Dividend Reinvestment Plans (DRIPs): Compound Your Earnings

A dividend reinvestment plan (DRIP) is an arrangement that allows shareholders to automatically reinvest a stock's cash dividends into additional or fractional shares of the underlying company.

www.investopedia.com

What is a Dividend Reinvestment Plan?​

Dividend.com

The easiest way to reinvest your dividend, explained.

www.dividend.com

and

THE MAGIC OF COMPOUNDING​

The Magic of Compounding

Simple Interest and Compound Interest. Remember these terms from your maths lessons? Well if your eyes want to glaze over at the mention of the word ‘Maths’ I urge you to stay focused. This lesson may change your life! The Magic Of Compounding Let’s refresh your knowledge of these...

thewealthygraduate.com

in your case accumulating extra ETF units

now both VAS and VGS both pay quarterly ( 3 monthly ) and both have an optional DRP

now IF you choose this strategy you might want to buy your ETFs at least two week BEFORE the next ex-div. date so the paper-work is in place ( VAS and VGS have recently gone ex-div so you have nearly 10 weeks to try for a 'nice price ' before the next dividend cycle )

now i am a 'lurker ' ( will wait up to 3 years for a target price ) but that strategy doesn't appear to suit your aims , collecting as many divs as you can , will probably make you happier

ALL investing carries risk ( even cash sitting in the bank term deposit )

also VAS will pay you franking credits ( reduce your tax a little bit , don't forget to claim them ) VGS doesn't appear to pay franking credits

good luck

 

[So_Cynical]

just don't know what could cause the everything bubble to wobble.

Perhaps the appropriate ending of the everything bubble is anything and everything, i really dont think its gona take much, have been some big losses in some crypto based assets lately, talking 60 to 90%.

 

[bondog]

It's really just a question of whether there's an opportunity to do better than buying right now?

Suppose for example that someone had invested $100,000 into VAS at the opening price on 20 February 2020, the high point before the crash.

Excluding brokerage costs for simplicity, they'd have bought 1099 shares.

Now suppose that they had bought near the bottom of the crash, buying at the open on 24 March 2020. The same $100,000 would have bought 1699 shares.

The difference?

$100k on 20 February 2020 would today be worth $106,295.28 with distributions during 2021 of $2559.57

$100k invested on 24 March 2020 would today be worth $164,327.28 with distributions during 2021 of $3956.97

What that shows is yes those who invested at the worst possible time but held on have still made a profit but if they'd known that there was a crash about to happen and had waited then invested near the bottom they'd have made a far larger profit.

That's an historic example only and is not a recommendation etc. Price and distribution data sourced from CommSec.

There you go then, thanks for that!
Shows how much it’s gone up and is this bull run sustainable long term? Who knows ?

 

[Belli]

Hi all

looking to invest some of my super In vanguard vas and vgs and was wondering if it’s a good time now to invest?

If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks.

Ask yourself: Am I an investor, or am I a speculator? An investor is a person who owns business and holds it forever and enjoys the returns that U.S. businesses, and to some extent global businesses, have earned since the beginning of time. Speculation is betting on price. Speculation has no place in the portfolio or the kit of the typical investor.

Two Bogel quotes.

Now decide if the first issue worries you. If not then it shouldn't matter when you place the funds because the underlying theme is it's always a good time to invest in shares.

In regard to the second quote, decide who you are. The concept of the second quote is to keep investing no matter what and allow compounding to do its work for you.

I don't consider investing itself is difficult although some give the impression it is. The hard part for me has always been the temptation to do something. After I've resisted and done nothing, I give a sigh of relief I didn't do a stupid thing.