Question
Is there a site where you can get buy or sell advice for funds like you can with shares, a lot of the suggested funds already seem to be at a peak and I wonder if this is the best time to buy.Answer
There are some sites that publish decent fund research, for example Bestinvest and Citywire, but they’re more focussed on the capabilities of underlying fund managers than market timing.
Interactive Investor has a vibrant community of investors swapping tips and while orientated towards shares, there are conversations about funds too that might be more what you’re looking for.
However, funds are generally more representative of the wider market than shares in individual companies. For example, let’s suppose company X announces a big drop in sales and its share price plummets by 10%. If you own the share you’ve just lost 10% on paper. If it’s held in a fund you own that also invests in 49 other companies in equal proportions the fund would fall just 0.2%. And if we assume the company is small and other share prices flat the main stock market index will barely move at all.
So funds are arguably less relevant re: hot tips for short term gains and more a bet on markets in general (obviously most funds focus on specific markets) and, if actively managed, the manager running the fund.
Is now a good to buy in general? I’ve been quite pessimistic about stock markets in general for a couple of years now and they’ve generally risen, so maybe I’m not the best person to ask! My concern is that prices have been more pushed up by Central Banks around the world pumping a fortune into markets than improved economic fortunes and I’m not convinced this is sustainable. Also, with interest rates so low some investors have been tempted into stock markets in the hope of getting a worthwhile return, again helping to support prices in an otherwise difficult climate.
I wouldn’t necessarily avoid investing altogether if you’re prepared to sit tight for 5-10 years, but maybe now is not the time to be placing any big bets unless you’re feeling very brave.
Is there a site where you can get buy or sell advice for funds like you can with shares, a lot of the suggested funds already seem to be at a peak and I wonder if this is the best time to buy.Answer
There are some sites that publish decent fund research, for example Bestinvest and Citywire, but they’re more focussed on the capabilities of underlying fund managers than market timing.
Interactive Investor has a vibrant community of investors swapping tips and while orientated towards shares, there are conversations about funds too that might be more what you’re looking for.
However, funds are generally more representative of the wider market than shares in individual companies. For example, let’s suppose company X announces a big drop in sales and its share price plummets by 10%. If you own the share you’ve just lost 10% on paper. If it’s held in a fund you own that also invests in 49 other companies in equal proportions the fund would fall just 0.2%. And if we assume the company is small and other share prices flat the main stock market index will barely move at all.
So funds are arguably less relevant re: hot tips for short term gains and more a bet on markets in general (obviously most funds focus on specific markets) and, if actively managed, the manager running the fund.
Is now a good to buy in general? I’ve been quite pessimistic about stock markets in general for a couple of years now and they’ve generally risen, so maybe I’m not the best person to ask! My concern is that prices have been more pushed up by Central Banks around the world pumping a fortune into markets than improved economic fortunes and I’m not convinced this is sustainable. Also, with interest rates so low some investors have been tempted into stock markets in the hope of getting a worthwhile return, again helping to support prices in an otherwise difficult climate.
I wouldn’t necessarily avoid investing altogether if you’re prepared to sit tight for 5-10 years, but maybe now is not the time to be placing any big bets unless you’re feeling very brave.
Read this Q and A at http://www.candidmoney.com/askjustin/836/is-now-a-good-time-to-invest-in-funds
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