Issue 77 / October 2021 r weapon
looking for bargains among the stocks that led the market on the way up .
For example , the tech stocks that drove the bull run of the late 1990s would have been a poor investment from the point the market bottomed out in 2003 . It is a similar story with the banks following the financial crisis in 2008 .
dex 2000 – 2009
ion Technology ( -56.92 %)
“ You may not catch the absolute bottom , but you will smooth out your book cost . If compound interest is the eighth wonder of the world , then pound-cost averaging is surely the ninth .” These claims about the benefits of drip-feeding are backed up by data . A study conducted by Fidelity last year found that someone who drip-fed money into the FTSE All Share over 30 years would have done better than someone who saved their money and waited for the market to bottom out after a crash – timing their entrance perfectly – before investing .
an05 |
Jan06 |
Jan07 |
Jan08 |
Jan09 |
Too good to miss But if you do find yourself in possession of a lump sum after a major sell-off , there are a couple of indicators that suggest it may be wise to increase your risk exposure sooner rather than later . Nick Edwards , manager of the Guinness European Equity Income fund , says a heavy period of forced selling characterised the market lows of 2008 and 2020 , with prices of quality cyclicals and watch-list favourites driven down by collateral |
Analytics
/ 15 /