Reasons to be Cheerful

[Granny Danger]

8 hours ago, MixuFixit said:

Finally reached a savings target and can now start overpaying the mortgage

I'm basically Will Ferrell from Old School these days

 

Wouldn’t overpay a mortgage at this time.  Better options available.

[Granny Danger]

3 minutes ago, MixuFixit said:

Like what?

The markets will bounce back over the next year.  Put money in a stocks and shares ISA.

[Bairnardo]

44 minutes ago, Granny Danger said:

Wouldn’t overpay a mortgage at this time.  Better options available.

 

8 minutes ago, MixuFixit said:

Like what?

Agree with Danger here. My Mortgage adviser advised me against it for a spell a couple of years back as interest rates are so low that you are effectively costing yourself money by not putting it somewhere that generates more interest than you are paying. 

Basically, a mortgage is very cheap debt atm. Overpay it when it becomes expensive debt. 

[NJ2]

Like what?

Hookers n ching.
50 fuckin minutes, P&b

[Granny Danger]

31 minutes ago, MixuFixit said:

Na. Say I'd put the cash into a 60:40 equity:bonds type fund for the last 3 years and wanted to pay off a chunk, but everything has been hammered by 5-15% (as about 3/4 of my ISA picks have), I'd be goosed. And even if COVID didn't happen and I'd stuck the lot into something very bond heavy that yields 3-4% vs a mortgage on about 2%, and then paid it off and pocketed the difference say every 3 years, it's going to be a few hundred quid extra, tops. I'd rather just add an overpayment and not even think about it.

My SIPP is sitting at 6.7% annualised return now.  6.7% in the midst of a global pandemic.  Strip out inflation and that’s 4.8%.  

[Granny Danger]

2 minutes ago, MixuFixit said:

annualised over how many years? I'm imagining your YTD isn't looking so rosey.

Only 5 years since I started managing my own pension.

Individual years are not important.

[Sergeant Wilson]

2 hours ago, Granny Danger said:

The markets will bounce back over the next year.  Put money in a stocks and shares ISA.

I thought his name was Mixu.

[HeartsOfficialMoaner]

So happiness is money after all.

 

[Zen Archer (Raconteur)]

I'm so glad my insomnia is cured.

[JamieT1314]

It would be a brave man who would invest in the current markets rather than over pay their mortgage at present, yeah you might get an extra % here or there but is it worth the risk?

 

Only the individual can answer that.

You just told me to speculate on stocks recovering in a year

 

[hk blues]

On 06/05/2020 at 03:32, Granny Danger said:

Only 5 years since I started managing my own pension.

Individual years are not important.

They are if/when they wipe out any previous years' returns

[Granny Danger]

2 hours ago, hk blues said:

They are if/when they wipe out any previous years' returns

Anyone who thinks in terms of single years should avoid investing in shares and/or funds. Such investment always has to be undertaken in the basis of a longer timescale.

 

[Bairnardo]

Anyone who thinks in terms of single years should avoid investing in shares and/or funds. Such investment always has to be undertaken in the basis of a longer timescale.
 

This is kind of what the pensions advisor I seen told me.

Point A is now, point B is 30 years from now. Point B will always be forecast to be higher, but in between the line will saw tooth like f**k.

The less time you have between the points, the more exposed to individual drops (and rises) you are.

I should add for Mixus clarity that the cheap debt thing is the theory behind it.

My personal reality is that I always target the mortgage, because I have a personal phobia of debt.

[hk blues]

43 minutes ago, Granny Danger said:

Anyone who thinks in terms of single years should avoid investing in shares and/or funds. Such investment always has to be undertaken in the basis of a longer timescale.

 

Yes.  But, my point still stands, one year in isolation can wipe out several years of good returns.  

[Granny Danger]

2 hours ago, Bairnardo said:

This is kind of what the pensions advisor I seen told me.

Point A is now, point B is 30 years from now. Point B will always be forecast to be higher, but in between the line will saw tooth like f**k.

The less time you have between the points, the more exposed to individual drops (and rises) you are.

I should add for Mixus clarity that the cheap debt thing is the theory behind it.

My personal reality is that I always target the mortgage, because I have a personal phobia of debt.

Investing is always a judgement call but the best approach is to look at past experience.  A quick check of the FTSE or Dow will show that over an elongated period (20 - 30 years) the market will always perform positively.  Even accounting for slumps, recessions and ‘black swan’ events.

I reckon anyone investing now is going in at the bottom end of the market with the worst hits already having been experienced.

Though anyone who isn’t comfortable should certainly avoid it at the moment.

[hk blues]

1 hour ago, Granny Danger said:

Investing is always a judgement call but the best approach is to look at past experience.  A quick check of the FTSE or Dow will show that over an elongated period (20 - 30 years) the market will always perform positively.  Even accounting for slumps, recessions and ‘black swan’ events.

I reckon anyone investing now is going in at the bottom end of the market with the worst hits already having been experienced.

Though anyone who isn’t comfortable should certainly avoid it at the moment.

I don't disagree with you, but we can apply the same analysis to house prices over time.  The problem is we don't always have the luxury of choosing when to jump on and off the bus and can get caught out.  

[Granny Danger]

9 minutes ago, hk blues said:

I don't disagree with you, but we can apply the same analysis to house prices over time.  The problem is we don't always have the luxury of choosing when to jump on and off the bus and can get caught out.  

No we don’t.  Anyone who cannot commit to long-term investing, whether through a SIPP, ISA, or some other vehicle, should probably avoid it.  But many folk will have some for of retirement plan which, by definition, is going to be a lengthy one.

On that basis any 20-30 year period will show positive results.  Take this excerpt to illustrate this:

The most recent 20-year span, from 2000 to 2020, not only included three bull markets and two bear markets, but it also experienced a couple of major black swans with the terrorist attacks in 2001 and the financial crisis in 2008. There were also a couple of outbreaks of war on top of widespread geopolitical strife, yet the S&P 500 still managed to generate a return of 8.2% with reinvested dividends. Adjusted for inflation, the return was 5.9%, which would have grown a $10,000 investment into $31,200.

 

Taking a different 20-year span that also included three bull markets but only one bear market, the outcome is far different. In the period from 1987 to 2006, the market suffered a steep crash in October 1987, followed by another severe crash in 2000, but it still managed to return an average of 11.3% with dividends reinvested, which is an 8.5% inflation-adjusted return. Adjusting for inflation, $10,000 invested in January 1987 would have grown to $51,000.

[throbber]

Getting a five guys tonight.

[Blootoon87]

Getting a five guys tonight.

£15 a burger? No thanks.

[Melanius Mullarkey]

32 minutes ago, throbber said:

Getting a five guys tonight.