Basic Dumb Question...

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principia

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Guys, a first post so sorry if this isn't in the right place. I was looking over old threads going back a couple of years here, and some posters here had anticipated the credit crunch. So it looks like a place to ask a straight-forward question.
I had cash to invest when the FTSE AllShare was around 2200. There was a lot of uncertainty but I took the view, the market will go up eventually, I could afford to wait. Anyway, I'm 20% up faster than expected, and that represents a tidy sum.
I now have another lump of cash I could put in.
We have hit a couple of annual highs this last week or so. I have three choices:
- dont wait for any reverse and put in the second lot of cash in right now
- hold back on the second lot for the next dip
- profit take now and put it all back in plus the extra cash on the next dip
It comes down to whether the consensus is that we will have another downward dip/correction shortly, or whether the time to invest is always now.
Any comments welcomed. Thanks guys.
 
Your current situation is that you're still learning to trade. You're asking such questions that suggest that to me. This being the case, I wouldn't risk any money at all. The problem is that you've been lucky. It could have fallen further (many argue that something really bad is gonna happen). You could be sitting in loss for years and then for whatever reason (to buy a house or get married or have a child or a death in the family) you need the money so you close the position for a loss. We're traders, not investors (I use the term loosely, as most "investors" call themselves that to make them sound clever whereas in reality they're just buying and hoping like a clueless gambler), so take your profit and learn to trade. Otherwise, you won't be able to make decent money for another 20 years. The alternative is to mortgage your house, sell all your possessions, drum up around £250k to £500k in loans, "invest" in a number of blue chips, cash out in 10 years' time. Do it again in 20 years and you should have a nice business.

PS never take tips to open or close a trade from anyone.
 
If I were in your shoes I like to believe that I'd rag out the initial deposit, bank half the profit, split the other half profit in quarters, leave one half running and wait for a opportunity to whack the other quarter in when I felt confident.
 
shadowninja said:
Your current situation is that you're still learning to trade. You're asking such questions that suggest that to me. This being the case, I wouldn't risk any money at all. The problem is that you've been lucky. It could have fallen further (many argue that something really bad is gonna happen). You could be sitting in loss for years and then for whatever reason (to buy a house or get married or have a child or a death in the family) you need the money so you close the position for a loss. We're traders, not investors (I use the term loosely, as most "investors" call themselves that to make them sound clever whereas in reality they're just buying and hoping like a clueless gambler), so take your profit and learn to trade. Otherwise, you won't be able to make decent money for another 20 years. The alternative is to mortgage your house, sell all your possessions, drum up around £250k to £500k in loans, "invest" in a number of blue chips, cash out in 10 years' time. Do it again in 20 years and you should have a nice business.

PS never take tips to open or close a trade from anyone.
Click to expand...

Appreciate the feedback. Yes, I am investing not trading. But to reassure, I have other investments, so I accept I could be sitting on a loss.

Yes I got lucky with 20% return, but so did anyone else who saw this summer as a buy opportunity.

I guess I'm interested to hear if there is any consensus here as to whether there will be a major correction within, say, the next 3 months.
 
I want to find a thread of an individual share, BG. tried the search and just brings up this board. Without having to trawl through umpteen pages manually can anyone tell me if there "is" a thread for BG or not please?
 
Burnley said:
I want to find a thread of an individual share, BG. tried the search and just brings up this board. Without having to trawl through umpteen pages manually can anyone tell me if there "is" a thread for BG or not please?
Click to expand...
No Burnley, there isn't. Threads devoted to individual equities are quite rare as they tend to be of interest to relatively few people. However, if there was one, I'd imagine any commentary would be along the lines of: 'It's (temporarily) overbought, price has hit / bounced off a resistance level at 1,180, the chart is in sideways drift mode and, with the exception of the last week to ten days, it doesn't mirror the bullishness of the main market indices. Unless you've a penchant for rangebound choppy markets, it's one to steer clear of - at least on purely TA grounds.' That kind of thing.
Tim.
 
Thanks for the reply timsk, I think that is why I don't use T2W that often i.e. not enough info on individual stocks.
 
Burnley said:
I want to find a thread of an individual share, BG. tried the search and just brings up this board. Without having to trawl through umpteen pages manually can anyone tell me if there "is" a thread for BG or not please?
Click to expand...
No. Why don't you start one. Or would that require you to put some effort into it rather than extract others'
for free?

Really pisses me off when bods start complaining there isn't the very precise thing they're looking for when they've contributed nothing themselves.
 
Thanks timsk, yes I've tried all the other mainstream sites including Hemscott. Thanks once again anyway.





.. I'll ignore the rather arrogant and abusive rant in post 10.
 
Burnley said:
Thanks timsk, yes I've tried all the other mainstream sites including Hemscott. Thanks once again anyway.
Click to expand...
My pleasure.
Burnley said:
.. I'll ignore the rather arrogant and abusive rant in post 10.
Click to expand...
That's not an abusive rant from Tony (TheBramble). If you get a tongue lashing from him, you won't be able to walk for a week. Trust me on this, I know! He does have a very positive side and if, as has been suggested, you start a thread on BG (or just stocks in your watchlist that interest you) - you might well be blown away by the quality of his comments. He's not all bad; it's well worth the risk, IMO . . .
;)
Tim.
 
And back to the original thread......

The markets will correct at some point. But when and where is a matter of interpretation. I have historic congestion areas marked on my chart at around 5300 to 5500 for the FTSE100. I figure there will be stiff resistance at these levels and that could well trigger the correction everyone is waiting for.

So my strategy is to scale down my long positions as we reach 5300 and look to buy any dips. I wouldn't be buying aggressively at the moment, as we are very close to some key resistance.

As for the what to do, I would second the advice above and plan to take some profit as we get higher. There is nothing worse for your psyche than watching profit disappear. Much better to bank some of it and then let the rest run, that way, whatever the market does you will not be too worried.
 
PokerBrat said:
And back to the original thread......

The markets will correct at some point. But when and where is a matter of interpretation. I have historic congestion areas marked on my chart at around 5300 to 5500 for the FTSE100. I figure there will be stiff resistance at these levels and that could well trigger the correction everyone is waiting for.

So my strategy is to scale down my long positions as we reach 5300 and look to buy any dips. I wouldn't be buying aggressively at the moment, as we are very close to some key resistance.

As for the what to do, I would second the advice above and plan to take some profit as we get higher. There is nothing worse for your psyche than watching profit disappear. Much better to bank some of it and then let the rest run, that way, whatever the market does you will not be too worried.
Click to expand...

Really useful and constructive suggestion. I appreciate it. Thank you.

This fits with some analysis I read last week which took the view that the FTSE may correct significantly based on historical trends which show that over the last 3 decades every time the index moves more than 25% above the 200 day moving average there is a correction of 600-900 points. The FTSE is already over 20% over the 200 day moving average, and a correction would be expected before 5,500 is reached. This is a view with which you seem to concur.
 
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