Dead wrong. Your net worth plummets if your portfolio plummets. The YOLO clowns re Wall Street bets who bet big, gained $MILLIONS, REFUSED to sell, and lost IT ALL playing with short term options, for example -- show the exact OPPOSITE of what you claim is true. People don't like to face up to losses (loss aversion). That doesn't MAKE the losses any less REAL.
Another way of looking at it is that it’s a loss the moment you buy - the money has left your bank account after all. It only becomes a gain when you sell at a profit. In truth, with a liquid investment, the value at any moment is the quoted price.
Not forgetting the benefit of timing the selling of a loss to minimise any capital gains you might have incurred in other investments, especially in a GIA.
Biggest lesson i've learnt in 2024 in the stock market is that nobody knows what is going to happen next, so practice some humility and follow a strategy with a long term edge.
Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.
Uncertainty... it took me 5 years to stop trying to predict what bout to happen in market based on charts studying, cause you never know. not having an advisor guide me cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.
Sharon Ann Meny is the licensed advisor I use. Just search the name. You’d find her webpage and necessary details to work with to set up an appointment.
Great video, I've been interested in investing ever since I came across articles of people making up to $150,000 and more in this period, thanks for the video but is it really possible for a retail investor to achieve this in months?
I've purchased numerous stocks in individual firms. Because there are so many stocks that will skyrocket in the long run, it is currently safe to buy in on ETF and ride it out. Due to fud, I sold out early, but then retraced my ways and re-invested $350,000 with a financial advisor who manages my account. I received an 82% return last year and will see where it goes this year.
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
This video should be compulsory viewing for every investor! Amazing clarity and for some lucky people starting their investment journey this video could literally be worth millions!
I had never even heard of lululemon. It looks to be a fad company like Superdry. FedEx have been around for decades. If their sales drop 2% a year for the next decade they will still be a big company.
You did an amazing job at being data driven on explaining some critical points that are counterintuitive to investing !! Big thanks for putting the video together and being so data driven in your narration
Great video James thanks for posting. I’m fortunate enough to work for a company that matches shares that I buy, so long as I hold them for a year. So I buy what I can, the company then doubles my allocation and I immediately sell up and invest it all in a global index fund. It’s beautiful! Problem is I know some colleagues who have just kept the company shares for years, and they’re not growing anywhere near as much as index funds, crazy… Take the match then get out!
Yes, if you have a company with meh performance, that sounds just right, given the risks of holding ONE stock compared to a broad index. I had a career at IBM and while IBM gave a 15% discount on the stock to employees and the company was growing, I was happy to plow the allowed 10% of my salary into the stock, and sell occasionally when it rose significantly. But once all the cost cutting kicked in and (true to form) they stopped the discount on the stock, I stopped participating RIGHT away. And from then on, their overall growth over time has been poor for a tech stock (which was unsurprising to me).
James is very right, I spent a year actively investing, reading all the books, doing all all the research, spending many hours each week. Now I dollar cost average into index funds for low risk and crypto for high risk, spending minutes a month
It took me a lot of reading, studying, watching and research to realise all this. I really found an interest in finance, pensions and investing and eventually came to the conclusion that to just ‘set & forget’ was ultimately easier and yielded the greatest results! Great video; thankyou!
That’s the journey most people have to go on. Passive investing is counterintuitive which is why most people have to start with active, and ideally don’t end up making too many mistakes before they see the light!
@@JamesShack Yes, exactly. I got my wife to do the right thing despite never taking this journey. She is less than interested but still invests in a global, passive index fund. All down to my assertions I guess but if she has looked at it twice in the last six years, I would be surprised.
@@JamesShack You need a few setbacks to realise it. Mine were playing double or quits on Marconi, then switching to safe and secure Lloyds in 2008 just before the government persuaded them to take on Halifax which I had recognised as a Basket case back in 2003. One argument for keeping such shares is as a reminder of how easy it is to get things wrong.
There is logic to investing constant amounts at constant intervals. In particular, when it’s cheap you buy more and when it’s expensive you buy less. (Buy the dip!) If the asset ends up being flat after a year, you’ll have an overall gain.
hey James I would really appreciate a video on factor investing. this is the way I invest my own money after a lot of research and reading on rational reminder community. have decided to be ok with slightly higher fees and a bit more of work when I invest (spreading my money trough 5 etfs instead of 1 (vwce as I was doing before). but the principle is the same, set an allocation and just stick to it. you are one of my favorite RUclipsr, cheers
OK like many people here I've got some BG funds that have tanked and I'm looking at a 50% loss. So the wisdom is I should sell and re-invest. BUT there are 2 problems. Firstly - I might just end up buying another bad fund - another BG - and face more loss. Secondly - at this time nearly everything seems very frothly / overpriced .... Oh and thirdly... looking at the price graph of my poor BG fund.... it went up from a low price over several years - so what's to stop that happening again in the future and I get back to break-even or better ?
Another great video, James with some key messages - mandatory viewing for all investors. As someone who has been investing for 30+ years in various forms I can attest to all three of these lies and have certainly been guilty of No 2 myself - many times. Crystallising a loss is easy to say, rather more difficult to do. Like most things, having a plan (written down) helps with difficult decisions. There is a good book called the Idle Investor by Edmund Shing that talks to the idea of less is more.
Can you talk about risk please - funds folding, or platforms folding etc? Not the investment risk - the middle man risk especially with a long term investment like saving for retirement or drawdown.
Lie 2 has me confused now - can you confirm you are referring to holding on to individual stocks that aren't particularly strategic, as opposed to say a global index? I fully intend to hold onto my index fund when it is down in the 'hope' that it comes back!
My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless. By doing this, I have managed to grow my portfolio to $500k.
For years, I've resolved to open a brokerage account and invest safely, but I can't make myself do it. It's time to admit I'll never be the thrifty DIY investor millennials are expected to be.
Buy and Hold the magnificent companies DON'T LOOK AT IT DAILY, Hold 5-10 years. These companies, like mutual funds, are diversified and financially strong. Also, work with a fiduciary financial advisor. I've done this for 7 years and reached a million dollars in April.
Sure, 'Melissa Elise Robinson' is the licensed advisor I use. Just research the name. You’d find necessary details on the web to set up an appointment.
What a share!! it was easy to find your adviser. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
Hey James. Really enjoying your content. Can you point me at anything you’ve done relating to a couple of different subjects: 1) what order to draw from different investments in retirement, and 2) impacts of the relatively recent removal of the pensions LTA and any concerns with piling in cash over the previous LTA now? Many thanks!
Hi James, great channel very informative. Quick question, I have 3 personal pensions in the UK one is with Zurich that is actually a money purchase scheme where I either take all of the fund or none of the fund. My intention is to convert the Zurich fund into an International SIPP and commence drawing down on this fund in 3 to 5 years, I am currently 58 years old. Can I take the 25% tax free allowance from all 3 of my pensions or am I allowed only one tax free lump sum no matter how many pension plans I have?
Good video. My own example of lie 2. Bought Cineworld and held it until it went bust, emotion juts did not allow me to sell at a loss. Learn form my mistake!
Hey James, I’ve been a watcher for a while. Great video but there was one scenario you didn’t cover. If you bought those 25 index funds as you said in your example, what if they’re up? Should you still sell and consolidate?
This one has really resonated with me. As a purchaser of several 'popular' things from BG a few years back, most sitting on 30-60% losses! Thankfully that lesson was learnt right at the start of my investing journey, with the bulk still invested in Index funds at the same time, and pretty much just that since. I haven't sold them to crystallize a loss - they might turn good - and if they don't - the awful performance serves as an etching on my brain to think before doing something similar again!
Hi James, Love the videos, you've taught me so much and I'm very grateful! Regards this video - some really interesting, thought provoking points. I might be wrong but I'm sure I've read elsewhere that sometimes its bad to crystalise losses and its wise to keep the 'losers' while selling the 'winners' - I did have a lot of single company shares until I saw your videos and have changed this, but still hold onto VOD and LLOY as they are down so far; very much like your example in the video. I shall be thinking more about what to do now. ------- General point not related to this video, but some of your others: Quite a few of your pension case studies use the guyton klinger guardrails. I've read that these can result in very large reductions in income over time, if historical modelling is done, and a worst case event from the past occurs. I was wondering if you have ever modelled what the variable income would look like? Perhaps an idea for a future video?
Wow, James really knows his stuff and he's great at explaining it to others. Another fantastic video James, always look forward to learning from you. Thanks.
Hi James, very good content. Here's my issue though, I'm 60 and hope to retire in 7 - 10 years. I don't think index fund (s) is going to get me there in that time frame, with an investment of approx. £500/month across SIPP and ISA. My workplace pension/SIPP/ISA etc pots currently are only approx £165K. I need to get to approximately £500K+ in my estimation to invest that in dividend stocks at retirement to live off the dividends or at least supplement my pension pot drawdown/state pension with a greater chunk being dividend income, if possible. What would you suggest?
Another great video James, I'm in the position of holding on to half a dozen actively managed funds in a SIPP that are down. One Ballie Gifford fund is currently over 60% down, I do have another SIPP with one passive index fund that is doing well but often think that I should cut my losses with the actively managed ones.
Brilliant and spot on James, pls can you do more videos on selecting Pension investments, you would imagine big pension companies are good at this but they don’t seem to be. Can anyone explain what is going on with UK 15 gilts, these are at -40% shouldn’t things improve now inflation is allegedly reducing? Is it reasonable to expect things to improve or like you say James do you just look at the current value when deciding what to do.
Agree with much of this - but what about asset allocation. Any diversified portfolio, will, in time, move away from the initial allocation. What alternative is there in this scenario, other than to sell and buy in order to re-balance the allocation? In addition, any well-diversified fund is itself buying and selling all the time - even if it is just tracking an index.
If you want to keep your balance, then of course, over time, you'll have to sell some winners. But you can do so incrementally, and you're not getting out of the market, just toning down the risk of bigger winners. Longer term, that actually enhances performance but it DOES cause some taxable events re realized capital gains. Doing it incrementally (somewhat gradually) like once a year helps such gains not get out of hand.
If you invest in a single allocation fund, that gets done for you. If you have multiple funds, then yes, you may need to rebalance; we typically do that once a year.
@@rl3799 yes, but ideally it will be systematic, as in it’s not trying to be smart guess the best time to buy or sell, it just does it every day/week/year. What ever the system is.
hey James, thanks for this one, its answered a question I've been thinking about lately..... but here's a question for maybe a future video that relates to what you're talking about here.... I have a SIPP with a bunch of investments, but I'm wondering what to do with my savings.... I'm trying to achieve better returns than high street 5%, but I want to keep the cash available for a potential house move in 1-3 years..... At the moment, some is in a stocks ISA (S&P 500) and the rest is in a 5% savings account.... Are there any other options that would perform better?
Totally agree, the financial advice industry wants people to think it's way more complicated than it really is to be a successful investor. Previously I had a company pension with Scottish Widows and was treated to a financial advice live session, where the "financial experts" spent 1 hour making investing sound as complicated as possible and make it seem that you needed expensive actively managed funds. Total rip off.
If all a financial adviser is offering you is to select an investment portfolio, then it's not likely to be worth it. Although saying that, some people, as you’ll see in the comments, do find it very difficult to invest and manage their emotions without a guide.
Fresh trim James! Please can you do a video on RSUs, ESPP and the benefits of opting in with salary sacrifice, and methods people could use to be more tax efficient with it! Also opting into salary sacrifice for Workplace pensions (DC) and saving on NI. Many thanks!
Won't that depend on what a company offers ? Yes Salary Sacrifice is great especially if you are just over the Higher Rate tax threshold. It is almost tempting to lease an EV as well to benefit from it even more.
Novice question - why on earth would you gamble with stocks and shares when you can get a guaranteed interest rate through an ISA? From where I’m sitting, you’re gambling losses for an extra 3-5% - doesn’t make sense to me.
He gives an example in the video where 1.67% difference over 30 years is -£337,393... that should answer your question. The goal is to outrun inflation, not keep up with it. The rates of fixed are typically around/slightly under the rate of inflation (though its not directly corrolated). You need better returns than that for growth. I'm sorry to tell you but you may think your money is growing in a fixed rate isa but your purchasing power is slowly dwindling away.
At the start of the year I decided to be sensible and to simplify the mess of random stocks I'd accumulated. One I sold was a significant holding in ... NVIDIA. About a week later it went ballistic. Oh well. I have to accept that, logically, I did the right thing, but it still took a while to get over the fact that I missed out on a huge profit.
Hi James, great video I’ve been following for some time now. Quick question I have a business degree, is it possible to become chartered like yourself or do I have to follow a specific route? And which chartership is best in the UK? Thanks
I see the logic. I just manage my own SIPP, ISA and my wife's and my son's (hes 11) simply because I enjoy it. I don't stress out about it and i don't get emotional. I treat it like a hobby. 9:26
I once heard that 99.x% of all investment trades on world markets are by "investment professionals". i.e. at any given point, almost 50% of people who's job it is to pick "good stocks" are happy to sell, and 50% are wanting to buy. Given that people who get paid to make these decisions (and with lots of tools/data to base their decisions on) are nearly a 50/50 split of buy and sell .. what chance does the "man on the street" have of picking the right investments? I worked for an investment company for many years .. and if I had wealth to invest (for a reasonable timescale) I'd put it all into a global index fund and leave it there for as long as I could. Ok, maybe also with some investments into Property, or some completely different "asset class" .. but yeah, I would not be trying to "outperform the market". Even if I did, it's probably because I got lucky, not because I'm smart(er) 🙂
Totally. Not only that, but most of these "investment professionals" are presiding over funds which underperform trackers. Meaning that the source of their own wealth is the 95% (I forget the precise figure) directly from the never-ending supply of naive individuals who LOSE. Sharks eat minnows, who knew?
The way markets WORK is for EVERY buyer there HAS to be a seller. It's not like you've found some deep truth by stating the obvious. And given the amount of HFT (high frequency trading, done by computers, generally run by investment firms, etc), yeah, a huge proportion of the daily trading is NOT ordinary retail. Nothing new there either.
@rogergeyer9851 Going by your logic, this whole video is a waste of time, as it's nothing more than stating some facts. My point was not that I had uncovered some deep truths about investment trading that I, and only I, had worked out. It was that if you think about the idea of trying to "pick stocks" then there are people being paid a whole lot of money to do this, and at the point you're buying it, they are selling it (or vice versa), and it's worth pondering that before attempting "beat the index". You already know this - so good for you.
Another lie can be how active fund managers might skew the holdings of a fund (even beyond the stated criteria for the fund / fund rules). This is most likely in times of strong bull markets and lots of greed. I noticed this in a small tech. stock fund I held in '99. I won't mention the fund manager, not wanting to "get sued" as a favorite episode of "The Simpsons" featured years ago. It was supposed to be a DIVERSIFIED tech fund, but they had put a HUGE proportion (over half) into telephony/networking stocks, because they were wildly popular and had grown a LOT recently. I was looking at it because the crazy fund had grown about 100% in the last year (what I might expect in a decade - not a year). So I got the hell OUT. Sure enough, a year later, it was down over 50%, and I no longer trusted that fund manager. From my reading, there was a LOT of various companies and fund management playing fast and loose with the rules in the late 90's due to the dotcom frenzy.
The difficulty in not telling these lies for the little people is not knowing if we're investing at the tip before a plunge. Especially if they're only just now investing for the first time when the markets are at all time high. "Time in the market is better than timing the market" but the advise herw seems to suggest otherwise.
Another very common yet little discussed 'lie' is calling yourself passive investor while making irregular (by choice) purchases of global fund. Every payment becomes a mini market timing event. Solution: buy as soon as you get paid and don't worry you just made another purchase at all time highs.
I am confused. What you say in the second part of the video i completely the opposite of what you said in the beginning. Just don't look at the stock you bought with 20.000 and don't sell it at all How someone with little knowledge of stocks (as you say is not needed) can know that this stock worth later a 10.000 will continue to do bad? He doesn't. So, he should just hold it. Unless you need the money.
Zach's story is mine. I worked for Qualcomm and grew used to the stock price crashing every time we announced yet more record results. Where my story differs is that after I stopped working for the company I sold my stock and options as you suggest, glad to be free of watching their value go up and down. I got a good price, about $70. Today they are $205...
.. but they could have been $35 instead of $205, and how would you feel?? Ultimately holding a significant amount of your total net worth in one company (or asset) is never a great idea, and it's nigh on impossible to "time the market" .. so even though you might think "what could have been", I'm sure the money you made from $70 a share has been put to good use 🙂
If you are invested in a stock that is constantly going up-and-down and down and down. And you have a big chunk of your savings in it. It's gonna mess with your mind big time. Your emotions will be governed on whether the stocks go up. Then you will be in a good mood and if the stocks go down you will be in a bad mood that's not living
And mine 20 years ago. I lost a fortune as I still hold the stock. I swapped companies and sold them for cheap . So the message is don't have a large investment in your employer
I’ve found individual stock price movements are often counter intuitive… I’ve had holdings that have delivered stellar results on results day, and the price has plummeted that day. There’s likely all sorts of institutional games going on that hamper the private investor, and I only now trust baskets of stocks.
It is all based on expectations. A year ago I read that to justify the share price then Tesla would have to sell more cars than Toyota while maintaining their existing profit margin. Not impossible but their share price was bound to get punished unless they actually managed it.
@@MrDuncl very true… I do wish it was ALL based on actual results or even expectations though… I think for anything outside the big indexes (take AIM or even the FTSE 250..) there is definitely evidence of institutional or hedge fund pump and dump, also of taking a price down artificially to trigger stop losses, or even short selling games on easy targets. I lost thousands that way before I learned the lesson and just went all in on my pension into an index fund. The only other method I trust for an individual stock now is sharesave in the company I work for, where there’s a 20% discount at the outset, and a return of money in the rare case of a dip at option maturity.
@@jakeah1175 With companies like Tesla I think amateur share traders are as guilty of pumping as the institutions. Then they call foul when the price drops.
i consolidated all my work pensions into a SIPP 6 months ago and have been scared to buy any fund - it IS complicated and i have no idea what to buy LOL - thinking of just leaving it as cash until we have a black swan?
This can happen. The biggest challenge you're going to face as an investor is managing your own emotions. Typically, if I was transferring a client pension from a workplace pension where it is fully invested, I would reinvest that money as soon as it's received into the new pension. The aim is to keep them out of the market for as short a period as possible. From the client's perspective, they feel like they are remaining invested the whole time (even though technically, they are out of the market for a number of days as the transfer takes place). So there is no "is this a right time to buy" question, because they are already invested, all be it in something slightly different. However, you have had the money out of the markets for such a long time that getting started again involves a lot of emotion. Which is understandable because this may be a lot of money. I would watch this video here: ruclips.net/video/oeob9z27-gA/видео.htmlsi=YxQlFC8f-tIjzEUt And this one here: ruclips.net/video/lMYflVzok30/видео.htmlsi=uhDt4fTngQiaGa3o
The way Halifax displays stuff on their share trading platform is annoying. If a companies share price drops 10p but they have paid out 20p in dividends it is actually a good investment.
One way to handle that is to have two different types of investments -- active and passive. For the active part, you can play with them (trade them) all you want. As long as they're not too big a part of your overall portfolio (I use 10 to 20 percent), you can only do so much damage, even when you mess up. With the other 80% or more, if you invest it in good ETF's or low tax funds and LEAVE IT ALONE, the unrealized capital gains pile up for decades, and your taxes every year are just on fairly low dividends, so are a PALTRY part of your portfolio. That works well, but lets you satisfy your desire to trade. That idea isn't mine, it's Ben Graham's (of "The Intelligent Investor" fame). Paraphrasing, he said "You're going to trade anyway, so at least limit the risk and damage". Besides the ethos of saving and investing persistently, that was the best general investment advice I ever followed. Oh, and for me overall, considering the tax efficiency of buy and hold, there's little performance difference between trading, using options, etc. and buy and hold -- but of course buy and hold is a LOT less work AND risk...
Im investing for the long term, and my advice to those that havent experienced a crash or a slight drop (including myself) dont make emotional driven decisions that could cost more in the long run, decent index funds always recover, best to stick with your long term goals no matter the state of the market, remain consistent with your investments.
lol I am a set it and forget it investor. I am not a gambler and day trading is just gambling. I re-adjust my setup periodically to make sure I'm getting the dividend return I want, but that might be one or two things, not a constant turnover. Currently my dividend yield simply goes right back in. When I need it, it will be ready and earning over inflation.
It's not really a problem if you are doing it right. If you have lots of spare money kicking about to invest in the next boom sector then you aren't doing it right in the first place. You shouldn't really be sat on money waiting to invest as a passive long term investor (time in the market and all). If you plan on selling to buy the next boom sector you are then trading and not investing. So I set my direct debit to buy my fund and is treated on my monthly expenditure like a bill. It gets invested and it's then out of sight and out of mind. There then isn't any spare money to invest in the next boom even if I wanted to. Besides if you are the kind of person to have the itch then now you can invest in multiple ISAs so you don't really have an excuse to mess with your main investment pot.
But LOTS of active traders are CONVINCED THEY can accurately time the market. So they sit on LOTS of cash and outperform the market by a LOT, even while convincing themselves that NEXT TIME WILL BE DIFFERENT. Human nature is pretty persistent, overall.
Hmmmm, not sure I agree with point 2), why sell when market is down 10% and has plateaued... You've already invested in future growth (without any fees). Buy on cannons, sell on trumpets!
Some year you have lots of gains, you could use that or 99.9% of that to offset some major gains and help yourself have meaningfully less taxes that year. Or if the loss is big enough, for several otherwise high tax years. Something to consider. Not advice -- just something to be aware of.
If someone like "Zack" has alot of capital gains from such a holding for the long term, he might be resistant to selling due to the taxes due -- even if something like the SPY is FAR safer and likely to grow more over time. At least avoiding taxes is a rational reason, but getting out gradually is far less risky than not getting out HOPING for higher prices down the line.
Sometimes there might not be taxes to pay on the sale of the shares as the shares may have been acquired in a benefit in kind arrangement and the tax may have been paid when the shares were granted at an income tax rate. I buy shares in the company I work at in this manner, it's called an ESOP and so far its been very profitable.
In some situations, but typically it's best not to let tax dictate your investment portfolio. Don't let the tax tail wag the investment dog, as they say . For Zack, I advised that he transfer a portion of his shares over to his wife, as she was a basic rate taxpayer, and sell them all straight away. If this was close to the end of the tax year, I might have suggested they spread this over two years, but the benefits would be minimal, especially compared with the risk they are currently facing. It all depends on how far out of whack the current investment is and the size of the tax advantage from waiting. Because CGT allowances are only £3,000 now, the advantages of waiting are often very small. You also need to consider the risks of CGT rates potentially rising.
I’ve made mistakes and lost maybe £20-30 chopping and changing now when I move it has to be for a very good reason last year my entire pension portfolio was in VUSA I sold the lot and moved to VUAG why because it’s the exact same investment portfolio but has a cheaper unit cost and it’s an accumulation fund rather then a dividend fund so will out perform I also suspect the unit price will surpass VUSA by the end of the year we’ll see what happens.
So did anyone who just bought SPY or QQQ, etc. and HELD. And holding longer turns into 4X, 8X, 16X over a long enough time frame, especially on a nominal basis. And you need NO skill to invest in broad indexes -- just patience and the willingness not to panic and sell on dips.
That’s a great win. But Time frame is too short. What about 20 or 30 years ? It’s a long term game. Chance of you being able to beat the market over the time period is very remote.
My advice to everyone is this : if you want to grow big this year especially in your finances. Be willing to make investments. Saving is great but investing puts you on a pedestal where you wouldnt have to worry about savings as you do now. Thanks to larysa Caba, my portolio is doing really great and im proud of the decisions i made last year.
I have never seen a trader as open and transparent as Larysa Caba with her clients. The way she decides to make a profit for her clients. she allows you to express your fears and she still rests your fears and that is my respect. I don't normally comment on videos, but this word should be included. she is really cool.
I feel this is quite an easy one. You already have her name which makes it easy for you. Just look up her name online. I’m sure you will come across her. That’s how I found her too.
I bought Gamestop in 2019. Then in February 2020, I predicted that covid was unstoppable and would cause the market to crash, so I sold. Then it became a meme stock and I missed out on a 100x. I made a correct prediction and it cost me millions.
Gamestop is a perfect example of a stock that is not an investment, it's a gamble. Just in the first five months of the current year (2024), it has traded between $10 and $65 and never spent much time at the top. You didn't really **lose** millions unless you bought at the top and sold at the bottom, you just didn't make as much as you theoretically could have done if you had managed to sell at the peak. Unless, of course, you had bought a huge amount of stock 10-15 years earlier but held on as the shares gradually fell over that period.
Convincing. I try not to look at my holdings more than once a quarter. In between it is perfectly legitimate to wonder whether the holdings make sense, but never in terms of "market news" or whatever. I suppose that if any strategy other than borin' old global index (85% of my holdings) is possible or tempting, surely that must be contrarianism? People are still piling into this AI nonsense. So time to buy into soap and scrubbing brushes? I did recently start a new ETF with my latest £20k ISA, which is an "equal-weighting" S&P 500 tracker: so the fraction into MSFT (top) will be 1/500th, but also 1/500th will be Howmet Aerospace Inc. (position 250) and 1/500th Comerica Incorporated (position 500). Does that make sense? I have of course no idea whatsoever. I'm mainly doing it for a laugh.
Aside from the fact that over time, US indexes have tended to outperform global ones, your boring global portfolio sounds fine. (For the rest of it -- no opinion). I'm an American and have a MUCH larger general international (ex US) stake than outfits like Vanguard recommend. It's my hedge against our idiotic federal government (led by congress). Sometimes, you just need to sleep well, etc. Obviously, at some point, that US leadership in stock performance could change.
@@rogergeyer9851 That's a good strategy according to James (author hereof). Not long ago he did a vid (or it might have been Damian Talks Money) which proved that non-US Developed World markets have historically outperformed US indices surprisingly regularly. Since 2010 or so the US has been stellar. So much so that I'd be far from surprised to see one of those switch-arounds. Or maybe this really REALLY is a "new paradigm" (they used to say that, far too often). Global indices help me sleep at night. They are usually about 2/3 US companies anyway, but I do like a dash of US-focused excitement to add to the mix. One of the two active funds I hold is BRK.B, and Mr B is crazy about AAPL. I personally can't stand the Apple "ecosystem" but hey.
I'm UK based and have a small s&P 500 equal weight position too; my concern is that even when you exclude the mega cap 8, the S&P is at higher valuations (PE ratio) than pre COVID and for many years prior. But if you got a long investment horizon you probably don't care much
@@elephantandcastle838 Being quite ignorant, I never know what to think about PE ratios, i.e. whether and to what extent they should determine investment decisions. If other (Developed) markets have healthier ratios shouldn't the money already be draining out of the US into Germany, Japan, France, etc.? Or should we be worried that higher (less good) ratios are here to stay and therefore we (equity investors) are all doomed to being in the doldrums for many years? I do invest in wine... quite regularly. It's a wasting asset though.
There's a lot of luck in the market -- especially with timing. A lot more luck than expertise, actually, given all the bold CLAIMS of expertise, all the claims about TA (vs. no meaningful success), etc. For every NVDA you could cherry pick, there are plenty of INTC's, etc. that went very much the other way over time. Or were dead money, even while the QQQ, SPY, etc. have done VERY well.
Good video! I'm out-performing my Financial Planner by 3% and I'm paying a 1% fee to that person so I'm really losing 4% compared to the smaller 401K I manage.
Whatever. What does that even mean? That you've piled headlong into snake-oil AI stocks recently when your "Financial Planner" (er, why do you need one of them anyway?) suggested you shouldn't? Maybe in 25 years from now your "Financial Planner" will be seen to have outperformed you by 8%. Who knows and who cares?
I wish, I could give it an upvote. But it is four lies. By repeating that the stock market is a highly efficient machine you are lying to yourself and all the viewers. Its been proven to not be efficient and is obvious. Efficiency would equate extremely low volatility. The stock market is real companies with a nonstop leveraged casino on top. It's as human as it gets. And many times during bull market it quickly shifts towards last fool standing mode.
Currently, hiring an investment advisor is the best way to invest in the stock market. I invested in stocks on my own without much success until my wife introduced me to an advisor. This year, I have increased my capital by more than 50%
The question is why. What is this going to achieve? Why does this building really matter it'll be another soulless lump of glass shot ever higher into the sky... 🤔
@HOSTLINE-JamesShack hi James haha. This is a massive copy and paste error! I'm a big fan on the B1M construction channel and this comment was in relation to another glass sky scraper being built. Apologies!
It's only a loss if you sell. If it's down and you do nothing, you have lost nothing.
Dead wrong. Your net worth plummets if your portfolio plummets. The YOLO clowns re Wall Street bets who bet big, gained $MILLIONS, REFUSED to sell, and lost IT ALL playing with short term options, for example -- show the exact OPPOSITE of what you claim is true.
People don't like to face up to losses (loss aversion). That doesn't MAKE the losses any less REAL.
This comment is a great example of Lie 2.
Another way of looking at it is that it’s a loss the moment you buy - the money has left your bank account after all. It only becomes a gain when you sell at a profit.
In truth, with a liquid investment, the value at any moment is the quoted price.
Not forgetting the benefit of timing the selling of a loss to minimise any capital gains you might have incurred in other investments, especially in a GIA.
Cope
Biggest lesson i've learnt in 2024 in the stock market is that nobody knows what is going to happen next, so practice some humility and follow a strategy with a long term edge.
Nobody knows anything; You need to create your own process, manage risk, and stick to the plan, through thick or thin, While also continuously learning from mistakes and improving.
Uncertainty... it took me 5 years to stop trying to predict what bout to happen in market based on charts studying, cause you never know. not having an advisor guide me cost me 5 years of pain I learn to go we’re the market is wanting to go and keep it simple with discipline.
Who is this person guiding you and how can i reach he/she?
Sharon Ann Meny is the licensed advisor I use. Just search the name. You’d find her webpage and necessary details to work with to set up an appointment.
Thank you for the recommendation. I'll send her an email, and I hope I'm able to reach her.
Great video, I've been interested in investing ever since I came across articles of people making up to $150,000 and more in this period, thanks for the video but is it really possible for a retail investor to achieve this in months?
I've purchased numerous stocks in individual firms. Because there are so many stocks that will skyrocket in the long run, it is currently safe to buy in on ETF and ride it out. Due to fud, I sold out early, but then retraced my ways and re-invested $350,000 with a financial advisor who manages my account. I received an 82% return last year and will see where it goes this year.
that's quite impressive, you surely made a good bit of money. I myself invested in warren's BRK-A stock quite pricey but totally worth it.
I just started a few months back, I'm going for long term, I'm still trying to wrap my head around it, who’s this advisor you work with ?
Carol Vivian Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
This video should be compulsory viewing for every investor!
Amazing clarity and for some lucky people starting their investment journey this video could literally be worth millions!
“If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.” - Warren Buffett
Loved the lululemon Vs FedEx earnings and stock price moves. Great example to demonstrate the points you make!
I had never even heard of lululemon. It looks to be a fad company like Superdry. FedEx have been around for decades. If their sales drop 2% a year for the next decade they will still be a big company.
You did an amazing job at being data driven on explaining some critical points that are counterintuitive to investing !! Big thanks for putting the video together and being so data driven in your narration
Great video James thanks for posting.
I’m fortunate enough to work for a company that matches shares that I buy, so long as I hold them for a year. So I buy what I can, the company then doubles my allocation and I immediately sell up and invest it all in a global index fund. It’s beautiful!
Problem is I know some colleagues who have just kept the company shares for years, and they’re not growing anywhere near as much as index funds, crazy…
Take the match then get out!
Yes, if you have a company with meh performance, that sounds just right, given the risks of holding ONE stock compared to a broad index.
I had a career at IBM and while IBM gave a 15% discount on the stock to employees and the company was growing, I was happy to plow the allowed 10% of my salary into the stock, and sell occasionally when it rose significantly.
But once all the cost cutting kicked in and (true to form) they stopped the discount on the stock, I stopped participating RIGHT away. And from then on, their overall growth over time has been poor for a tech stock (which was unsurprising to me).
James is very right, I spent a year actively investing, reading all the books, doing all all the research, spending many hours each week. Now I dollar cost average into index funds for low risk and crypto for high risk, spending minutes a month
Much easier!
Same!
It took me a lot of reading, studying, watching and research to realise all this. I really found an interest in finance, pensions and investing and eventually came to the conclusion that to just ‘set & forget’ was ultimately easier and yielded the greatest results!
Great video; thankyou!
That’s the journey most people have to go on.
Passive investing is counterintuitive which is why most people have to start with active, and ideally don’t end up making too many mistakes before they see the light!
@@JamesShack Yes, exactly. I got my wife to do the right thing despite never taking this journey. She is less than interested but still invests in a global, passive index fund.
All down to my assertions I guess but if she has looked at it twice in the last six years, I would be surprised.
@@JamesShack You need a few setbacks to realise it. Mine were playing double or quits on Marconi, then switching to safe and secure Lloyds in 2008 just before the government persuaded them to take on Halifax which I had recognised as a Basket case back in 2003. One argument for keeping such shares is as a reminder of how easy it is to get things wrong.
couldn't agree more, there's a been more talk of passive investing with newer finfluencers and I'm grateful to learn from their journeys!
Buy high sell low. Best advice I ever heard.
I just ignored it and buy all the time. Every week I buy whether its up down or sidways.
There is logic to investing constant amounts at constant intervals. In particular, when it’s cheap you buy more and when it’s expensive you buy less. (Buy the dip!) If the asset ends up being flat after a year, you’ll have an overall gain.
hey James I would really appreciate a video on factor investing. this is the way I invest my own money after a lot of research and reading on rational reminder community. have decided to be ok with slightly higher fees and a bit more of work when I invest (spreading my money trough 5 etfs instead of 1 (vwce as I was doing before). but the principle is the same, set an allocation and just stick to it.
you are one of my favorite RUclipsr, cheers
OK like many people here I've got some BG funds that have tanked and I'm looking at a 50% loss. So the wisdom is I should sell and re-invest. BUT there are 2 problems. Firstly - I might just end up buying another bad fund - another BG - and face more loss. Secondly - at this time nearly everything seems very frothly / overpriced .... Oh and thirdly... looking at the price graph of my poor BG fund.... it went up from a low price over several years - so what's to stop that happening again in the future and I get back to break-even or better ?
Another great video, James with some key messages - mandatory viewing for all investors. As someone who has been investing for 30+ years in various forms I can attest to all three of these lies and have certainly been guilty of No 2 myself - many times. Crystallising a loss is easy to say, rather more difficult to do. Like most things, having a plan (written down) helps with difficult decisions. There is a good book called the Idle Investor by Edmund Shing that talks to the idea of less is more.
Every day is a school day!
Thanks for the education James 😁
Can you talk about risk please - funds folding, or platforms folding etc?
Not the investment risk - the middle man risk especially with a long term investment like saving for retirement or drawdown.
Lie 2 has me confused now - can you confirm you are referring to holding on to individual stocks that aren't particularly strategic, as opposed to say a global index? I fully intend to hold onto my index fund when it is down in the 'hope' that it comes back!
My advice to new investors: Buy good companies stocks and hold them as long as they are good companies. Just do this and ignore the forecasts and market views which are at best entertaining but completely useless. By doing this, I have managed to grow my portfolio to $500k.
For years, I've resolved to open a brokerage account and invest safely, but I can't make myself do it. It's time to admit I'll never be the thrifty DIY investor millennials are expected to be.
Buy and Hold the magnificent companies DON'T LOOK AT IT DAILY, Hold 5-10 years. These companies, like mutual funds, are diversified and financially strong. Also, work with a fiduciary financial advisor. I've done this for 7 years and reached a million dollars in April.
Glad I found this discussion. My portfolio hasn't done well lately, and I think I need a financial advisor. How can I reach the person helping you?
Sure, 'Melissa Elise Robinson' is the licensed advisor I use. Just research the name. You’d find necessary details on the web to set up an appointment.
What a share!! it was easy to find your adviser. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
Hey James. Really enjoying your content. Can you point me at anything you’ve done relating to a couple of different subjects: 1) what order to draw from different investments in retirement, and 2) impacts of the relatively recent removal of the pensions LTA and any concerns with piling in cash over the previous LTA now? Many thanks!
Hi James, great channel very informative. Quick question, I have 3 personal pensions in the UK one is with Zurich that is actually a money purchase scheme where I either take all of the fund or none of the fund. My intention is to convert the Zurich fund into an International SIPP and commence drawing down on this fund in 3 to 5 years, I am currently 58 years old. Can I take the 25% tax free allowance from all 3 of my pensions or am I allowed only one tax free lump sum no matter how many pension plans I have?
Should be taught in every school.
Should be but the powers don't want us to do well!
Good video. My own example of lie 2. Bought Cineworld and held it until it went bust, emotion juts did not allow me to sell at a loss. Learn form my mistake!
Love your content. Would love to see you weigh up the pros and cons of IFAs that charge a % versus those that charge a fixed fee.
Hey James, I’ve been a watcher for a while. Great video but there was one scenario you didn’t cover. If you bought those 25 index funds as you said in your example, what if they’re up? Should you still sell and consolidate?
This one has really resonated with me. As a purchaser of several 'popular' things from BG a few years back, most sitting on 30-60% losses! Thankfully that lesson was learnt right at the start of my investing journey, with the bulk still invested in Index funds at the same time, and pretty much just that since. I haven't sold them to crystallize a loss - they might turn good - and if they don't - the awful performance serves as an etching on my brain to think before doing something similar again!
Hi James,
Love the videos, you've taught me so much and I'm very grateful!
Regards this video - some really interesting, thought provoking points. I might be wrong but I'm sure I've read elsewhere that sometimes its bad to crystalise losses and its wise to keep the 'losers' while selling the 'winners' - I did have a lot of single company shares until I saw your videos and have changed this, but still hold onto VOD and LLOY as they are down so far; very much like your example in the video. I shall be thinking more about what to do now.
-------
General point not related to this video, but some of your others:
Quite a few of your pension case studies use the guyton klinger guardrails. I've read that these can result in very large reductions in income over time, if historical modelling is done, and a worst case event from the past occurs.
I was wondering if you have ever modelled what the variable income would look like? Perhaps an idea for a future video?
Wow, James really knows his stuff and he's great at explaining it to others. Another fantastic video James, always look forward to learning from you. Thanks.
James - The 'Basic Risk Paradigm' touched on throughout this video.
Hi James, very good content. Here's my issue though, I'm 60 and hope to retire in 7 - 10 years. I don't think index fund (s) is going to get me there in that time frame, with an investment of approx. £500/month across SIPP and ISA. My workplace pension/SIPP/ISA etc pots currently are only approx £165K. I need to get to approximately £500K+ in my estimation to invest that in dividend stocks at retirement to live off the dividends or at least supplement my pension pot drawdown/state pension with a greater chunk being dividend income, if possible. What would you suggest?
Another great video James, I'm in the position of holding on to half a dozen actively managed funds in a SIPP that are down. One Ballie Gifford fund is currently over 60% down, I do have another SIPP with one passive index fund that is doing well but often think that I should cut my losses with the actively managed ones.
This video was for you then!
@@JamesShack haha it would seem so, still not easy pressing the button.
Brilliant and spot on James, pls can you do more videos on selecting Pension investments, you would imagine big pension companies are good at this but they don’t seem to be. Can anyone explain what is going on with UK 15 gilts, these are at -40% shouldn’t things improve now inflation is allegedly reducing? Is it reasonable to expect things to improve or like you say James do you just look at the current value when deciding what to do.
Agree with much of this - but what about asset allocation. Any diversified portfolio, will, in time, move away from the initial allocation. What alternative is there in this scenario, other than to sell and buy in order to re-balance the allocation?
In addition, any well-diversified fund is itself buying and selling all the time - even if it is just tracking an index.
If you want to keep your balance, then of course, over time, you'll have to sell some winners. But you can do so incrementally, and you're not getting out of the market, just toning down the risk of bigger winners.
Longer term, that actually enhances performance but it DOES cause some taxable events re realized capital gains. Doing it incrementally (somewhat gradually) like once a year helps such gains not get out of hand.
If you invest in a single allocation fund, that gets done for you.
If you have multiple funds, then yes, you may need to rebalance; we typically do that once a year.
@@JamesShack but, in that case, doesn't the "single allocation fund" just have to do the buying and selling within the fund itself ?
@@rl3799 yes, but ideally it will be systematic, as in it’s not trying to be smart guess the best time to buy or sell, it just does it every day/week/year. What ever the system is.
How do you try to distinguish between a good time to sell and not just becoming the typical retail investor that buys high and sells low?
The idea is to try and minimise the amount of time you do need to sell.
Ideally you’d be invested in something you can stick with for the long term.
I agree .... The more trade the higher the margin of error and higher brokerage fees
hey James, thanks for this one, its answered a question I've been thinking about lately..... but here's a question for maybe a future video that relates to what you're talking about here....
I have a SIPP with a bunch of investments, but I'm wondering what to do with my savings.... I'm trying to achieve better returns than high street 5%, but I want to keep the cash available for a potential house move in 1-3 years..... At the moment, some is in a stocks ISA (S&P 500) and the rest is in a 5% savings account....
Are there any other options that would perform better?
I’ve done a video on this type of thing here. ruclips.net/video/jCUbBLxtzMo/видео.htmlsi=F8Wt6IzWcRkqy6Mp
Totally agree, the financial advice industry wants people to think it's way more complicated than it really is to be a successful investor. Previously I had a company pension with Scottish Widows and was treated to a financial advice live session, where the "financial experts" spent 1 hour making investing sound as complicated as possible and make it seem that you needed expensive actively managed funds. Total rip off.
If all a financial adviser is offering you is to select an investment portfolio, then it's not likely to be worth it.
Although saying that, some people, as you’ll see in the comments, do find it very difficult to invest and manage their emotions without a guide.
A great video which was incredibly helpful, thank you James
Glad it was helpful!
I do well just buying index trackers and blow away any managed fund returns.
Part of point 3 contradicts part of point 1. You don't need to know in point 1 but you do need to know in point 3...
Point 3 is demonstrating why it’s so hard to know. And therefore why, in most cases, it’s best not to try to second guess the markets.
Fresh trim James!
Please can you do a video on RSUs, ESPP and the benefits of opting in with salary sacrifice, and methods people could use to be more tax efficient with it! Also opting into salary sacrifice for Workplace pensions (DC) and saving on NI.
Many thanks!
Won't that depend on what a company offers ? Yes Salary Sacrifice is great especially if you are just over the Higher Rate tax threshold. It is almost tempting to lease an EV as well to benefit from it even more.
Novice question - why on earth would you gamble with stocks and shares when you can get a guaranteed interest rate through an ISA? From where I’m sitting, you’re gambling losses for an extra 3-5% - doesn’t make sense to me.
He gives an example in the video where 1.67% difference over 30 years is -£337,393... that should answer your question.
The goal is to outrun inflation, not keep up with it. The rates of fixed are typically around/slightly under the rate of inflation (though its not directly corrolated).
You need better returns than that for growth.
I'm sorry to tell you but you may think your money is growing in a fixed rate isa but your purchasing power is slowly dwindling away.
Great video, keep up the great work bud
Ex proprietary trader and investment banker: mainly ETFs in SIPPs, mainly single stocks in ISAs, other investments aside.
At the start of the year I decided to be sensible and to simplify the mess of random stocks I'd accumulated. One I sold was a significant holding in ... NVIDIA.
About a week later it went ballistic.
Oh well. I have to accept that, logically, I did the right thing, but it still took a while to get over the fact that I missed out on a huge profit.
Hi James, great video I’ve been following for some time now. Quick question I have a business degree, is it possible to become chartered like yourself or do I have to follow a specific route? And which chartership is best in the UK? Thanks
This is what financial planners typically start with : www.cii.co.uk/learning/qualifications/diploma-in-financial-planning-qualification/
I see the logic. I just manage my own SIPP, ISA and my wife's and my son's (hes 11) simply because I enjoy it. I don't stress out about it and i don't get emotional. I treat it like a hobby. 9:26
I once heard that 99.x% of all investment trades on world markets are by "investment professionals". i.e. at any given point, almost 50% of people who's job it is to pick "good stocks" are happy to sell, and 50% are wanting to buy. Given that people who get paid to make these decisions (and with lots of tools/data to base their decisions on) are nearly a 50/50 split of buy and sell .. what chance does the "man on the street" have of picking the right investments? I worked for an investment company for many years .. and if I had wealth to invest (for a reasonable timescale) I'd put it all into a global index fund and leave it there for as long as I could. Ok, maybe also with some investments into Property, or some completely different "asset class" .. but yeah, I would not be trying to "outperform the market". Even if I did, it's probably because I got lucky, not because I'm smart(er) 🙂
Totally. Not only that, but most of these "investment professionals" are presiding over funds which underperform trackers. Meaning that the source of their own wealth is the 95% (I forget the precise figure) directly from the never-ending supply of naive individuals who LOSE. Sharks eat minnows, who knew?
Great comment!
The way markets WORK is for EVERY buyer there HAS to be a seller. It's not like you've found some deep truth by stating the obvious.
And given the amount of HFT (high frequency trading, done by computers, generally run by investment firms, etc), yeah, a huge proportion of the daily trading is NOT ordinary retail. Nothing new there either.
@rogergeyer9851 Going by your logic, this whole video is a waste of time, as it's nothing more than stating some facts. My point was not that I had uncovered some deep truths about investment trading that I, and only I, had worked out. It was that if you think about the idea of trying to "pick stocks" then there are people being paid a whole lot of money to do this, and at the point you're buying it, they are selling it (or vice versa), and it's worth pondering that before attempting "beat the index". You already know this - so good for you.
@@rogergeyer9851Think you missed the point he was making
Another lie can be how active fund managers might skew the holdings of a fund (even beyond the stated criteria for the fund / fund rules). This is most likely in times of strong bull markets and lots of greed.
I noticed this in a small tech. stock fund I held in '99. I won't mention the fund manager, not wanting to "get sued" as a favorite episode of "The Simpsons" featured years ago.
It was supposed to be a DIVERSIFIED tech fund, but they had put a HUGE proportion (over half) into telephony/networking stocks, because they were wildly popular and had grown a LOT recently.
I was looking at it because the crazy fund had grown about 100% in the last year (what I might expect in a decade - not a year). So I got the hell OUT. Sure enough, a year later, it was down over 50%, and I no longer trusted that fund manager. From my reading, there was a LOT of various companies and fund management playing fast and loose with the rules in the late 90's due to the dotcom frenzy.
Very good video, made me rethink my individual stock investments
The difficulty in not telling these lies for the little people is not knowing if we're investing at the tip before a plunge. Especially if they're only just now investing for the first time when the markets are at all time high. "Time in the market is better than timing the market" but the advise herw seems to suggest otherwise.
Another very common yet little discussed 'lie' is calling yourself passive investor while making irregular (by choice) purchases of global fund. Every payment becomes a mini market timing event.
Solution: buy as soon as you get paid and don't worry you just made another purchase at all time highs.
Very true.
I am confused.
What you say in the second part of the video i completely the opposite of what you said in the beginning.
Just don't look at the stock you bought with 20.000 and don't sell it at all
How someone with little knowledge of stocks (as you say is not needed) can know that this stock worth later a 10.000 will continue to do bad? He doesn't. So, he should just hold it. Unless you need the money.
Zach's story is mine. I worked for Qualcomm and grew used to the stock price crashing every time we announced yet more record results. Where my story differs is that after I stopped working for the company I sold my stock and options as you suggest, glad to be free of watching their value go up and down. I got a good price, about $70. Today they are $205...
.. but they could have been $35 instead of $205, and how would you feel?? Ultimately holding a significant amount of your total net worth in one company (or asset) is never a great idea, and it's nigh on impossible to "time the market" .. so even though you might think "what could have been", I'm sure the money you made from $70 a share has been put to good use 🙂
@@zedzeduk Concur. The only individual company any retail investor should invest in is their own. And even then only if they have no choice.
If you are invested in a stock that is constantly going up-and-down and down and down. And you have a big chunk of your savings in it.
It's gonna mess with your mind big time. Your emotions will be governed on whether the stocks go up. Then you will be in a good mood and if the stocks go down you will be in a bad mood that's not living
And mine 20 years ago. I lost a fortune as I still hold the stock. I swapped companies and sold them for cheap . So the message is don't have a large investment in your employer
@@seanbyrne2220 Yes the peace of mind was worth it - just about! I made enough money out of selling the stock - but 3 x as much would be nice.
I’ve found individual stock price movements are often counter intuitive… I’ve had holdings that have delivered stellar results on results day, and the price has plummeted that day. There’s likely all sorts of institutional games going on that hamper the private investor, and I only now trust baskets of stocks.
It is all based on expectations. A year ago I read that to justify the share price then Tesla would have to sell more cars than Toyota while maintaining their existing profit margin. Not impossible but their share price was bound to get punished unless they actually managed it.
@@MrDuncl very true… I do wish it was ALL based on actual results or even expectations though… I think for anything outside the big indexes (take AIM or even the FTSE 250..) there is definitely evidence of institutional or hedge fund pump and dump, also of taking a price down artificially to trigger stop losses, or even short selling games on easy targets. I lost thousands that way before I learned the lesson and just went all in on my pension into an index fund. The only other method I trust for an individual stock now is sharesave in the company I work for, where there’s a 20% discount at the outset, and a return of money in the rare case of a dip at option maturity.
@@jakeah1175 With companies like Tesla I think amateur share traders are as guilty of pumping as the institutions. Then they call foul when the price drops.
i consolidated all my work pensions into a SIPP 6 months ago and have been scared to buy any fund - it IS complicated and i have no idea what to buy LOL - thinking of just leaving it as cash until we have a black swan?
This can happen.
The biggest challenge you're going to face as an investor is managing your own emotions.
Typically, if I was transferring a client pension from a workplace pension where it is fully invested, I would reinvest that money as soon as it's received into the new pension. The aim is to keep them out of the market for as short a period as possible.
From the client's perspective, they feel like they are remaining invested the whole time (even though technically, they are out of the market for a number of days as the transfer takes place).
So there is no "is this a right time to buy" question, because they are already invested, all be it in something slightly different.
However, you have had the money out of the markets for such a long time that getting started again involves a lot of emotion. Which is understandable because this may be a lot of money.
I would watch this video here:
ruclips.net/video/oeob9z27-gA/видео.htmlsi=YxQlFC8f-tIjzEUt
And this one here:
ruclips.net/video/lMYflVzok30/видео.htmlsi=uhDt4fTngQiaGa3o
@@JamesShack thanks
The way Halifax displays stuff on their share trading platform is annoying. If a companies share price drops 10p but they have paid out 20p in dividends it is actually a good investment.
My problem is I cant stop changing my shares etc, leaving it alone is hard lol
sounds like you need lower risk investments than what you currently have
One way to handle that is to have two different types of investments -- active and passive.
For the active part, you can play with them (trade them) all you want. As long as they're not too big a part of your overall portfolio (I use 10 to 20 percent), you can only do so much damage, even when you mess up.
With the other 80% or more, if you invest it in good ETF's or low tax funds and LEAVE IT ALONE, the unrealized capital gains pile up for decades, and your taxes every year are just on fairly low dividends, so are a PALTRY part of your portfolio.
That works well, but lets you satisfy your desire to trade.
That idea isn't mine, it's Ben Graham's (of "The Intelligent Investor" fame). Paraphrasing, he said "You're going to trade anyway, so at least limit the risk and damage".
Besides the ethos of saving and investing persistently, that was the best general investment advice I ever followed.
Oh, and for me overall, considering the tax efficiency of buy and hold, there's little performance difference between trading, using options, etc. and buy and hold -- but of course buy and hold is a LOT less work AND risk...
Excellent video.
Was that company BT group
Im investing for the long term, and my advice to those that havent experienced a crash or a slight drop (including myself) dont make emotional driven decisions that could cost more in the long run, decent index funds always recover, best to stick with your long term goals no matter the state of the market, remain consistent with your investments.
One of my stocks is a bit down on my investment, but the dividends mean I’m still up.
lol I am a set it and forget it investor. I am not a gambler and day trading is just gambling. I re-adjust my setup periodically to make sure I'm getting the dividend return I want, but that might be one or two things, not a constant turnover. Currently my dividend yield simply goes right back in. When I need it, it will be ready and earning over inflation.
It's not really a problem if you are doing it right. If you have lots of spare money kicking about to invest in the next boom sector then you aren't doing it right in the first place. You shouldn't really be sat on money waiting to invest as a passive long term investor (time in the market and all).
If you plan on selling to buy the next boom sector you are then trading and not investing.
So I set my direct debit to buy my fund and is treated on my monthly expenditure like a bill. It gets invested and it's then out of sight and out of mind. There then isn't any spare money to invest in the next boom even if I wanted to.
Besides if you are the kind of person to have the itch then now you can invest in multiple ISAs so you don't really have an excuse to mess with your main investment pot.
But LOTS of active traders are CONVINCED THEY can accurately time the market. So they sit on LOTS of cash and outperform the market by a LOT, even while convincing themselves that NEXT TIME WILL BE DIFFERENT.
Human nature is pretty persistent, overall.
@@rogergeyer9851 Sometimes people need to be a bit less human and a bit more robot! 😂
I feel so seen by point 2. Oh dear
For me it’s a piece of cake to set and forget. For my work place pension I want to check that mansion thingy and take back control to save on fees
Hmmmm, not sure I agree with point 2), why sell when market is down 10% and has plateaued... You've already invested in future growth (without any fees). Buy on cannons, sell on trumpets!
I think I know Zack, they're all around me at work!
I feel this compulsion to change the "I'm being lied to" words on that piece of paper to "Penguins are Cute. Vote for Penguins"
I have a huge loss in my portfolio on a single stock.
I keep it there as a memento to what happens when I get too greedy
UK? Royal Bank of Scotland?
Some year you have lots of gains, you could use that or 99.9% of that to offset some major gains and help yourself have meaningfully less taxes that year.
Or if the loss is big enough, for several otherwise high tax years.
Something to consider. Not advice -- just something to be aware of.
Look up tax loss harvesting.
@@skf957 Upstart
@@rogergeyer9851 we can't do that in Switzerland
To let fund or investment fall 55% is just stupid. Hedge funds would be bust!
If someone like "Zack" has alot of capital gains from such a holding for the long term, he might be resistant to selling due to the taxes due -- even if something like the SPY is FAR safer and likely to grow more over time.
At least avoiding taxes is a rational reason, but getting out gradually is far less risky than not getting out HOPING for higher prices down the line.
Sometimes there might not be taxes to pay on the sale of the shares as the shares may have been acquired in a benefit in kind arrangement and the tax may have been paid when the shares were granted at an income tax rate. I buy shares in the company I work at in this manner, it's called an ESOP and so far its been very profitable.
In some situations, but typically it's best not to let tax dictate your investment portfolio.
Don't let the tax tail wag the investment dog, as they say .
For Zack, I advised that he transfer a portion of his shares over to his wife, as she was a basic rate taxpayer, and sell them all straight away.
If this was close to the end of the tax year, I might have suggested they spread this over two years, but the benefits would be minimal, especially compared with the risk they are currently facing.
It all depends on how far out of whack the current investment is and the size of the tax advantage from waiting.
Because CGT allowances are only £3,000 now, the advantages of waiting are often very small.
You also need to consider the risks of CGT rates potentially rising.
Too much of generalisation. There are people who make money trading.
Price of companies has nothing to do with actually profit or turn over
What do you mean by that?
@@JamesShack companies value get so out of whack from returns…. Well for Lots of big companies. So many bubbles 🫧 waiting to burst.
I’ve made mistakes and lost maybe £20-30 chopping and changing now when I move it has to be for a very good reason last year my entire pension portfolio was in VUSA I sold the lot and moved to VUAG why because it’s the exact same investment portfolio but has a cheaper unit cost and it’s an accumulation fund rather then a dividend fund so will out perform I also suspect the unit price will surpass VUSA by the end of the year we’ll see what happens.
Investing myself and more than doubled what I have invested
Over what time period?
So did anyone who just bought SPY or QQQ, etc. and HELD. And holding longer turns into 4X, 8X, 16X over a long enough time frame, especially on a nominal basis.
And you need NO skill to invest in broad indexes -- just patience and the willingness not to panic and sell on dips.
Just over four years. Bought a shed load of Bp under £2
That’s a great win. But Time frame is too short. What about 20 or 30 years ? It’s a long term game. Chance of you being able to beat the market over the time period is very remote.
Sorry, switched it off when i saw the rounding error at 3:40....only kidding, great content as always! Keep up the excellent work James!
Something is bumping your microphone James. It's distracting away from your excellent information.
My advice to everyone is this : if you want to grow big this year especially in your finances. Be willing to make investments. Saving is great but investing puts you on a pedestal where you wouldnt have to worry about savings as you do now. Thanks to larysa Caba, my portolio is doing really great and im proud of the decisions i made last year.
I have never seen a trader as open and transparent as Larysa Caba with her clients. The way she decides to make a profit for her clients. she allows you to express your fears and she still rests your fears and that is my respect. I don't normally comment on videos, but this word should be included. she is really cool.
I just looked up her name online. she is licensed with credible certificates and has an amazing track record. Thank you for the message.
Extra de tails ple ase
I feel this is quite an easy one. You already have her name which makes it easy for you. Just look up her name online. I’m sure you will come across her. That’s how I found her too.
You can also find her on
I bought Gamestop in 2019. Then in February 2020, I predicted that covid was unstoppable and would cause the market to crash, so I sold. Then it became a meme stock and I missed out on a 100x. I made a correct prediction and it cost me millions.
Gamestop is a perfect example of a stock that is not an investment, it's a gamble. Just in the first five months of the current year (2024), it has traded between $10 and $65 and never spent much time at the top. You didn't really **lose** millions unless you bought at the top and sold at the bottom, you just didn't make as much as you theoretically could have done if you had managed to sell at the peak. Unless, of course, you had bought a huge amount of stock 10-15 years earlier but held on as the shares gradually fell over that period.
I was recommended a book "Millionaire Expat", wish I'd known the message in it 20 years ago. It is basically exactly what James is saying here.
Convincing. I try not to look at my holdings more than once a quarter. In between it is perfectly legitimate to wonder whether the holdings make sense, but never in terms of "market news" or whatever. I suppose that if any strategy other than borin' old global index (85% of my holdings) is possible or tempting, surely that must be contrarianism? People are still piling into this AI nonsense. So time to buy into soap and scrubbing brushes? I did recently start a new ETF with my latest £20k ISA, which is an "equal-weighting" S&P 500 tracker: so the fraction into MSFT (top) will be 1/500th, but also 1/500th will be Howmet Aerospace Inc. (position 250) and 1/500th Comerica Incorporated (position 500). Does that make sense? I have of course no idea whatsoever. I'm mainly doing it for a laugh.
Aside from the fact that over time, US indexes have tended to outperform global ones, your boring global portfolio sounds fine. (For the rest of it -- no opinion).
I'm an American and have a MUCH larger general international (ex US) stake than outfits like Vanguard recommend. It's my hedge against our idiotic federal government (led by congress). Sometimes, you just need to sleep well, etc.
Obviously, at some point, that US leadership in stock performance could change.
@@rogergeyer9851 That's a good strategy according to James (author hereof). Not long ago he did a vid (or it might have been Damian Talks Money) which proved that non-US Developed World markets have historically outperformed US indices surprisingly regularly. Since 2010 or so the US has been stellar. So much so that I'd be far from surprised to see one of those switch-arounds.
Or maybe this really REALLY is a "new paradigm" (they used to say that, far too often).
Global indices help me sleep at night. They are usually about 2/3 US companies anyway, but I do like a dash of US-focused excitement to add to the mix. One of the two active funds I hold is BRK.B, and Mr B is crazy about AAPL. I personally can't stand the Apple "ecosystem" but hey.
I'm UK based and have a small s&P 500 equal weight position too; my concern is that even when you exclude the mega cap 8, the S&P is at higher valuations (PE ratio) than pre COVID and for many years prior. But if you got a long investment horizon you probably don't care much
@@elephantandcastle838 Being quite ignorant, I never know what to think about PE ratios, i.e. whether and to what extent they should determine investment decisions. If other (Developed) markets have healthier ratios shouldn't the money already be draining out of the US into Germany, Japan, France, etc.? Or should we be worried that higher (less good) ratios are here to stay and therefore we (equity investors) are all doomed to being in the doldrums for many years? I do invest in wine... quite regularly. It's a wasting asset though.
On the other hand I bet those that were down 60% on Nvidia in 2022 would be kicking themselves now for selling and going to an index fund 😂🙄
There's a lot of luck in the market -- especially with timing. A lot more luck than expertise, actually, given all the bold CLAIMS of expertise, all the claims about TA (vs. no meaningful success), etc.
For every NVDA you could cherry pick, there are plenty of INTC's, etc. that went very much the other way over time. Or were dead money, even while the QQQ, SPY, etc. have done VERY well.
Not costing me anything. All mine's in property 😊.
Good video! I'm out-performing my Financial Planner by 3% and I'm paying a 1% fee to that person so I'm really losing 4% compared to the smaller 401K I manage.
Whatever. What does that even mean? That you've piled headlong into snake-oil AI stocks recently when your "Financial Planner" (er, why do you need one of them anyway?) suggested you shouldn't? Maybe in 25 years from now your "Financial Planner" will be seen to have outperformed you by 8%. Who knows and who cares?
What on earth are you paying someone 1% of your hard earned investments when you know an index fund performs better??!!!
Just buy VOO and QQQ and your done.
I wish, I could give it an upvote. But it is four lies. By repeating that the stock market is a highly efficient machine you are lying to yourself and all the viewers.
Its been proven to not be efficient and is obvious. Efficiency would equate extremely low volatility. The stock market is real companies with a nonstop leveraged casino on top. It's as human as it gets. And many times during bull market it quickly shifts towards last fool standing mode.
Currently, hiring an investment advisor is the best way to invest in the stock market. I invested in stocks on my own without much success until my wife introduced me to an advisor. This year, I have increased my capital by more than 50%
The question is why. What is this going to achieve? Why does this building really matter it'll be another soulless lump of glass shot ever higher into the sky... 🤔
@HOSTLINE-JamesShack hi James haha. This is a massive copy and paste error! I'm a big fan on the B1M construction channel and this comment was in relation to another glass sky scraper being built. Apologies!
@HOSTLINE-JamesShack what's the private coaching programme?
It's a lie!
There is also the opportunity cost of learning about all of this stuff. I prize my free time more highly than that.
* unsuccessful spelling :)
First (genuine) comment!
:)
Great video.. points resonated with me!!!
Typo with “successful” at the start James