unit trusts : Lump sum

[Hanks]

Hi,

Noob question.I would like to put down a large lump sum into my unit trust , however i need to time it right when the market is down.Now how do i actually tell when the market is down , what data/grahs should i be looking at.

Thanks

 

[Chevron]

Hi,

Noob question.I would like to put down a large lump sum into my unit trust , however i need to time it right when the market is down.Now how do i actually tell when the market is down , what data/grahs should i be looking at.

Thanks

You need to contact a broker. Not a random group of people on the internet.

 

[borga]

It is time in the market, not timing the market.

Possible graphs you could use is the unit trust price vs a 10/30 day average marker, and it the share price drop below the rolling average then it signals that it is cheaper (or just crashing), there is many other graph but I don't know much about them/used them.

Few if any time the market correctly, mostly just luck, so it might be better to spread your investment over a few payment to average the cost.

 

[Spies69]

If you're worried about the timing, a lot of the unit trusts offer a phase-in where the lump sum is deposited into a money market account and phased (switched) into an equity (or other) fund of your choice over a period of 3, 6, 9 or 12 months.

No one knows when the market is low or high and anything can happen any day/week/month/year.

 

[dunkyd]

What you might save in timing will be offset by broker fees.
Stick it in the top 5 funds run by Alan Gray and get on with living. Have a squizz at the growth monthly......

 

[supersunbird]

If you're worried about the timing, a lot of the unit trusts offer a phase-in where the lump sum is deposited into a money market account and phased (switched) into an equity (or other) fund of your choice over a period of 3, 6, 9 or 12 months.

No one knows when the market is low or high and anything can happen any day/week/month/year.

This!

If it is really large enough then phase is in. R10 000 per month for 6 months if its R60 000 say, or R20 000 per month over 12 months if its say R240 000 for example. You put it in the money market of the provider as said. Its called cost averaging.

 

[Jola]

What you might save in timing will be offset by broker fees.
Stick it in the top 5 funds run by Alan Gray and get on with living. Have a squizz at the growth monthly......

That ^

Worst advice that I ever had was from brokers.

 

[Cage Rattler]

I've never bothered with averaging as that is also timing the market - one is just delaying the risk taking.

For example, "we compare the historical performance of dollar-cost averaging (DCA) with lump-sum investing (LSI) across three markets: the United States, the United Kingdom, and Australia. On average, we find that an LSI approach has outperformed a DCA approach approximately two-thirds of the time, even when results are adjusted for the higher volatility of a stock/bond portfolio versus cash investments. This finding is consistent with the fact that the returns of stocks and bonds exceeded that of cash over our study period in each of these markets."