Stock market is overbought. Too late to invest

FetteredChinos

Veteren member
3,897 40
If you dont want to "lose" again, then you are in the wrong place old chap, if you cannot accept the risk associated with non-cash investments, then you should stick to your savings account and leave it there.

and if you are an investor, and by definition holding LONGGGGGGG term, how did you er "lose" before.. did you by any chance sell at the market low last march? if so, not a great idea....even by my standards lol

try to take a more contrarian view. buy when no-one wants to buy, sell when everyone says you can't lose...


the fact that people are saying that we are overbought, need a correction, etc and have been for ages probably fuels the fires that we may be still in for further rises, at least until the Big Boys of the market have lightened the wallets of the retail investors a bit more..

now, who fancys a punt on house-price futures :LOL:

FC


FC
 

TheBramble

Legendary member
8,394 1,170
Pepper, from your post I'm assuming you're not currently invested in the market.

If you wish to remain a long-term investor then you can chose when and if you go (back) in.

Truth is - there is no such thing as overbought or oversold in absolute terms.

Sticking my neck out I'd say if you were planning to invest with a view to very long-term growth, now isn't any worse than any other time in the next 55 years or so.

Alternatively, if you want to be a little more creative and have a lot more fun with your capital - check out the other forums here at t2w.

I don't think we've got too many investors...
 

jsd

Active member
232 3
the dow certainly seems to of hit major resistance at 10700, look at a weekly chart you'll see it from may 2001, feb 02, jan 04, so a pull back from theses levels seems likely for now, how far back ? well looking at the weekly chart again i see 9000 as perhaps support , which would also be appx. 50% retrace from its recent 3000 point advance, the fundamentals of expected earnings are already in the price and i feel the markets gone far enough. expected second/third quarter earnings this year will maybe provide the bounce back up or continuation of downtrend.

if your hesitant maybe you should invest in trust funds on a monthly basis at least you'll be able to pound cost average in the event of a retrace..

jd
 

FetteredChinos

Veteren member
3,897 40
if your hesitant maybe you should invest in trust funds on a monthly basis at least you'll be able to pound cost average in the event of a retrace..

aha yes, i remember hearing this wise advice before. if i may tell you a yarn...it was 1999 i had just left uni and had started wearing full length trousers, had started my career and was regularly putting a fair old whack into my ISA with a monthly plan.

How i whooped with delight when a couple of years later i looked at my ISA statements and saw that despite the fantastic advice spouted by IFA's, my "savings" had dwindled to about 2/3rd of their original value.. and i think i was one of the lucky ones as i decided to heed the advice i read on the Fool and plumped for a fat, juicy index tracker.. those were the days....(incidentally still got it on the go, and miraculously i think im ahead on it now over the past 4 years.....)

basically, if i was to do it again, i would have spent the money i initially invested and used it to learn to trade there and then, rather than learn the hard way in a bear market.

if you want long term-investment advice, that is probably all i can offer you..

take £5k of your savings and see if you can trade by trading for real. if you can, then do it and that £5k will seem so insignificant. if you cant, uninstall from your PC everything to do with trading to prevent temptation and chain yourself to your ISA certificates in a dark room and wait for your day to come. trading amplifies results - losses can be huge, gains amazing...

hmm, yet another cryptic answer from me..

must be hungry.

time for lunch

FC
 

jsd

Active member
232 3
Hmmmm pound cost averaging is ok as long as you see any pullback as a temporary thing and again depends on an individuals age and investment objectives as someone leaving uni then i would of thought 20-30 year plan would be ok, but someone maybe 40-50 hmmm in this day and age not too sure if investments will be what they used to be, not with stocks anyway, maybe commodities will be a wiser bet.

Anyway again the fund manager is the important aspect of picking trust funds, someones whose investment principles you agree with rather than index monkeys. why would an index manager care if the index went up or down ?

jd
 

Pepper

Junior member
10 0
FetteredChinos said:
If you dont want to "lose" again, then you are in the wrong place old chap, if you cannot accept the risk associated with non-cash investments, then you should stick to your savings account and leave it there.

and if you are an investor, and by definition holding LONGGGGGGG term, how did you er "lose" before.. did you by any chance sell at the market low last march? if so, not a great idea....even by my standards lol

try to take a more contrarian view. buy when no-one wants to buy, sell when everyone says you can't lose...

the fact that people are saying that we are overbought, need a correction, etc and have been for ages probably fuels the fires that we may be still in for further rises, at least until the Big Boys of the market have lightened the wallets of the retail investors a bit more..
now, who fancys a punt on house-price futures :LOL:
FC

I'm a trader and I can accept the risk. Saving account is not for me.
I just wanted to know your opinion about stock market condition.
 

mully

Established member
967 3
I can only quote the following:

Ninety percent of the time an "investment" is a "trade" that didn't work.
 

FetteredChinos

Veteren member
3,897 40
ok Pepper i understand...

so in that case, if you are a trader (contrary to what you put in your first post on this thread :rolleyes: ) and think the market is overbought, then why are you not shorting it with loos-ish stops??

in the short/medium terms its gonna take some pretty good news to get us above, and indeed stay above 10700-10800. could be retesting into the 10300s soon

also, if you lost money in 2001 in what was pretty much a one-way trip south, it implies that you were buying and holding throughout that period..

this doesn't correlate to my interpretation of "trader". im sure im not alone in thinking in this way

as regards, overbought, and oversold. it all depends on what we are relative too. relative to 3 days ago, we could be oversold and due a rise. relative to 6 months ago we could be overbought and due a correction.

basically mate, in a nutshell, trade what you see in the charts/fundamentals/tea leaves/auntie maud's underwear , not what anyone/any website tells you.. that way, you only have yourself to hold accountable, and when things go wrong, instead of following the standard human reaction of seeking someone to blame, you will take stock of yourself and your methods to try to ensure that it doesnt happen again (at least in the same way!)

hope this helps

FC
 

TheBramble

Legendary member
8,394 1,170
Pepper said:
I'm not a trader. I'm investor.

Make up your mind Pepper - which are you?

You posted elsewhere about having a broker account (which you didn't recommend).

So, what's your point?
 

Pepper

Junior member
10 0
nomish said:
A stock price is what people are willing to pay for it at that moment in in time.

Its all supply and demand. Things are looking better recently and demand has increased and the price of many stocks have risen.

In terms of the CAPM, read this site below and you will see what i mean:

http://www.sherlockinvesting.com/articles/capm.htm

CAPM is the model that was used in this article. They say that stock price increased too much.
 

nomish

Junior member
42 0
Yea, but it sums up the CAPM as a load of crap.

Honestly speaking. who here uses the CAMP as a idea of what stock to buy or sell?
 

madasafish

Well-known member
470 5
the market is overbought.. maybe but not all shares are.

UK small caps have had a tremendous run since 2003 but many are still seriously undervalued.. and there are many real growth stories around.

I've had gains of 70%+ in 6 weeks in 3-4 stocks this year and lots more to come.

Of course you must know when to take profits and when to let them run..
 

Pepper

Junior member
10 0
nomish said:
Yea, but it sums up the CAPM as a load of crap.

Honestly speaking. who here uses the CAMP as a idea of what stock to buy or sell?


I'm not so sure that CAPM is a crap. You have to know how to use it. It really helps to estimate when market is oversold or overbought.
 
 
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