FTSE100 index went no where since 1999!

peipei1

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https://www.bloomberg.com/amp/news/articles/2018-12-06/u-k-stocks-erase-21st-century-gains-amid-worst-day-since-brexit

Alarmist Bloomberg headlines!
Anyone worrying we may have a Trumpixt and cause America and China indices to stall for years?
Experts given their views growth is very much compressed during this bullrun started 2011, and next decade growth is paltry 4% pa..
 

OngHuatHuat

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I think 2019 and 2020 will be very tough for stock market, take note that margin interest rate is climbing up.
 

revhappy

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I think 2019 and 2020 will be very tough for stock market, take note that margin interest rate is climbing up.

Indeed. All leveraged strategies will start unwinding positions. 2019 and 2020 will be good years to DCA and accumulate.
 

OngHuatHuat

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Need to let market readjust before able to move up again. Patiently waiting and observing.

Indeed. All leveraged strategies will start unwinding positions. 2019 and 2020 will be good years to DCA and accumulate.
 

hindsight

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The pound is currently hovering near all time lows so if you adjust for currency devaluation, the FTSE100 looks far better than it really is. Foreign investors in UK stocks got absolutely killed in the last 2 decades.
 

BBCWatcher

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Fair enough, but you also have to adjust for reinvested dividends. The FTSE 100 stocks have paid a lot of dividends over the past 19 years, so they go on the plus side of the ledger.

And cost adjustments, since you cannot actually invest in the FTSE 100 directly and at zero cost. The costs go on the minus side of the ledger.

And virtually nobody has actually dumped X pounds into a FTSE 100 index fund 19 years ago and stood pat, with no intervening accumulation. It’s rather easy to end up on the plus side with pound cost averaging in a market that moves sideways but bounces around.

Thank goodness everyone has been at least reasonably globally diversified in their investing over that period, right?
 

limster

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FTSE100 ETF is one of my top holdings. My average buying price for my FTSE100 ETF is still higher than the current price (my £ I exchanged between 2.0 to 1.7 so I would say still breakeven or better in S$ terms) and furthermore, I've received 4%+ dividends yearly.

The ETF is currently still above £30.00. Under £30 I will buy buy buy, like STI ETF under $3.00 :s13:

I got no problems adding more as I like going UK for holiday and it might even be a possible retirement destination. I use IB transfer £ to my UK account and now can use my £ Visa paywave to pay for the tube and buses (i.e. can tap the visa paywave at the tube gantry) . even buses outside London accept Visa paywave. Really no need cash in UK anymore and I save on exchange rate premium because IB's forex rate is so good =:p
 

peipei1

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Does FTSE have withholding tax on dividend?
This index is performing like STI, give dividends is not too bad as passive income.
 

limster

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suddenly there are so many people who claim they can predict that
(1) the market will go down further
(2) when the downturn will end./ where the bottom is.

These super investors sure become millionaires or billionaires at the end of this cycle

Myself, I will just deploy my cash to buy a little bit each month, and also build up the warchest according to my target equities/bonds ratio... i don't know where the bottom is, but I know when stocks are on sale.....

:s13:
 

revhappy

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suddenly there are so many people who claim they can predict that
(1) the market will go down further
(2) when the downturn will end./ where the bottom is.

These super investors sure become millionaires or billionaires at the end of this cycle

Myself, I will just deploy my cash to buy a little bit each month, and also build up the warchest according to my target equities/bonds ratio... i don't know where the bottom is, but I know when stocks are on sale.....

:s13:

It is not very difficult to know when we have reached the top. Tell tale signs:
1) almost everyone you know is already fully invested and no more money left to invest.
2) most people entered recently near the top
3) people wish they were not fully invested.

People will not become millionaires because they are already trapped at higher levels and can now only hope and pray that the downside is limited and the downcycle finishes as fast as possible

Also people will now be trying to sell at every rise and get out before further losses. This is how most retail investors behave.
 

Shiny Things

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The FTSE throws off dividends like crazy. If you’d bought the FTSE 100 at the end of 1999 and reinvested your dividends, you’d be up 90% by now.

That’s about 3.5% a year. Not amazing, but not “zero”.
 

revhappy

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The FTSE throws off dividends like crazy. If you’d bought the FTSE 100 at the end of 1999 and reinvested your dividends, you’d be up 90% by now.

That’s about 3.5% a year. Not amazing, but not “zero”.

Yeah, Europe is like that, people prefer high dividend yield. Asians and Americans dont understand this. We are used to indices and stocks that go higher and higher and we dont consider dividend yield as a thing.
 

peipei1

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It is not very difficult to know when we have reached the top. Tell tale signs:
1) almost everyone you know is already fully invested and no more money left to invest.
2) most people entered recently near the top
3) people wish they were not fully invested.

People will not become millionaires because they are already trapped at higher levels and can now only hope and pray that the downside is limited and the downcycle finishes as fast as possible

Also people will now be trying to sell at every rise and get out before further losses. This is how most retail investors behave.

I feel this describes my feelings at this time. I shall not do accelerated Dca during peak bull run in future. 2017 every day reported index closed higher, drives the greed in us.
 

Shiny Things

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Yeah, Europe is like that, people prefer high dividend yield. Asians and Americans dont understand this. We are used to indices and stocks that go higher and higher and we dont consider dividend yield as a thing.

No. Dividend preference isn’t a uniquely European thing at all.

The STI has a dividend yield north of 3%; that’s within spitting distance of the FTSE 100. The ASX-200’s yield is even higher - north of 4% last time I checked.

And in America, high-dividend investing is a huge thing; the pile of high-yield energy MLPs that listed in the mid-2010s (and blew up in 2016-2017) relied on investors being horny for dividends. And the four biggest “dividend” ETFs listed in the USA have more than $80 billion in assets between them.
 
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limster

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I feel this describes my feelings at this time. I shall not do accelerated Dca during peak bull run in future. 2017 every day reported index closed higher, drives the greed in us.

i decelerated my DCA in 2017 =:p Because 2016 Brexit and STI below 3,000 were very good buying opportunities, and when you just bought things at a sale and then the sale is over and things go back to 'regular' price, you just don't feel like buying...


It is not very difficult to know when we have reached the top. Tell tale signs:

like that you can easily double your networth by shorting the market.... :s13:
 

limster

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STI 3,000: What's the plan?
I have always said in the forums that STI will eventually go back to 3,000. So if you buy STI ETF below $3.00, it is highly unlikely that you will lose money. You can also collect dividends while waiting for it to go back.

Now that STI has hit 3,000, we get the usual "will it go up or will it go down" debate with bulls and bears on either side. My strategy, as always, is just to hold on to my shares and collect dividends.

I have only bought STI ETF once when it was above $3.00. Most likely, I will adopt the same strategy this year. The fundamentals won't support STI going to 3,500. It could be a 'hot money' driven rally, but I want to see earnings growth as earnings pays for the dividends I collect.

At the same time, I am collecting monthly dividends of __ and also need to park my income somewhere. If I don't reinvest, what am I going to do with the money?

Most likely, I will still do small regular purchases of regional (multi-country) ETFs to reduce risk instead of single country ETFs like STI ETF. I can still get Singapore exposure by doing so as CPJ1 and VDPX both hold Singapore stocks and their expense ratio is lower than STI ETF.

Fortunately or unfortunately, I also have debt to pay off in the form of a car loan I took in 2015. The short story is that many car dealers offer packages where you have to take a car loan, so I took it. The silver lining is that because I had taken a loan, I had extra cash on hand when BREXIT arrived. This year, I will repay the car loan early instead of buying STI ETF. I did the same thing with my housing loan. Whenever STI was above 3,000, I did partial repayments of housing loan instead of buying STI ETF.

Finally, I have already said that I am not very good in investing in rising markets. I very much prefer buying after a crash. So I expect that this year will be a quieter investing year for me. In which case, I am not sure whether I can hit my target of increasing dividends from __. Will have to see.

quoted my 10 January 2017 post for reference. paid off my car loan in 2017. very useful to write down strategy plans for future reference.. for example, i had forgotten one of my reasons for decelerating DCA in 2017 was because i paid off my car loan...
 

BBCWatcher

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And the four biggest “dividend” ETFs listed in the USA have more than $80 billion in assets between them.
In fairness, there might be a little bit of tax bias in favor of dividends in the U.S. “It depends” as it always does, but allow me to explain relatively briefly.

Dividends are almost always “qualified” dividends, which means they qualify for the lower passive income tax rate (tops out at a marginal tax rate of 23.8% federally). Only long-term capital gains qualify for that lower tax rate. Also, if the passive income is streamed out continuously, then it generally helps a taxpayer keep his/her total income lower and thus pay less tax in the higher and highest tax brackets. A “big” long-term capital gain is a lumpy hunk of income that would push more income into the higher/highest tax bracket, quite often — although it is tax deferred since it’s only charged at the end, albeit without any inflation adjustment (the tax is assessed on nominal gains).

And if you think future income tax rates will be higher — a reasonable bet given that they’re too low right now — then you’d want to grab the money and run.

“Dividend stocks” also historically tended to be more conservative stocks, often the regulated monopolies such as the telephone company and utilities. I think there are still some older investors around who remember what their parents and grandparents did and why they did it. It was a way for retirees (mostly) to hold a few stocks that were more bond-like in their behaviors (albeit still stocks), back when bond choices weren’t great. There are probably also some small fund managers who want to show their clients that their investments are generating dividends since that looks better on paper to some people (including to some people in this forum) for psychological reasons if nothing else.

Fun fact: York Water (symbol YORW on the NASDAQ) is the publicly traded company in the United States that has been paying (and still is paying) a continuous, unbroken stream of dividends for the longest time. YORW is now in its third century of paying dividends — it started all the way back in 1816.
 
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