Session 18 – Markets Not At New Highs

Session 18 - Markets Not At New Highs

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Markets NOT at new highs – Resources highlighted in the episode

Today, we discuss the three quotes from mainstream media about markets hitting new highs and why that is not true. We also discuss why, even if markets were at new highs, you really shouldn’t care less. The podcast is broken down into the following sections:

  • Quotes of the Week
    • “The FTSE 100 climbed to 7090 on Friday – a new high” (Moneyweek – 13/04/2015)
    • “Shares in Britain’s top companies pass high set at height of dotcom boom” (Guardian – 24/02/2015)
    • “FTSE 100 soared to a record high today, beating its previous life-time high set on 30 December 1999, at the height of the dotcom boom” (Daily Mail – 24/02/2015)
  • Why This Is Misleading
    • Inflation adjusted highs mean that the market is currently between 35% and 70% behind inflation adjusted highs, depending on what measure you use for inflation.
  • Why You Shouldn’t Care
    • Buy low, sell high doesn’t work. Our scenario (see attached spreadsheet below) shows that you would be £5,500 worse off investing £5k in 1984 using a buy low, sell high scenario compared to investing for the long term:
      Market not at new highs scenario (Excel Spreadsheet)
  • Good Feel Article Of The Week

 

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In this episode, we refer to a number of external resources, all of which are linked below:

Related Article: Is It Dangerous To Invest In The FTSE Right Now (Moneystepper)

Related Article: Can You Predict Future Stock Market Performance (Moneystepper)

Related Article: Ignore The Best Performing Shares (Moneystepper)

Related Article: Why Passive Investing Is Better Than Active Investing (Moneystepper)

Related Article: Should I Try To Beat The Market? NO! (Moneystepper)

Related Article: Can You Time The Market? (Moneystepper)

 

If you have any questions or opinions on this episode, please leave a comment below. I respond to all comments and it would be great to hear from you!

 

 

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