Biggest Money Mistake 2014

Published / Last Updated on 18/12/2014

Biggest Money Mistake 2014Biggest Money Mistake 2014.

Buy Low Sell High – Some People are Not Proactive with Fund Switching – The Biggest Financial Mistake of 2014.

Stock markets this year look like they will close lower than they were at the start of the year e.g. FTSE 100 was at 6,749 on 31 December 2014.  However, the markets have been volatile with so many buy and sell points.

Looking at the potential growth FTSE 100 alone for 2014 so far.

31st Dec 14  = 6,749.  Time to sell, lock in profit and protect from market falls.

5th Feb = 6,457.  Time to buy back into the market.

24th Feb = 6,856.  Time to sell, lock in profit. Growth of 6.17%.

24th Mar = 6,520.  Time to buy back in market.

14th May = 6,878.  Time to sell, lock in profit. Growth of 5.49%.

8th Aug = 6,567. Time buy back into market.

4th Sep = 6,877. Time to sell, lock in profit.  Growth of 4.72%.

16th Oct = 6,195. Time to buy back in market.

21st Nov = 6,750. Time to sell, lock in profit.  Growth of 8.95%.

15th Dec = 6,182. Time to buy back in market – this is another buying opportunity happening right now.

We call the process  ”Ida y Vuelta” (Spanish for ‘back and forth’ or ‘there and back’)

So over the year, using the above simple online switching methodology at trigger points, investors returned around 25% in a market that has fallen this year so far by around 7%. 

Over the year, investors who have taken no action have, as at today, achieved no growth.  If they are UK tracker investors, they have lost money.   

A proactive approach by switching  ‘cash park’ to equity to switch back regularly will present growth opportunities without the need to use highly geared, high risk, structured investments.   

We offer a Traffic Light Alerts Service for clients with Red, Amber and Green alerts, which is well received as people like the idea of proactive switching but keeping it simple.   

Whilst no person can call the markets exactly and get the exact bottom or top of the market right to the basis point, it is common sense to buy low, sell high and the biggest money mistake this year was to leave your money invested and let it ride the market rollercoaster, or indeed allow your financial adviser to be reactive rather than proactive with your funds. 

By being reactive, you will usually miss the boat.  When you see headlines of market highs or market lows, that is a simple warning message to take action.  Fortune favours the brave!

What not to do in 2015 – markets will be just as volatile.  Never ever forget, buy low, sell high!