Diary of a Dumb Investor: dear FTSE, please fall below 5,000

I've done a lot of buying in dips this year, particularly during August, September and October. I now have some more cash waiting to move into equities, so another crash below 5000 (or even, in my dreams, 4000!) would be very welcome.

At the beginning of this series I commented that, in these uncertain times, steps should be taken to protect some of the money DI had acquired. I suggested Absolute Return Funds in particular Newton Real Return and I may have also raised the prospect of buying Artemis Strategic Assets. Admitedly these funds are not for everyone but since this column has been in existence the performance (or lack of it) has been markedly better than the DI Portfolio. Your response was along the lines of ..........."I might be a Dumb Investor but I'm not an absolute idiot." Now you must be getting desperate if you think that a slump in the FTSE is your only way to recover your losses.

Happy Christmas and let's hope the FTSE recovers next year.

1. It is unrealistic to expect the remaining 20% of your portfolio (cash) to make up for a 17% fall in the other shares you have bought (80%). In fact there's only at best a 50:50 chance that you'd make any profit with what remains!

2. From what I've seen, the absolute funds such as Newton simply lose money at a lesser rate than other funds - they still seem to disappoint on their basic aim of making a return in all market conditions.

bugger off! DI I remain fully invested

@Muffeiy In the past I've always found the last week before christmas to be quite robust, with thin trade. So I wouldn't expect the FTSE to go down anytime soon. Maybe 2012 will be a 'sell in May' year again - meantime Dumb Investor you could look for some christmas bargain stocks now.

If Anthony Bolton of FIDELITY INVESTMENTS FAME can launch a fund at precisely the wrong time and lose his thousands of customers something like 34%, and to be so confident of the Chinese Markets of which he was ignorant, then what hope have we mere mortals? What faith can there be in 'experts' ? I have gone with the rest with this investment and, according to those who REALLY understand China it will be years before even getting back to the starting point. My investment with that lot was £10,000 perhaps foolishly I am keeping the remnants.

post script: I prefer to stick with sound businesses offering good dividends and strategic industries (mining, oil and its 'picks and shovels suppliers') and phones, pharma, fags and the like and stay put, gambling with the future is not for me, but then I'm a silly old sod.

I note that the shares in your portfolio that have gone down the most are "Lloyds Ordinary 10p".

With sovereign debt growing by the day, I suspect they will indeed reach 10p before long.

Best work out a plan for that day, I think

Lots of investment trusts have fallen further than the wider market as discounts have increased the last few weeks. Since my core holdings are in investment trusts I find it a bit depressing that many of these shares are lower now than when the FTSE was recently below 5000. It should be a good sector to invest for the recovery, whenever that comes.

Why did you sell low, thus realising a loss?

We all have opinions. George Soros says that Gold is the ultimate bubble! Warren Buffet says gold has no tangible value. I might be wrong but so will the best investing minds of the past century.

Gold is another theme that goes up for a decade but not because it does anything. It goes up because it is going up (Bubble). It happens all the time (1993 emerging markets, 2000 Internet shares, 2007 commercial property and do not forget Gold in the 80’s these were bubbles that were burst).

I am not saying the crash will happen tomorrow but at least tell people the history of gold in the 80’s it fell to a quarter of its value in just a few years, now that is a proper crash. Gold can be dumped as quickly as the insane are buying it at these levels. Over the last hundred years gold has not even kept up with inflation!

Go to an antiques auction and buy something beautiful as well as valuable, with the cash. That's certainly what I should have done ten years ago!

I have bought emerging markets, commodities and europe this week.

I have sold nothing in the last 3 months.

I do not care what the experts (noise) say I would rather rely on my own knowledge and experience.

DI learn from your own mistakes and act accordingly.

DI, you may be right ("I want the FTSE 100 to fall below 5,000 – by a lot, preferably"), but it is going to take time to get there.

I have told you almost at the outset of your "adventure" that the market was too high and I still think it is too high.

Spotdog has a point, but for the moment I think that Aviva is still too high. Strange for me to say that, because I originally bought Aviva at just over £6, then £4 and then lower, as low as £2.72.

Being an insurer, it is exposed to the value of shares in the market and perhaps lower incomes so I personally have set a target of £2.50 before I consider buying more. And yes I am sitting on the tidy loss for them at the moment, if I sell. In the meantime, as spotdog, says I am enjoying the income.

As regards Vodafone, it is higher than it's been for a while, but still off its historic highs. Another one of my dogs!

As regards Lloyds and Afren, sit on them, with time they are more than likely to improve. That is what I am doing, and my 'losses' on Lloyds more than exceed your entire portfolo, as do Aviva, just about.

I'm with an elder one (both posts, especially his last comment!), remaining fully invested, principally in the market, as opposed to funds. Now is not the time to go into the market because the euro saga has a way to go and there will be a lot more lows from 'them' not making decisions. Overall, my portfolio remains in profit from the original prices paid for the various shares, albeit down some 40% from the highs over the last year or so, ie some higher and some lower but averaged out, higher. Dividend wise, I am doing better than last year, and likely to do better, even with the special dividend paid by International Power, which is another share you should watch. It is unlikely to be a star, just another dull stock, but it is in a sector where its product is in increasing demand, and providing something that is going to be in short supply. Highish at the moment.

The biggest 'losses' are in the financial sector, and that is likely to continue whilst the bigger countries fail to take measures to properly address their almost out of control borrowings.

As an aside, the banks etc were not correct in their strategies, but the main fault lies with the politicians, eager to rake in taxes to cover their increasing borrowings and failing to heed the warnings given. Who did they borrow from?

Yep, the bankers!

As for Simon Olley re Lloyds, not impossible, but I do not see it.

Be patient. Likely that the markets will be quieter for the next couple of weeks, but watch for fireworks in the new year.

Hey Guys - Invest in US shares with lots of cash on balance sheet and play on a near 3% GDP growth plus dollar strength. Apart from our banks which are taking a hit and some what undervalued - mark of the times - the FT 100 constituents are not solely dependent on UK growth. We have what the Europeans can only dream off - a printing machine, so our gilts will hopefully remain low whilst Sarkozy and his big boss have led Europe to near 7% borrowing costs. Get your bulldog spirit resurrected & remain invested.

FTSE has been below 5,000 - why didn't you buy at the time?

Be careful what you wish for. A break below 5000 could well spell disaster.

Reading last years tea leaves it seems to me that there will not be much resistance all the way down to 4100. And if that doesn't hold we could be back at 3500 in no time at all. So for me - I'm rather hopeful the FTse 100 keeps well above 5000. Short term we are all riding the euro.

So uncharacteristically I splutter - ''vive la France''.

This tax year, I'll probably end up having rolled a total of £200k from cash into equities, with most of this already having been done during Aug to Oct - is that bold enough? Well, I do hope so, because it seriously scares me!

The last time I was this bold was in early 2009, and that worked out well, so what could possibly go wrong ...

What's wrong with 3500? We can all fill our boots and reap the dividends.

Market drops on fundamentals are a cause for concern. Market drops on panics are an opportunity for cool heads.

Wait for 3000 or less. 2012 is likely to be even more "eventful" than 2011. Shouldn't be too long: only then can true value be restored in equities - slowly so as to also restore stability - only then and hopefully stepping over the charred and still smouldering corpses of the speculators we can invest again. However I've had a bad day and probably need a whisky and a little lie down...

#Reckoner

However I've had a bad day and probably need a whisky and a little lie down...

Hopefully one of Diageo's brands bought in Sainsburys please!

I also hold Diageo and Sainsburys, both at a fat profit and with spiffy divis. I'm also about to pour a large whisky ...

Actually, I *AM* Spartacus !!!

Good shot of whisky and Baileys, or the store equivalent, HIC!