Click on the media player below to listen to Episode 67 of the MoneytotheMasses.com podcast
You can also subscribe to the show via iTunes
MoneytotheMasses.com Podcast show notes
Best time of the year to invest
Now, this piece actually came from some research I've carried out for 80-20 Investor members. 80-20 Investor is my DIY investment service that we run which can be accessed by going to home page and click on the red button, you will find out all the information there.
So does it really matter when you invest? Well September and October are typically very bad months for the stock market. October is apparently the worst month. If you go back in history and look at each October as an isolated period of time, the stock market has done worse in October typically than any other month of the year.
There are a whole host of reasons we could try and guess as to why that is. Some of it might be just the time of year where people have come back from holidays and aren't quite ready to invest. That doesn't really help DIY investors, because if you think about it, the month to month variations in stock market movements are great if you're buying individual shares. But what about if you're buying investment funds, which is what most of us will do? So we're investing for at least five years, and you'll hear me regularly say on the podcast, "You shouldn't invest money unless you have a five year window in which you do not need access to that capital." So what I decided to do was look at the FTSE, look at 8,000 trading days, every trading day back to 1984 when the FTSE 100 launched, and thought, "Do you know what? What would happen if somebody had picked any given day during that period, and then invested for five years. How much money would they have made?"
Now, you can just imagine the calculations that went into this. But then I thought, can we take this one stage further, is there a particular day there for the given year, say the 1st of April or whatever, that is historically the best day to invest?" So I went through, did all the analysis, and I came up with the best and worst days of the year. But I was also able to come up with the best months, I was also able to come up with the best period of time within the year. And I'm not going to give you the nuts and bolts of the research, but for podcast listeners I will give you one overriding trend which you can take away and hopefully increase the profitability of your investing.
There's a general trend that if you invest between December and March, you're likely to be far more profitable than if you invest in the autumn. The autumn is the worst time, so I'm talking from September through to November, that is the worst time in profitability terms to invest your money. When you look at it logically, that kind of makes sense because my reasoning as to why this trend occurred after analysing all these thousands of trading days on the FTSE 100 is because there's an uptick in people looking to invest for their stocks and shares ISAs in the new year.
Therefore there's an increase in demand, then there's a general increase in prices, because obviously demand and supply make stock markets move up and down. You might not see that individually on any given year, but if you take it over say 20 or 30 years, you can see that, yes, there is a general trend towards the start of the year. So, from all this free snippet that I'm giving to podcast listeners is, if you're going to invest, it is better to invest in the New Year, up until the end of the tax year. If you just want to increase your chances of making more money then generally avoid the autumn.
If you are going to have any work done on your house, particularly a loft conversion or an extension, tell your home insurance company, because you could actually invalidate your insurance and wouldn't be able to make a claim if something went wrong.
Now, I'll give you an example, for me, I was having my loft done. What you need to do, if you're having scaffolding put up, ring your insurance company and tell them because obviously it increases the chances of burglary, and quite often they won't increase your premium just because you've got scaffolding up but it will mean they will pay out in case somebody does decide to climb up it and break in.
But the other thing is, tell them when you're having the work done, and when the estimated date of completion is. Because they are obviously worried that you're going to have parts of your walls or roof open, and again, increase the chance of burglary. Then once the project's finished give your home insurance company a quick ring and tell them. Because now your house is bigger, so you've got an extra room or bigger space, and they normally work home insurance premiums based on the number of bedrooms.
So if you've gained a bedroom, your home insurance is going to go up. So make sure you tell them, because if you don’t then it could actually invalidate your policy should your house burn down. Obviously, during the building process, your builder had insurance that would probably cover you in case whatever he did suddenly caused a fire and it burnt your house down. So, give your home insurance company a quick ring if you're having some building work done, and make sure you give them an update once the work has been completed.
Sell your house for free
There is a company called PurpleBricks, they claim to be the U.K.'s number one online estate agent. And they are unlike High Street estate agents, they enable you to put your house on the market and effectively sell your house without an estate agent, and that means it's a lot cheaper. Now, the estate agency world is getting very worried about companies like these stealing or capturing a big portion of the market, and they are actually about to float on the stock exchange, which just shows you the ambition of this company and others like it.
One or two of the biggest estate agents are so worried about the PurpleBricks encroaching and stealing a march on them that if a potential seller happens to mention they're thinking of using PurpleBricks, some estate agents will sell that house for nothing, they're not going to take a fee, and that's incredible.
The reason they're doing it is they're trying to crush PurpleBricks out of the market. So, my tip is, even if you do not plan to use PurpleBricks tell the high street agent that you are in order to get a discount on their fees. Because don't get me wrong, PurpleBricks and online agencies are fine, but if you listen to some of the podcasts we've done with Liam, our property expert, there are drawbacks because you have to do a lot of the work yourself, and work the chain yourself, whereas an estate agent in the High Street with local knowledge can be fantastic, as long as you get a good one.
But my tip is, if you are going to go to an estate agent, get them to come round, and if you're going to potentially sell with them, then have a look at PurpleBricks by all means, but just tell them they're up against the online agent, and then you can get a cheaper deal or they may even sell your property for free.
There's a nice little add-on to a browser called Firefox. Now we have different browsers, don't we? Safari, Google Chrome, Internet Explorer. But there is one called Firefox, and it's free to download, the reason I mention it, because there's an add-on, like a download, that works in the tool bar of this particular browser called Property-Bee.
Now, if you go to property-bee.com you will see there's a download that works on the Rightmove website. So what happens, you download this little add-on in your tool bar. When you next go to Rightmove and you start surfing around, this fantastic little add-on can actually tell you historic changes to any listing. So it means you can see the changes that they've had in terms of wording, but more importantly in terms of price. And so you can now see that the houses that you've just viewed or you want to buy have been cutting their price or how long they've been on the market which is great information to go in there and negotiate with.
You can see that they're desperate to sell if they're cutting the price, or it's been on for a very long time. So, go and download the Property Bee add-on, even if you're just browsing about, you'll probably find you're going to start surfing the Rightmove website in a slightly addicted fashion just to notice the changes. But it's a great little add-on. Go and try it, and as I say, you can see any changes to property prices, and even when it was put on the market.
Taking your complaint to the CEO
If you've ever had a complaint that you feel is never being taken seriously, you sometimes hear stories of somebody who contacted the CEO, or the top person within a company, and as a result their complaint got dealt with far quicker. Now, it's always the case, isn't it, that if you've got a complaint you need to go higher and higher and higher up the chain if you're getting nowhere. And it's one of those things, you actually want to get to the person who's actually got the power to say, "Yes."
The people at the bottom who will often just say, "No." They're not the people you need to be directing your complaints to if you're getting nowhere. One thing, it's sometimes hard to find details of the more senior people within a company. How do you get hold of that CEO and contact them? Well, there is a great site out there, called ceoemail.com. Go and have a look at it. It's a very basic site, and what it does is just lists the email addresses or contact details of every CEO out there, and you can just search for the one you need. So, if you're grumpy with British Gas, go and put in British Gas and you will get the email address, and the phone number, of the CEO of British Gas. Fire them an email, they are in charge of their companies, don't feel bad about doing it. Send them an email and you might just get your complaint resolved far quicker, and if you don't, then well, it's going to be a fantastic opportunity for a bad piece of PR against the company who has upset you.
So that's it for this week.
Don't forget to claim your free copy of Damian's best-selling book, "The 30 day Money Plan." Sort out your finances in just five minutes a day. Worth £4.99. Just go to moneytothemasses.com/podcast to find out how.