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Do you ever feel “the curse” of investing at exactly the wrong point? Like your investing is too late, at the wrong time, or maybe that you’re just unlucky?
Well meet Bob – the World’s Worst Market Timer. Bob began his working career in 1970 at age 22 and was a diligent saver and planner.
His plan was to save $2,000 a year during the 1970’s, then increase his savings by $2,000 each decade. In other words $2,000/year in the 70’s, $4,000/yr in the 80’s, $6,000/year in the 90’s… you get the picture.
Bob started in 1970 with $2,000, added $2,000 in ’71 and ’72, then decided to take the plunge and invest in the S&P 500 at the end of 1972. (Time out: there were no index funds in 1972, but come along with me for illustration purposes).
Now in 1973 – 74, the S&P dropped by nearly 50%. Bob had invested his life savings at the peak, just before it fell in half! Bob was bummed, but Bob had a plan and he was sticking to it. You see Bob never sold his shares. He didn’t want to be wrong twice by investing at the peak and then selling when prices were low. Smart move Bob!
So Bob kept saving $2k/year in the 70’s and then $4k/yr in the 80’s. But he was feeling the sting of his last investment and did not feel comfortable adding to his fund until he had seen the markets rise a fair amount. In August of 1987 Bob decided to put 15 years of his savings to work. Seriously Bob?
This time the market fell more than 30% right after Bob invested. Bob, amazed at his investing prowess, did not sell.
After the 1987 crash, Bob was really planning to wait it out. In the late 1990s everything was on fire. The internet was unbelievable new technology and stocks were flying high. By 1999 Bob had accumulated $68,000 from saving each year. A firm believer that the Y2K bug was boloney, Bob invested his cash in December 1999 just before a 50% decline that lasted until 2002.
The next buy decision in October 2007 would be one more big investment before he would retire. He had saved up $64,000 since 2000, deciding to invest this right before the financial crisis that saw Bob experience another 50% decline. Monkey’s throwing darts were probably better at investing than Bob.
Distraught and disheartened, Bob continued to save each year and accumulated another $40k. He kept his investments in the market until he retired at the end of 2013.
So let’s recap: Bob is definitely has “bad timing”, only investing at market peaks just before severe market declines. Here are the purchase dates, subsequent declines and the amounts Bob invested:
Fortunately Bob was a good saver, and actually a good investor. You see once he made his investment he considered it to be a long-term commitment and never sold his shares. Even the Bear Market of the 70’s, Black Monday in 1987, the Tech Bubble or the Financial Crisis did not cause him to sell or “get out” of the market.
He never sold a single share. So how did he do?
Bob almost fell out of his chair when his advisor told him he was a millionaire! Even though Bob made every single investment at the peak, he still ended up with $1.1M! How you might ask? Bob actually had what we would call “Good Investor Behavior”.
First, Bob was a diligent and consistent saver. He never waivered from his savings plan (recall $2k/year in the 70’s, $4k in the 80’s, $6k in the 90’s, $8k in the 2000’s, $10k in the 2010’s until his retirement in 2013 at age 65).
Second, Bob allowed his investments to compound through the decades, never selling out of the market over his +40 years of investing – his working career.
During that time Bob endured tremendous psychological toil from seeing huge losses accumulate right after he made each investment. But Bob had a long-term perspective and was willing to stick with his savings and investment plan – even if his timing was “a bit off”. He saved and kept his head down.
Certainly you realize Bob is an illustration. We would never advise only investing in a single strategy, let alone a single investment like an index fund. If Bob had invested systematically, the same amount each month, increasing his savings like he did he would have ended up with even more money, (over $2.3M) – but that would not have been Bob, the Worlds Worst Market Timer.
So what are the lessons?
If you are going to invest, invest with an optimistic outlook. Long-Term thinking often rewards the optimist. Unless you think the world is coming to an end, optimists are typically rewarded.
Temporary, short-term losses are part of the deal when you invest. How you react to those losses will be one of the biggest determinants of your investment performance.
The biggest factor in investment success is savings. How much you save, and how methodically you save has a much bigger impact than investment return. Get these three things right along with a disciplined investment strategy and you should do well. Even Bob did well. Nice work Bob.
Buy a tracker, add funds when you can, when nearing retirement have a cash fund in case the market crashes before you start to spend your hard earned.
This article provides a detailed perspective on planning for a comfortable retirement through passive income. It’s interesting how the author emphasizes the importance of tailoring retirement goals based on individual circumstances. The breakdown of income requirements for single and two-person households is quite eye-opening, especially the £43,900 figure for a single person. I wonder, though, how realistic it is for the average person to achieve such a high passive income through investments alone. The author’s strategy of investing in global stocks and maintaining a cash reserve seems balanced, but what about those who may not have the knowledge or confidence to invest in shares? Could there be simpler, less risky alternatives for people who are not as financially savvy? Also, how much of this plan relies on market stability, and what happens if the returns don’t meet expectations? It’s a thought-provoking read, but I’d love to hear more about how to mitigate risks for those who are just starting their retirement planning journey. What would you suggest for someone who’s hesitant to dive into the stock market?
If you buy a world tracker fund, as long as you can choose when to sell you will not lose money, it could be several years though, so if you are saving for a specific reason, like a deposit for a car or a house etc., compound your interest where cash is king.
You may have missed your window on this infrastructure trust’s share price
As the discount narrows to a fairer price, the potential upside has dwindled Markuz Jaffe
29 May 2025
Questor is The Telegraph’s stock-picking column, helping you decode the markets and offering insights on where to invest.
Investors after stable, inflation-linked returns backed by high quality counterparties could do worse than infrastructure. Sub-sectors of the asset class span social infrastructure, such as hospitals and schools, and more economically sensitive investments, such as power generation and transport.
More recently, the significant expansion in digital infrastructure, including data centres, towers and fibre, has captured headlines, driven by the explosion in data consumption globally.
One such access point is Pantheon Infrastructure (PINT), launched in late 2021 with the aim of offering a globally diversified portfolio of high-quality infrastructure assets, co-investing alongside leading private equity houses via individual deals selected by PINT’s manager. Since launch, the company has committed over £500m of investor capital across 13 investments.
PINT’s investment manager, Pantheon, has over 40 years of private markets investing experience, a global investment team and $71bn in discretionary assets under management across real assets, private equity and private credit, as at end-September 2024. This includes $23bn across over 230 private infrastructure investments, of which $4.5bn is invested across 56 private infrastructure co-investments – a significant resource benefitting PINT, despite the trust’s own modest size.
The portfolio is well diversified by sector, with almost half in digital infrastructure, a third in power and utilities and a quarter spread across renewables and energy efficiency, and transport and logistics.
It invests across Europe, North America and the UK, and enjoys a blend of revenue profiles – with the vast majority contracted, supported by almost a fifth in GDP-linked and regulated incomes. To further spread risk, the company makes use of an active currency hedging programme to help reduce portfolio valuation fluctuations due to FX movements.
PINT’s top investments by value highlight this diversification: Calpine, a principally gas-fired US independent power producer; Fudura, a Dutch provider of electricity infrastructure; Primafrio, a European temperature-controlled transportation and logistics firm; National Broadband Ireland, a network developer and operator for the nation; and National Gas, owner and operator of the UK’s sole gas transmission network.
Of these holdings, the most immediately attractive is Calpine, which is set to be bought by Constellation Energy Corporation (CEG). The deal, expected to complete later this year, will grant PINT a mix of CEG shares and cash, split 75pc and 25pc, respectively. While this has introduced some volatility into PINT’s portfolio valuation – the share price of CEG has ranged from a peak of around $350 to a low of $170 in 2025 alone – it also represents PINT’s first disposal, and a potentially significant exit from one of its top performing investments to date.
PINT targets a net asset value (Nav) total return of 8-10pc per annum, and declared dividends of 4.2p for FY24. Although dividend cover was relatively low for the year (0.7x), the manager expects this to improve as portfolio distributions continue to increase.
PINT’s method of accessing these deals via co-investing is a differentiator from peers and provides investors with a fee-efficient exposure to a basket of quality companies that stand to benefit from secular trends of digitisation, decarbonisation and deglobalisation. PINT itself charges a modest 1pc per annum management fee on the first £750m of net assets, with no performance or transaction fees. Additionally, the portfolio’s weighted average discount rate of 13.6pc as at end-December 2024 highlights the high level of return that the underlying businesses are expected to achieve based on their valuation modelling.
The company has a conservative balance sheet, with no debt drawn at the trust level. PINT’s £115m revolving credit facility provides liquidity but was undrawn at yearend and, combined with £24m in cash against outstanding investment commitments of £19m, marks a robust position for this strategy.
Currently a yield around 4% and the price up 20% since the start of the year, so currently not of interest for the Snowball
Most investors approach dividend paying stocks backward.
Here’s how it usually works …
An investor will scan the markets looking for stocks paying a high dividend. After all, if a company is currently paying a high yield, it’s a great investment, right?
Dead wrong!
In fact, looking at the CURRENT yield is one of the slowest ways to grow your money.
You see, if you’re focused on current yields, you’re too late to the party. All the major gains have already been made. You’ll need to settle for earning a paltry 4%, 5%, maybe 6% per year … with minimal stock-price appreciation, too.
Sure, chasing high current yields will provide you with instant gratification, but it won’t give you the recession-resistant income … or the 15% year on year returns we want.
Instead, you need to focus on consistent dividend hikes.
In my opinion, selecting companies with a proven track of increasing their dividend payments is one of the safest, most reliable ways to get rich in the stock market. You see, every time a company raises its dividend, you start earning more from your original investment.
For example:
On a $1,000 initial investment, $30 in dividends equals a 3% return. Later, if the dividends go up to $40 a year, you are effectively earning 4% on your initial $1,000 investment.
As this trend continues, you could easily be earning 10%, 15%, even 20% per year just from rising dividends, as your initial investment never changes.
However, this ever-growing income from dividend hikes is just ONE part of the puzzle. To engineer real growth and quickly double an initial investment, we must combine Pillar #1 with the next two pillars of “Hidden Yield Stocks.”
Pillar #2 – Lagging Stock Price
After years of active investing, I’ve only ever found one surefire way to predict whether a stock will go up or down.
I call it the “Dividend Magnet,” and here’s how it works …
After you’ve identified stocks that are built on the foundations of Pillar #1 (consistently hiking their dividends), you want to narrow your search to companies whose share price LAGS behind the rate of dividend increase.
Why? Well, it’s simple really …
Share prices almost always increase as dividends increase.
This is because as a company hikes its dividend, mainstream investors tend to flock to the stock, chasing the new, higher yields. And this inevitably bids up the share price.
Let me give you a few examples where the dividend acts like a floor to keep bumping the share price higher:
UnitedHealth Group: Dividend Up 460% Share Price Gains 510%
Mastercard: Dividend Up 500%, Share Price Gains 532%
Cisco Systems: Dividend Up 111%, Share Price Gains 113%
As you can see in these examples, the stock price lags behind the dividend increases at some point in time …
However, as more investors notice the company’s soaring dividend and buy in, the price lag closes—sending the share price soaring.
So, by investing in the right companies whose share prices have fallen behind despite consistent dividend hikes, you can buy the stock, safe in the knowledge the Dividend Magnet will eventually pull the price up.
Now, investing with Pillar No. 1 and No. 2 alone would stand you in great stead.
However, there’s one final Pillar of a “Hidden Yield Stock” that can rapidly accelerate both the share price and dividend payouts …
Pillar #3 – Stock Buybacks
Uncovering companies that are buying back their stocks is one of the fastest ways to accelerate your gains.
You see, when a company buys back its stock, it is improving every single “per share” metric investors watch (earnings, free cash flow, book value, etc.).
After all, if a company reduces the number of its shares by 50%, its earnings per share will automatically DOUBLE without any actual increase in profits. And I probably don’t need to tell you what will happen next …
Investors quickly bid up the stock’s price to bring it back in line with the value it was trading at before. Indeed, my research shows that simply investing in stocks that are reducing their share counts can help you beat the broader market’s performance.
And it’s important to bear in mind that S&P 500 companies are sitting on huge piles of CASH (more than $1 trillion in all!). They’re rolling out fresh buybacks amid continued economic growth post-pandemic, and they’re getting a nice upside kick in return.
You can see this just by looking at the shares of Union Pacific (UNP), which took an impressive 31% of its stock off the market in 10 years, helping drive a 100% gain in the share price!
And that’s just one example. By targeting cash-rich companies that either continue to buy back shares now or have a long record of doing so (even if they’re holding off today), you can set yourself up for HUGE price gains.
DIY Investor Diary: why this is the only fund in my SIPP
A DIY investor explains how he is investing during retirement, naming his top tips for younger investors, and explaining why he has opted for just one fund in his self-invested personal pension (SIPP).
24th October 2023
by Kyle Caldwell from interactive investor
In our DIY Investor Diary series, we speak to interactive investor customers to find out how they invest in funds and investment trusts, what their goals and objectives are, current issues and concerns regarding their portfolio, and what they’ve learned along the way. The premise is to try and provide inspiration for other investors, and we would love to hear from more people who would like to be involved.
When it comes to fund investing, one of the most common questions is whether there’s an ideal number of funds for a portfolio to strike enough balance between risk and reward.
However, as is common with other investment-related questions, there’s no “magic number” that investors should be aiming for.
Although, there is a pitfall to avoid: buying too many funds or investment trusts. If you treat funds like sweets and have too many, you risk ending up doing damage through over-diversifying and unwittingly replicating the market. This is known as “diworsification”.
For example, if you own half a dozen or more UK funds, you could potentially end up owning hundreds of different companies. That makes it harder to beat the stock market because your portfolio ends up looking like it.
If you want to invest in hundreds of UK shares, this can be done much more cheaply through a passive fund – either an index tracker or exchange-traded fund (ETF).
Therefore, it is important to ensure that each fund is bringing something unique to the party in terms of how it invests and what it is investing in.
The individual profiled in this DIY Investor Diary article ensures that there are no obvious areas of overlap in his fund holdings. He and his wife havehad a stocks and shares ISA for around 20 years, and during this time typically held half a dozen funds in each.
He said: “I invest in different regions to have diversification, but at the same time I want to avoid being over-diversified, which is why I don’t have a high number of funds. I don’t want to have funds owning the same stocks.
“It is also important to have a manageable number of funds in order to be able to concentrate on them at any one time.”
Longevity and consistency of performance are among the main qualities he looks for when sizing up funds.
He says: “I like to invest in fund managers who have been running money for a while and those that have a decent track record over three, five and 10 years. I don’t pay much attention to the one-year figure, as anyone can shoot the lights out over the short term.”
However, for his self-invested personal pension (SIPP), just one fund is held: Vanguard LifeStrategy 100% Equity. This passive fund provides diversified exposure to global stock markets by investing in 10 index funds managed by Vanguard. It is considered a potential one-stop shop holding, or a core holding, due its approach.
One of the main reasons why our DIY Investor has opted for just one passive fund is “to keep things simple”.
“It is a very straightforward fund, so I don’t have to think about it much. If I had chosen an active fund or a couple of them, I would need to monitor their performance more closely. I want to enjoy my retirement and focus on that rather than chop and change fund holdings.”
While there are lower-risk options available in the LifeStrategy range, with the four other funds having lower equity content and the balance in bonds, our DIY investor is prepared to accept higher risks in pursuit of potentially greater rewards.
He prefers equities as shares are a growth asset, which is why he went for the 100% option as he doesn’t want exposure to bonds. While the income that bonds offer is more reliable than company dividends, the disadvantage is that as the income is fixed, it does not rise with inflation.
Our DIY investor says that while he is withdrawing from the SIPP, he still wants to see the money that’s remaining growing over time. In addition, he likes the Vanguard fund’s home bias, which is a 25% weighting to UK equities.
He says: “Our occupational pensions are available in full in 2.5 and four years respectively. However, both could be taken immediately if needed. The SIPP withdrawals can reduce at that point if necessary or, more probably, reduce at age 67 when our full state pensions become available, to keep our respective incomes below the 40% tax thresholds. The SIPPs can then grow in the background as part of our inheritance tax planning.”
Our DIY Investor points out that due to having the workplace pensions and state pensions further down the line he is “happy to take on the risk” of having the SIPP invested in one passive fund and 100% in equities.
In addition, to the ISA, SIPP, and workplace pensions, three bank shares are held: Barclays , Lloyds Banking Group and NatWest Group . He views this separate pot as “fun money”, and notes that the “UK banking sector is one we are familiar with investing in.”
The couple also have Premium Bonds and cash savings that are kept below interest tax allowances.
He views the state pension as a “nice to have”, rather than as central to retirement planning. “We are deliberately not relying on the state pensions, regarding them in our overall planning as ‘nice to have’ rather than guaranteed,” he says.
Taking money out of the ISA is being prioritised, due to ISA money typically forming part of an individual’s estate for inheritance tax (IHT) purposes. A SIPP, however, does not form part of an estate for IHT purposes. If you die before age 75, the beneficiary pays no tax. For those who die after 75, beneficiaries will pay tax at their marginal rate on any income they receive.
Our DIY Investor adds: “This is all money set aside for our retirement and we are making a point of enjoying it while we are still fairly young. Our children are all planning and investing towards their own retirements with our support and guidance, although they will get some kind of legacy of course (within overall IHT limits).
“We’re currently drawing slightly over the natural yield from the SIPPs in the knowledge that we have no mortgage or debts, with other savings and investments to fall back on if needed.”
His top tips for fellow investors, and in particular for those who are younger, is to “start as early as possible” to benefit from the wonder of compound interest. “Even if it is only £25 a month, it is worth doing. Also if you are younger, don’t go for cash, go for the stocks and shares ISA instead,” he says.
Another tip is to increase your monthly investments when a pay rise comes into effect to “help keep pace with inflation”.
After spending a lifetime at work, we all hope to enjoy the kick back and enjoy the fruits of our labours. But exactly how much passive income will we need to live comfortably? This can vary substantially from person to person.
The good news is that investors today have more opportunities than ever before to hit their retirement goals. Here’s how I’m confident of achieving a luxurious retirement.
The target
As I mentioned, the exact amount a person needs in later life will vary, depending on factors like their retirement goals, where they live, and their relationship status.
Yet it’s worth considering what the Pensions and Lifetime Savings Association (PLSA) says the average person needs for a comfortable retirement to get a rough ball park estimate.
Source: PLSA
Its latest research shows that the average one-person household requires a £43,900 yearly income for a comfortable lifestyle. This level of income would provide for essentials and extras like a a healthy budget for food and clothes, a replacement car every three years, and a two-week holiday in the Med and frequent trips away each year.
The figure for a two-person household is £60,600.
A £38k+ income
There are many paths individuals can take to hit that goal. They can invest in property, develop a side hustle, or put money in dividend- and capital gains-generating shares, for instance.
I’ve personally chosen to prioritise investing in global stocks to make a retirement income, with some money also put aside in cash accounts to manage risk. With an 80-20 split across these lines, I’m targeting an average annual return of at least 9% on my share investments and 4% on my cash over the period.
Let me show you how this works. With a monthly investment of £400 in shares and cash, I could — if everything goes to plan — have a £641,362 nest egg to retire on.
If I then invested this in 6%-yielding dividend shares, I’d have an annual passive income of £38,482. Added to the State Pension (currently at £11,975), I could easily achieve what I’ll need to retire in comfort.
Of course, investing in shares is riskier than putting all my money in a simple savings account. However, funds and trusts like the iShares Core S&P 500 UCITS ETF (LSE:CSPX) can substantially reduce my risk while still letting me target the strong long-term returns the US stock market can provide.
Remember, though, that performance could be bumpy during broader share market downturns.
This exchange-traded fund (ETF) has holdings in all the businesses listed on the S&P 500 index. As well as providing me with excellent diversification by sector and region, it gives me exposure to world-class companies with market-leading positions and strong balance sheets (like Nvidia and Apple).
Since 2015, this iShares fund has provided an average annual return of 12.5%. If this continues, a regular investment here could put me well on course for a healthy passive income in retirement. It’s why I already hold it in my portfolio.
As the Snowball rolls down a hill it gathers more snow.
The blog gathers more shares every time it re-invests the dividends.
When the market crashes most shares fall at the same time, you could always sell your shares but easier with hindsight and if your are out of the market you will not have dividends to re-invest.
The Snowball is going to build, over time one position that can be sold to buy a market bargain. Without hindsight you can only buy at the bottom with luck but you can buy the yield when it falls to a yield you would be happy to earn forever.
The yield will be less than 7%, so it will be a drag on performance, that is until the market crashes but the income for the Snowball will still equal this year’s fcast of a yield of 9%. Cash for re-investment to be received on Thursday.
