Crash Bang Wallop
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Glastoun
Posts: 257 Forumite
There was a comment in another thread that when the crash comes, retail investors won't be able to get their money out fast enough. Given that most funds/shares can be sold within 24 hours, I'm guessing the problem will be actually realising that there's a problem, and how long it might last for.
For those that were invested in 2007/08, when did you realise something was up, and what did you do about it? Did anyone just watch their funds drop week by week? Does anyone regret what they did/didn't do based on information they had at the time?
For those that were invested in 2007/08, when did you realise something was up, and what did you do about it? Did anyone just watch their funds drop week by week? Does anyone regret what they did/didn't do based on information they had at the time?
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..been in the market since '95, (passive), it tanked in '98, then recovered, tanked again in 2001, then recovered, tanked again 2003, then recovered, then tanked big time in 08/09, then recovered, then tank a bit in 2010, and then recovered...my only regret is not buying more shares when the market neared the bottom. I guess the overall "max / natural" value tends to be around the 6,200 mark. As long as you have sufficient "other" funds / income to live on, then I guess its best to not panic, and just sit it out until it comes "good" again...
As somebody has already pointed out on another thread, the "crashes / reductions" always happen faster than the recovery....."It's everybody's fault but mine...."0 -
Smart people would be buying up the stock, rather than selling at these crashes. At each occasion when this has happened in the past the markets have recovered past the point of the start of a collapse given time.
The problems arise if you're using leverage in which case if you don't use a guaranteed stop loss you could get taken out well below your stop loss and end up owing the broker shed loads of cash if you were on the wrong side of the market.0 -
Selling when the price drops is easy. The problem is knowing when to buy back in. Anyone nervous enough to sell is likely to leave it too late and so be worse off than if they had done nothing.
In my case I did nothing and am now showing a healthy profit. It took about two years to break even. Equity investing is for the long term, a two year blip is irrelevant in my view.0 -
The problem is more so your psychology more than anything else. Most people are stuck like a deer in headlights and watch it keep on tumbling down.
The best thing you can do is draw some trend lines on the FTSE or whatever market you are invested in and sell when it breaks out of the trend.0 -
The best thing you can do is draw some trend lines on the FTSE or whatever market you are invested in and sell when it breaks out of the trend.
you're suggesting all investors should be using a bit of technical analysis? that's very bad advice. i expect it works for a few ppl, but if unless you have a very clear idea of what you're doing, and the right mindset, and enough time to spend on it, you'd be better off completely ignoring TA. not something to dabble in.0 -
The problem is more so your psychology more than anything else. Most people are stuck like a deer in headlights and watch it keep on tumbling down.
The best thing you can do is draw some trend lines on the FTSE or whatever market you are invested in and sell when it breaks out of the trend.
When do you buy back in? What are the chances that when your trend lines do something convincing the price is already higher than when you sold especially after taking costs of selling/buying into consideration?0 -
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I guess the overall "max / natural" value tends to be around the 6,200 mark.
Hard to say. The long term trend is for capital values to rise above inflation, so even if 6200 was right a decade ago, it isn't now, and won't be ten years hence.
I do put more into equities when the market is having bad years/months/days, but much of this is just rebalancing between asset classes. Similarly, I sell off some equities after long bull runs, but this money goes into asset classes and markets that haven't done so well.
Commercial property and private equity are still fairly cheap and unloved, particularly if you buy in areas that are also out of favour, and via ITs that are on discounts.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
grey_gym_sock wrote: »you're suggesting all investors should be using a bit of technical analysis? that's very bad advice. i expect it works for a few ppl, but if unless you have a very clear idea of what you're doing, and the right mindset, and enough time to spend on it, you'd be better off completely ignoring TA. not something to dabble in.
The OP was asking how to get an idea the market is going to tank. I by no means gave a perfect answer but nevertheless it is one metric that you can use to see things are not going to well on the uptrend.
The issue is by the time you have hit the trend line it could already be 100 points down on the S&P 500 for example, you sell and then it goes back up again.
The biggest one day losses on the US indexes on average are 7% ish. Human psychology hates losing so most people hang on, which as the Gym sock above says is probably the best thing you can do over the long term.
But if you are brave enough to sell you might be able to buy your favourite stocks back at a lot lower prices.0 -
I was in France w/o internet access so heard about it, but could do nothing (twice in fact- a lot of these happen in July/August lol).
But, generally, I don't sell in crashes, I buy. So if I had cash, I would have bought when I got home (and may have). I did a LOT of buying when the markets opened after 9/11.
Apart from some shares I held like lloyds, everything I held went back up.0
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