Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Jeems
    • By Jeems 15th Sep 17, 6:48 PM
    • 182Posts
    • 110Thanks
    Jeems
    Experiencing my first mini dip as a new(ish) investor
    • #1
    • 15th Sep 17, 6:48 PM
    Experiencing my first mini dip as a new(ish) investor 15th Sep 17 at 6:48 PM
    The numbers are very red and lots of minus signs but I dont feel concerned. I'm still up this year (just about).

    But wow, does the strengthening of the £ and the potential interest rate rise really affect share prices that much? Will things settle down? When the £ was strong and interests rates at 5%+, I imagine share prices didnt tumble daily. How did the market react then?

    What can I expect in the near future with continued £/interest rate rises?
Page 4
    • Jeems
    • By Jeems 7th Oct 17, 11:00 AM
    • 182 Posts
    • 110 Thanks
    Jeems
    In a nutshell.
    The FTSE hit 7000 in Dec 1999 it then started it`s downwards trend and never reached 7000 again until the last year. It`s traded between 7000 and 7400 this year but the trend now is downwards again below the 7000 and beyond.
    Originally posted by 2010
    Well I'm glad this prediction didnt come true just yet.

    So it's been a few weeks or so since I posted this thread. I would say I've learned more in the past month as an investor than I have in the entire year. When I first dipped my toe in the water in Jan, the markets were fairly stable for 6 months or so. No major swings, generally a slow and steady upward trend.

    Certainly the past month has tested my risk tolerance levels. I've always said I dont need to touch the money in my S&S ISA (easy to say when you're in the green or before you've invested) but seeing constant red and minus signs with your real money was an eye opener. I'm glad to say I felt comfortable enough to stay in and not make any panic decisions especially as one of my funds dropped 6 or 7% in a couple of weeks (at a guess, as I've managed to kick the habit of daily checking)

    I'd like to thank everyone that contributed to this thread and also to those that have replied to my other questions in the past. They've all been massively helpful in my continuing quest to become a better and wiser investor. I know there will be many more extreme swings in the coming years but I feel a lot more confident now that I can handle them with a level head.

    Thanks again
    • dunstonh
    • By dunstonh 7th Oct 17, 11:09 AM
    • 89,840 Posts
    • 56,490 Thanks
    dunstonh
    Certainly the past month has tested my risk tolerance levels.
    Nothing has happened in the last month that has come close to testing risk tolerance levels unless you are very defensive natured investor. I still fear that you are investing above your risk profile.

    especially as one of my funds dropped 6 or 7% in a couple of weeks
    What are you going to do and how are you going to feel when it drops 25-40%? (or more)
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • lluzers
    • By lluzers 7th Oct 17, 11:23 AM
    • 116 Posts
    • 13 Thanks
    lluzers
    The numbers are very red and lots of minus signs but I dont feel concerned. I'm still up this year (just about).

    But wow, does the strengthening of the £ and the potential interest rate rise really affect share prices that much? Will things settle down? When the £ was strong and interests rates at 5%+, I imagine share prices didnt tumble daily. How did the market react then?

    What can I expect in the near future with continued £/interest rate rises?
    Originally posted by Jeems
    Study Warren Buffet , invest in value for long term , ignore short term discomfort of reds/minuses.Buy quality investments and forget .

    The western economies can not raise interest rates by more than 0.5 % , so pound can not rise by more than 5 % more theoretically.

    Long term you are ok , because cash depreciates and real assets do well.
    • Alexland
    • By Alexland 7th Oct 17, 11:45 AM
    • 731 Posts
    • 459 Thanks
    Alexland
    I agree with dunstonh the single digit movements in the past weeks are nothing compared to the double digit moves and long periods of recovery that can occur when a real crash happens. But still seeing some red is good practice, a good chance to make lump sum payments of any spare money lying around and helps broad multi asset funds work their rebalancing magic.
    • Jeems
    • By Jeems 7th Oct 17, 12:01 PM
    • 182 Posts
    • 110 Thanks
    Jeems
    Nothing has happened in the last month that has come close to testing risk tolerance levels unless you are very defensive natured investor. I still fear that you are investing above your risk profile.

    What are you going to do and how are you going to feel when it drops 25-40%? (or more)
    Originally posted by dunstonh
    The most I'd experienced this year were 1% swings, so this was a step up for me.

    I can't answer that until I experience a 40% drop. If I do experience one and come out the other side ok, will you be asking "well how will you feel if you experience a 50% drop?" It's all relative based on experience.

    Small steps and all that. I didnt mean for my post to make it sound like I am now 100% knowledgeable. It's an on going learning process and I just want to share my appreciation to the MSEer's who've given advice over the past year. Cheers!
    • A_T
    • By A_T 7th Oct 17, 12:10 PM
    • 233 Posts
    • 118 Thanks
    A_T
    Long term investors psychologically condition themselves by expecting a GFC-type crash imminently. That way anything better than that is a bonus.
    • Alexland
    • By Alexland 7th Oct 17, 12:15 PM
    • 731 Posts
    • 459 Thanks
    Alexland
    When the dot com and credit crunch crashes happened my main frustration was not having enough spare cash to chuck into the markets to bring down my average unit cost and maximise the recovery returns! I got some in but it's never enough.

    Still if you have cash on hand for too long then the inflation loss is more than the upside of chucking it in during a crash so you can't win.

    Maybe next time there a crash my family could try eating 100% Tesco Value food for a few months.
    Last edited by Alexland; 07-10-2017 at 12:24 PM.
    • bowlhead99
    • By bowlhead99 7th Oct 17, 3:26 PM
    • 6,981 Posts
    • 12,569 Thanks
    bowlhead99
    Maybe next time there a crash my family could try eating 100% Tesco Value food for a few months.
    Originally posted by Alexland
    They could try that now, and then you will have more money on hand to invest during the crash and no need to negatively impact your lifestyle at that point.

    You could even upgrade your lifestyle during the crash because the non-value food ranges will be on sale at Tesco, M&S and Waitrose as the public generally tighten their belts.
    • capital0ne
    • By capital0ne 9th Oct 17, 1:12 PM
    • 146 Posts
    • 79 Thanks
    capital0ne
    What were the markets like before during periods of strong £/interest rates? Is this sudden mini drop just a reaction?
    Originally posted by Jeems
    Just look a a chart of the FTSE100 going back 20 or so years
    • capital0ne
    • By capital0ne 9th Oct 17, 1:15 PM
    • 146 Posts
    • 79 Thanks
    capital0ne
    Just take the market dips as a chance to buy more stock fund units if possible to reduce your average cost per unit. That doesn't really apply to bonds which might suffer permanent capital loss.

    The problem with only buying in the crashes is that it is hard to mobilise in the moment judging the market top and bottom and you miss loads of growth in the meantime.
    Originally posted by Alexland
    Timing the market is waste of time time in the market is what matters
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

373Posts Today

1,928Users online

Martin's Twitter