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  • FIRST POST
    • BrockStoker
    • By BrockStoker 5th Feb 18, 8:32 PM
    • 194Posts
    • 87Thanks
    BrockStoker
    Correction in progress!
    • #1
    • 5th Feb 18, 8:32 PM
    Correction in progress! 5th Feb 18 at 8:32 PM
    I've just seen the largest (single day) spike in volatility I've ever experienced (currently @ 106%). Certainly it's looking like this is going to be the largest correction since 2015!

    https://uk.investing.com/indices/volatility-s-p-500-chart

    Time to look at what to buy with the cash I've been holding!

    More inclined to look at overseas assets/equities, but I have been thinking about buying some UK micro-cap for a while, and possibly some Chinese equities. Any one else shopping right now?
Page 12
    • mollycat
    • By mollycat 9th Feb 18, 2:03 PM
    • 989 Posts
    • 1,962 Thanks
    mollycat
    Without meaning to be confrontational - you're a perfectly polite person - several market indices are down by more than 10% including the Nikkei and the Hong Kong Hang Send, so we are certainly seeing a significant correction. You are of course correct about the FTSE 100, although only just. However, saying this this is only the start of a correction is, dare I say, and I don't mean to be a meany mean meany, not entirely accurate? Perhaps?

    Yes I have said several times that this is not yet a big deal, time will tell if this is a ripple or a tsunami.

    Regarding my SIPP contributions, I am putting large sums in to my SIPP each year to get back as much tax as possible, so for me a market dip is good news. Yes of course as the markets stand it's not a big deal, but it might be helpful, depending on how it pans out.
    Originally posted by BananaRepublic
    We're probably not really saying different things

    My sentiment was (and I'm not all that sure why i bothered ), that there seemed to be a huge amount of traffic and (mild) angst on the board about something that we should all expect, and quite often welcome, given individual circumstances.

    I didn't think it mattered too much with regard to that point whether it was/wasn't an actual correction or not!

    I'm not bothered about being "put right" on the matter!

    I wish you well BR, often find your posts (and educational links) helpful.
    • coastline
    • By coastline 9th Feb 18, 2:04 PM
    • 938 Posts
    • 1,081 Thanks
    coastline
    Whether markets fall further or start to rise again soon, I assume markets will eventually get back to and surpass the previous highs, as over the long term markets should continue to rise. Is the reason for the correction just the fact that they had risen so fast over the last couple of years?
    Originally posted by Audaxer
    The USA the main driver of world markets has risen at a rapid pace in the short term.Look at the steep rise in the last few months compared to previous. Its mentioned that institutions buy up the markets when they hit the 200 day moving average. I've no idea if its certain but it can be an indicator.? In recent days the market was around 15% above its long term average which is a rare event.

    http://stockcharts.com/public/1585038/tenpp/1

    There hasnt been a correction for a while so the probability of one was high..
    I posted these charts early January this year..

    https://www.advisorperspectives.com/images/content_image/data/36/36054e6065bfb26049f5b0e8f1278087.png

    https://pbs.twimg.com/media/DRhKHGQVQAAYwy-.jpg

    We can only wait and see if its all to do with wage growth , inflation and job creation. Theres always an excuse for a sell off anyway and I'm sure one day the markets will be back.
    • george4064
    • By george4064 9th Feb 18, 2:33 PM
    • 898 Posts
    • 984 Thanks
    george4064
    Just topped up my S&P 500 ETF tracker with some cash I had in my ISA, still plenty more cash on the sidelines if things turn really nasty.
    "If you arenít willing to own a stock for ten years, donít even think about owning it for ten minutesĒ Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £12,427.51/£12,000 (104%)
    Save £12k in 2018 - #004 £0/£12,000 (0%)
    • capital0ne
    • By capital0ne 9th Feb 18, 2:50 PM
    • 324 Posts
    • 158 Thanks
    capital0ne
    Just topped up my S&P 500 ETF tracker with some cash I had in my ISA, still plenty more cash on the sidelines if things turn really nasty.
    Originally posted by george4064
    So you're not actually investing any large sums then. It won't make much difference, and you'll miss the turning point not to mention dividends (even with a tracker)
    • george4064
    • By george4064 9th Feb 18, 3:06 PM
    • 898 Posts
    • 984 Thanks
    george4064
    So you're not actually investing any large sums then. It won't make much difference, and you'll miss the turning point not to mention dividends (even with a tracker)
    Originally posted by capital0ne
    What constitutes as 'large sums'?

    Previously I had about 11% cash in my ISA, now its down to 8%. The other cash on the sidelines I was referring to cash in P2P, current accounts etc. which I would be happy to move into ISA if things turn nasty.
    "If you arenít willing to own a stock for ten years, donít even think about owning it for ten minutesĒ Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £12,427.51/£12,000 (104%)
    Save £12k in 2018 - #004 £0/£12,000 (0%)
    • Filo25
    • By Filo25 9th Feb 18, 3:13 PM
    • 1,324 Posts
    • 1,951 Thanks
    Filo25
    A 10% fall is generally defined as a correction, so the DOW is there now. There was massive selling by funds at the close yesterday which is being interpreted as 'capitulation'. I don't buy it. Economic fundamentals have to kick in soon and the level of US debt, QE, BREXIT, inflation, rising interest rates etc are going to mean bigger falls...........call me Dr Doom. So maybe that DB pension option is looking a bit more tempting today?
    Originally posted by bostonerimus
    It does feel like an "interesting" time in the markets at present, investors need to come to terms with what are fair valuations with monetary tightening an ongoing factor.

    Earnings look healthy though as does the general economy, if the central banks can handle the situation with skill then further impacts may not be immediately visible, could just be a compression of returns going forwards as policy gradually normalises rather than anything too spectacular, of course I know it often doesn't work out like that!

    Certainly if policy starts to tighten more quickly valuations are going to look stretched.
    • economic
    • By economic 9th Feb 18, 3:23 PM
    • 2,705 Posts
    • 1,438 Thanks
    economic
    I see no reason for rates to go much higher, probably market has priced in more then what should happen. We are still in low wage growth, low inflation and have vasts amount of productivity increases and cost efficiency. There is no reason to suggest inflation will rise meaningfully.
    • ffacoffipawb
    • By ffacoffipawb 9th Feb 18, 3:50 PM
    • 2,428 Posts
    • 1,575 Thanks
    ffacoffipawb
    Dow is going t1ts up again, this drop has some way to go I feel, FTSE to 5xxx I suspect.
    • Filo25
    • By Filo25 9th Feb 18, 3:51 PM
    • 1,324 Posts
    • 1,951 Thanks
    Filo25
    I see no reason for rates to go much higher, probably market has priced in more then what should happen. We are still in low wage growth, low inflation and have vasts amount of productivity increases and cost efficiency. There is no reason to suggest inflation will rise meaningfully.
    Originally posted by economic
    On the other hand global growth is picking up, and it is difficult to justify continuing to leave monetary policy at what is effectively emergency policy indefinitely.

    Ignoring anything else I think some normalisation is desirable to stop asset prices getting further out of hand and to give the central banks some ammunition to loosen policy in future if we do see future slowdowns.

    Not looking at massive tightening anyway, for the UK, maybe expectations now about 2% by 2020 now rather than 1.25%.

    The central banks will take it gradually in any case, if we start to see significant negative impacts on the real economy, no doubt things will go on hold.

    US deficit is likely to be growing which means even more bond issuance as well, also not likely to help equities.
    Last edited by Filo25; 09-02-2018 at 4:06 PM.
    • fun4everyone
    • By fun4everyone 9th Feb 18, 3:55 PM
    • 894 Posts
    • 1,434 Thanks
    fun4everyone
    Deutsche bank share price below it's lows during the GFC. Please go bust.
    • TBC15
    • By TBC15 9th Feb 18, 5:35 PM
    • 374 Posts
    • 176 Thanks
    TBC15
    Dow is going t1ts up again, this drop has some way to go I feel, FTSE to 5xxx I suspect.
    Originally posted by ffacoffipawb
    You naughty profit of doom.
    • bostonerimus
    • By bostonerimus 9th Feb 18, 5:50 PM
    • 1,555 Posts
    • 996 Thanks
    bostonerimus
    There will be many 10% drawbacks in any stock market portfolio, and several 20% or 30% crashes in a lifetime. All our talk about asset allocation and sensible withdrawal rates are based on these downs as well as the ups. So for all those either selling into a downturn or who have been sitting on cash and have missed out of the gains you probably won't come out ahead. People who stay onvested and manage a sensible allocation through the ups and the downs have the best chances of success.
    Misanthrope in search of similar for mutual loathing
    • capital0ne
    • By capital0ne 9th Feb 18, 6:38 PM
    • 324 Posts
    • 158 Thanks
    capital0ne
    There will be many 10% drawbacks in any stock market portfolio, and several 20% or 30% crashes in a lifetime. All our talk about asset allocation and sensible withdrawal rates are based on these downs as well as the ups. So for all those either selling into a downturn or who have been sitting on cash and have missed out of the gains you probably won't come out ahead. People who stay onvested and manage a sensible allocation through the ups and the downs have the best chances of success.
    Originally posted by bostonerimus
    Couldn't have pit it better myself - cheers
    • capital0ne
    • By capital0ne 9th Feb 18, 6:41 PM
    • 324 Posts
    • 158 Thanks
    capital0ne
    What constitutes as 'large sums'?

    Previously I had about 11% cash in my ISA, now its down to 8%. The other cash on the sidelines I was referring to cash in P2P, current accounts etc. which I would be happy to move into ISA if things turn nasty.
    Originally posted by george4064
    Very true, £m would be peanuts to WB or EM, but I know most of us on here wouldn't be investing much more than £5-20k - small beer really - might as well have been invested rather than having cash sitting around losing 3% due to inflation!
    • cloud_dog
    • By cloud_dog 9th Feb 18, 6:44 PM
    • 3,509 Posts
    • 2,029 Thanks
    cloud_dog
    Whether markets fall further or start to rise again soon, I assume markets will eventually get back to and surpass the previous highs, as over the long term markets should continue to rise.
    Originally posted by Audaxer
    Have a look at this Yahoo page for the S&P 500 index, specifically the table at the bottom listing the size of corrections over the years and the length of time to recover back to the pre-correction level.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • bowlhead99
    • By bowlhead99 9th Feb 18, 7:01 PM
    • 7,290 Posts
    • 13,311 Thanks
    bowlhead99
    Deutsche bank share price below it's lows during the GFC. Please go bust.
    Originally posted by fun4everyone
    Why, do you have a bet on it? Otherwise it doesn't sound like the kind of event that would help you out financially, unless you think another global financial crisis is the ideal thing to happen to our economy right now.

    FWIW on Monday I'll have held my Deutsche Bank shares for exactly two years, having bought at about EUR 13, and they closed at 12.5 today. I sold over half of them for about 40% profit within a month of buying them and kept the rest. Maybe I should take a look at them again over the weekend and perhaps buy more, just so I can 'laugh all the way to the bank' (pun intended) in the faces of those who for some reason want another financial meltdown.
    • fun4everyone
    • By fun4everyone 9th Feb 18, 7:46 PM
    • 894 Posts
    • 1,434 Thanks
    fun4everyone
    Why
    Originally posted by bowlhead99
    Don't like them.
    • ValiantSon
    • By ValiantSon 9th Feb 18, 9:39 PM
    • 852 Posts
    • 689 Thanks
    ValiantSon
    No sooner do I say that Bitcoins were stabilising only to find out they've dropped a further £200, I honestly don't get it.
    Originally posted by Cotta
    There is no underlying value in Bitcoin so the price depends on sentiment - which is impossible to predict.
    At least with diversified equities you have underlying value to stop the price falling to zero.
    Originally posted by Glen Clark
    As Glen says, there is no underlying value in Bitcoin, and, importantly, the market is full of get rich quick speculation, so the volatility is driven by waves of elation and hysteria as people think they're going to become multi-millionaires and then at the first hint of a slowdown or downturn, sell because they panic that they're going to lose everything.

    There are lots of bitcoin investors who have absolutely no idea what they are doing, and very little idea what it is they are actually trading. The end result is a super volatile market.
    • ValiantSon
    • By ValiantSon 9th Feb 18, 9:43 PM
    • 852 Posts
    • 689 Thanks
    ValiantSon
    Are you sure? I suspect you have not been investing for long, less than 10 years anyway. This is at the moment no more than a wobble.
    Originally posted by BananaRepublic
    I think the point being made was that timing the market is a mug's game so any time is good because you cannot know what will happen.
    • ValiantSon
    • By ValiantSon 9th Feb 18, 9:54 PM
    • 852 Posts
    • 689 Thanks
    ValiantSon
    Deutsche bank share price below it's lows during the GFC. Please go bust.
    Originally posted by fun4everyone
    Why on earth would you want Deutsche Bank to go bust? The ensuing fallout would have a vast and massive negative impact on the economy. Was 2008 not enough impending economic chaos for you?
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