The long run

avantra

I hear everywhere in the media that 'we are in uncharted territory'.
My lame question is: Is this means that the rules of the game are different? We always told by the like of IFA's that investment with a risk element ie S&S etc' always do better than deposit savings in the long run, but now that the long run is broken for years what should one do with one's ££?

Should I pull my crystal ball from the shed?

1echidna

Certainly IFAs will have to change their line of patter. However they are very good at that. Their individual advice, given in private with lots of encouraging words and the appropriate caveats delivered in a way to imply that you needn't take too much notice of these will continue to generate business. I wish I could be more constructive though.

Money_Grabber13579

avantra wrote: »

I hear everywhere in the media that 'we are in uncharted territory'.
My lame question is: Is this means that the rules of the game are different? We always told by the like of IFA's that investment with a risk element ie S&S etc' always do better than deposit savings in the long run, but now that the long run is broken for years what should one do with one's ££?

Should I pull my crystal ball from the shed?

As the economist once said, in the long run, we're all dead!

To answer your question, nobody knows how long this downturn will last, bear markets in the past have usually sorted themselves out in about 2 years. We haven't reached that stage yet, so it's hard to tell. Certainly at this stage, if you don't have any money in S&S, I wouldn't be putting any in - I don't think we've hit the bottom of the market. (Reckon it could go as low as about 3300-3500)

Heard someone say today that it will be 2019 before we're sorted out, but I think that's more doom and gloom than realistic. I think we should be on our road to recovery by 2010 or at the latest 2011.

The long run certainly isn't broken, there is always periods of ups and downs in the long run, this is just one of those times. However I think it is being made worse by the media, who are talking it all up because there's no other big stories around at the minute. After all, inventive headlines sell newspapers!

dkmax_2

avantra wrote: »

Is this means that the rules of the game are different?

The rules are the same that they've ever been. The difference is what the people at the top can get away with this time around before the voters catch on. The trouble is voters are rather slow, forgetful and easily distracted by shiny objects.

How much bad news has been buried this week I wonder.

cheerfulcat

Hi, avantra,

avantra wrote: »

I hear everywhere in the media that 'we are in uncharted territory'.
My lame question is: Is this means that the rules of the game are different? We always told by the like of IFA's that investment with a risk element ie S&S etc' always do better than deposit savings in the long run, but now that the long run is broken for years what should one do with one's ££?

Despite what the media would have you believe, nothing fundamental has changed, IMO. The best advice is what it has always been - stay diversified to spread the risk. And don't be fooled - even cash is risky, just in different ways.

purch

The best advice is what it has always been - stay diversified to spread the risk

Never a truer word.....etc etc

The most successful portfolio's over the longer term have never been all Invested in Equity's, or Fixed Income or whatever.

Unfortunately the "Balanced Managed" sector has given Balanced a bad name over the years, because Funds in that sector rarely have been truely Balanced..........but for all Investors a properly balanced portfolio should always be the ultimate aim.

wagdog

Money_Grabber13579 wrote: »

bear markets in the past have usually sorted themselves out in about 2 years.

Although there have been a few that have lasted longer.

This was the mother of all bubbles popping that affected virtually all asset classes. It may be a long time before we see such irrational exuberance again. Or some clever git may figure out yet another convoluted way to hide risk from investors and get a new bubble inflating once again. Anything can happen.