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Staying in the markets during an recession?

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  • jimjames
    jimjames Posts: 18,661 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    There are certain points where it is reasonably clear that investing in the market is good value. One of the main indicators is total pessimism so while all around are saying how bad things are is normally a good time to pile in.

    March 2009 was one of those times. So although you may not be able to time the in & outs of the markets if you have cash available it can be worth investing that when events such as that happen.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • sabretoothtigger
    sabretoothtigger Posts: 10,036 Forumite
    Part of the Furniture 10,000 Posts Photogenic Combo Breaker
    Cash is king yea but Im also considering gold as such. Im hoping I'd have a good reason to sell it at such a low like Jim says.

    Im not that biased but I dont really ever see Gold dipping down like it used to, bad news or good it just never seems to fall alot like it did. But still would like a good reason to sell it, its better then cash right now (which shows our world is upside down)
  • rockitup
    rockitup Posts: 677 Forumite
    jimjames wrote: »
    There are certain points where it is reasonably clear that investing in the market is good value. One of the main indicators is total pessimism so while all around are saying how bad things are is normally a good time to pile in.
    I started back buying IT's and UT's on a monthly basis back in October 2008 for the same reason. Do you remember that 777 point drop on the Dow, I think end of Sept 08? Watching the US Finance channels, most of the presenters looked like they were suffering from heart failure...

    A couple of weeks later some of the analysts interviewed said it was time to start dipping a toe back in the water.... others were saying Dow will fall to 3,000
  • Doshwaster
    Doshwaster Posts: 6,329 Forumite
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    ruperts wrote: »
    My first real investment was £1k in Bank of Ireland when it was at about 70p in October last year. I'd been watching it for months and had made a fortune on it in a practice account. There were even some 'respectable' articles knocking around online talking about how much of a bargain it looked. So I took the plunge quietly confident of my first multi-bagger. Less than a year later... 14p.

    Lesson learned - even the experts don't know which way things are going to go and even if they do, they're not going to tell me. Rule No 1: Never lose money. Rule No 2: Don't forget No 1.

    Although, I have to be honest, I am sorely tempted to add to my position at 14p....

    Banking shares have been an interesting ride over the last few years. I bought Barclays at the height of the financial crisis for something like 80p. I thought that they were a fundamentally solid bank, not a basketcase like some others (HBOS etc) and were just being dragged down by the market. I sold last year at 360p. I more than quadrupled my money.

    Generally I see a recession as a buying opportunity. It's a time to go for solid, established, companies who are well able to ride out the troubles. I'm not so interested in trying to spot the startup which will have a market breakthrough.

    But we all make mistakes - and that's half the fun of the stock market. My Number 1 rule for shares is don't invest what you cannot afford to lose
  • deutsch
    deutsch Posts: 398 Forumite
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    Lloyds weakness or main point is its mostly UK based. Icing on the cake is Ireland debt also but its mostly a UK trade and the other banks arent so much.
    I think Lloyds are too cheap now, they can afford to pay 4p div for last two years but have been banned from doing so. I think its fair to say that potential is within the price, making them even cheaper then they appear

    My target is over 60p for them, best case would be 80 say

    past few days, this has shot down.
    lowest point was 20p around march 2009.
    break even is 63p for the government.
    what do you think wednesday's price will be?

    i'm at a loss at the moment, but looking long term (hopefully not 5 years!). i do sometimes wonder whether i should pull out this share.
  • sabretoothtigger
    sabretoothtigger Posts: 10,036 Forumite
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    edited 7 June 2011 at 11:12AM
    I cant predict one day or even estimate without a lot of trying to factor probabilities
    Im just saying long term worth 1 to 5 yr, I think I like the new guys attitude, see what he actually does though.

    Price isnt always accurate and they always go over the top either way

    I commented the other week 45 was a reasonable target, once it breaks certain levels it tends to stay weak till someone big thinks its a bargain

    20 is right, I bought a couple at that level. On first listing lloyds dealt them for free :D My last big sale was at 62p just after their last big rights issue. I think anywhere below 60 is ok value but below that because rights involves so many people it performs like a 'damaged' share

    MrO4r.png

    ^^ That bottom bit is trying to exaggerate the wild swings. Red is too many people confident and if it touches bottom overly negative


    My simple point would be if you see a company return to Spring 2009 pricing think hard of if this company deserves a disaster rating or not because you have a reasonable guide from that time. Some of course will go broke, i dont know who
  • blinko
    blinko Posts: 2,519 Forumite
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    I cant predict one day or even estimate without a lot of trying to factor probabilities
    Im just saying long term worth 1 to 5 yr, I think I like the new guys attitude, see what he actually does though.

    Price isnt always accurate and they always go over the top either way

    I commented the other week 45 was a reasonable target, once it breaks certain levels it tends to stay weak till someone big thinks its a bargain

    20 is right, I bought a couple at that level. On first listing lloyds dealt them for free :D My last big sale was at 62p just after their last big rights issue. I think anywhere below 60 is ok value but below that because rights involves so many people it performs like a 'damaged' share

    MrO4r.png

    ^^ That bottom bit is trying to exaggerate the wild swings. Red is too many people confident and if it touches bottom overly negative


    My simple point would be if you see a company return to Spring 2009 pricing think hard of if this company deserves a disaster rating or not because you have a reasonable guide from that time. Some of course will go broke, i dont know who

    I think lloyds will trickle down more, SBT I think there is alot more bad news on the horizon, maionly from US economy and euro debt plus throw in some euro (!!!!!!s) bank regulation and theres way too much bad news on the horizon compared to good news.

    Im liking the look of lloyds but only sub 40p sorry guys
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