MSE News: 'Don't panic', investors are told, amid market slump

Ark_Welder

Lots of small retail buys into gold ETFs during the past year compared to larger holdings. Also big long bets by hedgies in the futures markets. In July, gold rose for eleven days on the trot - the longest run since 1980.

Draw your own conclusions.

cepheus

MSE News: 'Don't panic', investors are told, amid market slump

Is this what they told Japanese investors in 1990? This is not up to date but 9299 this morning.

lvader

Japan is a special case, a lot of it was down to currency appreciation. Somehow I don't expect the USD, the Euro or the pound to do really well.

cepheus

Peraphs but many stockmarkets have never posted positive real returns after allowing for inflation



Real returns are 4.3% for US market and roughly 2.5% for UK market between 1921-1996 with a median of 1.5% after allowing for inflation. See page 31.

http://faculty.fuqua.duke.edu/~charv.../GJ_Global.pdf

Ark_Welder

cepheus wrote: »

MSE News: 'Don't panic', investors are told, amid market slump

Is this what they told Japanese investors in 1990? This is not up to date but 9299 this morning.

This trend has been noted for a while, and parallels have been drawn with US and UK markets: http://seekingalpha.com/article/162346-how-does-the-dow-today-compare-to-the-nikkei-of-the-1990s


From the Dow's peak in 1929 it took until 1956 for it to recover the level. Also of note is the flat period from 1966 to 1982.

http://stockcharts.com/freecharts/historical/djia1900.html



All reasons for deciding on what an individual's investment aims are, and how best to go about them.

dunstonh

ctually I just looked and it seems anyone who invested in 1997 would have made a loss. If you take inflation into account the loss would be bigger. That's over about 14 years. the next 5 years don't look to rosey either.

Investing 100% in one sector is bad investing and anyone doing that is asking for poor returns. However, its not as bad as that as you are not including dividends. Taking an index tracker from aug 97 to close today you would be 47% up on FTSE100 and 68% up on FTSE all share.

Herbie_Hancock_I_wish

Yes a bit of a worry at my age . My wife , slightly younger , is working and gets about £5k a year in pensions , state and serps next year . . I am disabled but I receive DLA plus enhanced ESA . We have about £80k in distribution bonds , At the time they looked a safe low risk investment . I also have private (smallish ) pensions due in 2 and a half years time .

We have kept back nearly £60k in cash and cash isas . It would appear that I can stay within the existing pension fund up to 75 . The bonds were set up for 5 years . If the market is still low , am I able to remain in those bonds longer? No mortgage or debt. We both live life low . Less worry doing that way and tend to enjoy a more interesting life other tan lusting after 82 inch plasma TVs .

Tbh I am quite concerned where all of this is going . When there is talk that America was nearly broke , I don`t feel comfortable .

Rollinghome

dunstonh wrote: »

Investing 100% in one sector is bad investing and anyone doing that is asking for poor returns. However, its not as bad as that as you are not including dividends. Taking an index tracker from aug 97 to close today you would be 47% up on FTSE100 and 68% up on FTSE all share.

But of course, not in real terms, as you are not including the effect of inflation. After inflation that 47% would give a total return of around 0.5% per annum.

By coincidence, about the same as typically paid to financial advisers as trail commission and rather less than the return on NS&I inflation-linked savings certificates over the period.

cepheus

dunstonh wrote: »

Investing 100% in one sector is bad investing and anyone doing that is asking for poor returns. However, its not as bad as that as you are not including dividends. Taking an index tracker from aug 97 to close today you would be 47% up on FTSE100 and 68% up on FTSE all share.

I don't think that return is index adjusted?

I agree though if you had invested in a highly diversified basket you would have done well in the last few decades. Equities have performed poorly since 2000, although they were the star of the 80s and 90s. For a longer timeline see this link

IronWolf

But if you are a wise investor u will know the stock markets today are nothing like in 2000, so there's no point comparing trends since 2000. We are not at huge multiples of earnings and there are plenty of good companies now selling at a pe ratio of less than 10 which is good value