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

Ark_Welder

cepheus wrote: »

Perhaps commodity investments have become just as important as shares or bonds?

Which will be inflationary because these industrial materials will be at the mercy of speculators. Much of the trading in futures, etc that was done in the past was to give predictability of prices between the buyer and seller.

Alternatively, a view at: http://www.econlib.org/library/Enc/NaturalResources.html

Perhaps the greatest resource is human ingenuity.

purch

If I think markets will go down, why should not I sell and then buy again when (I think) they are going up?

That's the best way to make money.

Sell when the markets falling, and buy when it's rising.

cepheus

Ark_Welder wrote: »

Which will be inflationary because these industrial materials will be at the mercy of speculators. Much of the trading in futures, etc that was done in the past was to give predictability of prices between the buyer and seller.

Alternatively, a view at: http://www.econlib.org/library/Enc/NaturalResources.html

Perhaps the greatest resource is human ingenuity.

Interesting link, thanks for this

if its price is not distorted by interference such as government intervention or international cartels, then the resource’s price will rise as its remaining quantity declines. So any price rises can be interpreted as a signal that the resource is getting scarcer. If, on the other hand, the price of a resource actually falls, consistently and without regulatory interference, it is very unlikely that its effective stock is growing scarce.

So should we be worried? I suppose oil fluctuations are partly artificial due to restrictions of supply by OPEC.

ses6jwg

Well my portfolio that was worth 16k 2 weeks ago is now worth 11k.

I'm just gonna hold. I've got mostly small oil explorers, usually the first to take hits in a dip, but then the quickest to rally back on any recovery.

cepheus

Dow seems to have melted down tonight, 5.5% lower, so FTSE100 now around 4867 on the grey market according to IGIndex price

Ark_Welder

cepheus wrote: »

So should we be worried? I suppose oil fluctuations are partly artificial due to restrictions of supply by OPEC.

I wouldn't say that we should be worried, more that we should not be complacent. Expect unexpected breakthroughs to occur, but still take steps to become more efficient with the current resources.

The main rises in the oil price have been due to wars in the Middle East, starting with the Arab response to the West over the Yom Kipur war in 1973 - the original 'oil shock'. But some countries there are more in tune with the West now - they like the dollars! (... or one day, the Renminbi)

Of interest will be how fusion power develops: http://www.ccfe.ac.uk/ Perhaps this could be the biggie that makes electric cars a viable proposition by addressing the environmental concerns about how the electricity is generated. Not sure how this would manage to power a freight ship transporting international goods though!

Perhaps geothermal energy will get a kickstart, and more domestic ground source pumps will be installed in homes - might be easier for newer developments.


Well. A bit off track from the thread. So shall I finish by saying that the Nikkei opened only 2% down from yesterday's close? Not as bad as predicted by the futures markets. So 'don't panic' (we'll ignore the fact that is it now 3.7% down...).

jon3001

max11 wrote: »

Hi guys,
sorry for the newbie question.

If I think markets will go down, why should not I sell and then buy again when (I think) they are going up?

I say go for it. Short stocks on the way down. Go long on the way up. You'll be a billionaire in no time.

jon3001

cepheus wrote: »

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

Agreed - a balanced and diversified portfolio would include all those assets: commodities, precious metals, property, equities and bonds with significant allocations in each asset class. The above shows that returns aren't compromised and that equities aren't inherently superior to alternative asset classes.

Having your investments concentrated in a single asset class (e.g. equities) or even a single market (e.g. Japanese stocks) is very risky.

Equities also went nowhere throughout the 70s and the death of equity investing was reported. Experienced investors kept on buying up those cheap stocks to the bemusement and riducule of others. That set them up for a 20 year bull market.

cinderfella

The Markets have calmed down a little today due to a forthcoming Fed statement this evening. Unfortunately no matter what the Fed says the markets will continue to be volatile until Germany bites the bullet.
America cannot change the course of the markets as they do not possess a 'magic wand'.
The ECB has bought about 3 weeks by intervening with buying Italian & Spanish bonds but their resources are limited as they do not support a policy of QE like the US. The Germans are very wary about introducing 'Eurobonds' because their taxpayers would end up paying the 'tab'.
However, Angela Merkel will no doubt work to this effect as their is no other solution for the Euro but to have a 2 trillion fund to support the Euro with so many countries on the 'brink'.
So expect 'choppy' markets for a couple of weeks until the European parliaments put a final end to all this uncertainty, it's in their interest to do so as this is their last chance probably.
I am not going to say, ' fill your boots me hearties with cheap equities' in the meantime because other responsible members on this forum would soon put me down for being so irresponsible.:rotfl:

jon3001

Business Week's "The Death of Equities" Revisited
http://www.fiendbear.com/deatheq.htm

Some interesting insights and echoes from the investing world of 30 years ago...