The Stock Market Takes Another Dive - Steer Clear ?

GeorgeHowell

MrMalkin wrote: »

So you don't think people should use IFAs, you think the financial services industry is not to be trusted, and you don't think people should be required to do their own research. What do you want then - some sort of investment guardian angel to protect these poor innocent rookie investors?

Essentially yes. If IFAs purport to be proper professionals, comparable with lawyers and accountants, then they have to act in the best interests of their clients at all times. Otherwise they are nothing but brokers acting between people out to sell financial products and those who might buy them, without unequivocal loyalty to either. The proposed ban on commission for IFAs surely indicates that the present situation is not satisfactory, and that they cannot be relied on to represent their clients' best interests at times when maximising their own income might point in a different direction. If IFAs are going to act purely on an hourly rate then certainly they have to be investment guardian angels to protect poor innocent rookie investors -- indeed all investors. Otherwise what is the point of them ? I still worry though that they will tend to point people too much towards complex and/or capital risky products, because offering simple and safe solutions when appropriate will tend to make many of the clients think that they could have come up with that idea on their own. There may remain the problem of tied FAs who can accept commission and those working for financial institutions who I believe still manage to convince the unwary that they are giving them objective advice when in fact treating them as 'muppets' (eg interest rate swaps for small businesses)

gadgetmind

DannyRadclif wrote: »

Surely now is a good is a good time to buy into the stock market while its down?

Late summer last year was a *great* time to be buying anything, but it's patchy right now as many markets up up 10% from those lows. Anything defensive is getting toppy, and I'm holding off most high yield purchases. I'm also cautious on the US and UK, but am starting to over-weight EM, Europe and Japan.

I'm sure others have their own views and asset allocation strategies.

gadgetmind

1echidna wrote: »

I have some investments, mainly US/UK which I intend to hang onto. No thoughts of investing more anywhere for the moment, probably review in six months.

Well done on not panicking and selling your current holdings.

I'm very glad of the big buying I did last year, and OK with my buying in January this year. The jury is still out regards my more recent purchases, but isn't that always the way?

DannyRadclif

1echidna wrote: »

I have some investments, mainly US/UK which I intend to hang onto. No thoughts of investing more anywhere for the moment, probably review in six months.

But in 6 months will this dive have gone even lower? Nothing in the pipeline this time like QE3 or is it 4, that was the only thing preventing a stock market crash last time. The worldwide crisis is getting worse by the day, is this why so many are selling and staying out.?

1echidna

DannyRadclif wrote: »

But in 6 months will this dive have gone even lower? Nothing in the pipeline this time like QE3 or is it 4, that was the only thing preventing a stock market crash last time. The worldwide crisis is getting worse by the day, is this why so many are selling and staying out.?

I am not sure the situation is getting worse. My analysis is that there is a risk premium built into the market because of hazardous situation with regard to Iran. I feel the critical moments in the standoff are approaching and there may come a better time to buy into the markets. Maybe there is a substantial 'war premium' on the price of oil which if removed will transform prospects. For a number of reasons I believe the US/UK are best placed to prosper.

gadgetmind

DannyRadclif wrote: »

But in 6 months will this dive have gone even lower?

Maybe, but it took some big knocks and shocks and refused to stay down for long. I sense pent up demand.

is this why so many are selling and staying out.?

Many investors are *heavily* driven by fear and *any* risk whatsoever will cause them to pull money off the table. When they finally pile back in, it's usually into the teeth of a mature bull market that's about to crest the top yet again.

srcandas

Had a similar conversation today about the bond markets. No matter how high the risk money piles in.

This in part must be due to the fact it has nowhere else to go.

On shares at the bottom end, that's me, I might jump out of the market briefly but I invest in part for the excitement. I'll convince myself of opportunities within months

Then there are funds which have such tight definitions they cannot get out of the market.

And then at the top end billionaire investors who have to create headlines. They can create opportunity where there wasn't any.

I saw today that a group of billionaires are starting a business to mine asteroids! It costs NASA one billion to recover a few grams of dust and yet these fellows see profit within 20 years - no way is that an investment recommendation but they appear to have no trouble getting investors

Making money is a drug :beer:

Thrugelmir

DannyRadclif wrote: »

But in 6 months will this dive have gone even lower? Nothing in the pipeline this time like QE3 or is it 4, that was the only thing preventing a stock market crash last time. The worldwide crisis is getting worse by the day, is this why so many are selling and staying out.?

If China sneezes will the West catch a cold.........

gadgetmind

srcandas wrote: »

Had a similar conversation today about the bond markets. No matter how high the risk money piles in.

This in part must be due to the fact it has nowhere else to go.

I now have negative duration of most government debt with an emphasis on US and UK. My money that would otherwise be in gilts is in hand-picked REITs, infrastructure funds and corporate bonds.

The next 12 months will be interesting.

atush

DannyRadclif wrote: »

But in 6 months will this dive have gone even lower? Nothing in the pipeline this time like QE3 or is it 4, that was the only thing preventing a stock market crash last time. The worldwide crisis is getting worse by the day, is this why so many are selling and staying out.?

try drip feeding into the market, that way you don't have to try to find the bottom.:D