Crash Bang Wallop

Chargem

Glastoun wrote: »

There was a comment in another thread that when the crash comes, retail investors won't be able to get their money out fast enough. Given that most funds/shares can be sold within 24 hours, I'm guessing the problem will be actually realising that there's a problem, and how long it might last for.

For those that were invested in 2007/08, when did you realise something was up, and what did you do about it? Did anyone just watch their funds drop week by week? Does anyone regret what they did/didn't do based on information they had at the time?

An argument for just staying in the markets:

http://www.businessinsider.com/dow-jones-idiot-maker-rally-2013-3?op=1

(found this link in the monevator comments section)

redbuzzard

>>I've read a few reports recently saying the ease of money lending and covenant quality are getting back to 2007 pre crash levels. (JohnRo)

I'm not sure that banks are getting much more adventurous, though I'm a bit out of touch now. A corporate treasurer told me last year that businesses would have to reduce their dependence on banks and find other ways of funding, taking what opportunities there are to issue bonds, extend payment terms, delaying cash distributions etc. The business in question has certainly done that, or been obliged to.

Certainly bond funding is looking good value for the issuers.

Pal of mine, somewhat younger than I, put a large chunk of his pension in BT 2028 at 8% YTM a while back, intending to hold for the duration. Currently sub 4%, not sure if he's succumbed and sold it yet. I wouldn't be surprised if he still has it, I think he has an "adequate" fund so is more concerned with managing risk than anything else.

gadgetmind

Glastoun wrote: »

it’s not just a continuous downward slide, there are periods of stability in there too.

Yes, and at no point is it obvious whether we've hit the (localised!) bottom or not.

jabba42

You have more and more buyers coming in and at some point there will be no more buyers, the music stops, people look around in fear and stampede for the exits.

I honestly feel sorry for people buying now if this is their first ever investment.

gadgetmind

jabba42 wrote: »

at some point there will be no more buyers, the music stops, people look around in fear and stampede for the exits.
.

That's not generally the case with equities as you can continue to hold for the yield. The lack of new buyers (not that it really happens) doesn't really trouble those who are not forced sellers.

The time when people really stampede is when there is already a huge amount of doom and gloom and the odd black swan drifts into view. At times like these, those stampeding out drop diamonds in their haste, which is when you can pick up some real bargains.

colinjd

Quick question...

Whilst researching various funds for my ISA I noticed that around July / August of last year there was a significant and sudden drop in a lot of funds values (10-15%).

Because I wasn't in the market at the time I'd be interested in knowing if there was a particular reason for that drop, at that time? I can't think of anything specific economically that might have caused that, so I'm obviously missing something!

Thanks

Wobblydeb

Glastoun wrote: »

There was a comment in another thread that when the crash comes, retail investors won't be able to get their money out fast enough. Given that most funds/shares can be sold within 24 hours, I'm guessing the problem will be actually realising that there's a problem, and how long it might last for.

It is actually easier for retail investors to get out quickly. You can offload small volumes of shares for a reasonable value in dropping markets. Massive volumes? Forget it, even in a stable market.

Glen_Clark

redbuzzard wrote: »

put a large chunk of his pension in BT 2028 at 8% YTM a while back.

I am sure BT is as safe as anything else in Britain, certainly whilst a Tory Government is in power. Don't want to get political but everything depends on politics - asset markets have been transformed by money printing. Under the terms of the Tories botched Privatisation the taxpayer is on the hook for BT's pensions liability (up to £100bn) if BT went bust. The political embarrasement of this ensures the Government will continue to allow BTs abuse of its landline monopoly and if necessary find other ways to subsidise BT like they do the banks.

JohnRo

colinjd wrote: »

Quick question...

Whilst researching various funds for my ISA I noticed that around July / August of last year there was a significant and sudden drop in a lot of funds values (10-15%).

Because I wasn't in the market at the time I'd be interested in knowing if there was a particular reason for that drop, at that time? I can't think of anything specific economically that might have caused that, so I'm obviously missing something!

Thanks

Greek election euphoria ran out of steam when people realised all the same problems still existed. Spanish banks needed a bailout and contagion panic took hold, also seem to recall a lot of talk and fear about Italy at around that time.

Then ECB Draghi started talking about doing whatever it takes and printing money like a lunatic through OMT. Also coincided with central banks around the world firing up their printing presses like never before.

Glen_Clark

sorry duplicate post - I am on a wi fi connection that keeps cutting out