What's happened to my portfolio in the last 2 weeks?!

joerugby

Interesting article today on HL website

http://www.hl.co.uk/news/articles/are-recent-market-falls-cause-for-concern-or-a-buying-opportunity

puk999

A_Flock_Of_Sheep wrote: »

One thing I will say is in my experience you think your risk aversion is greater than it actually is.

Just checking what you're suggesting... Do you think people often invest beyond their real risk tolerance?

A_Flock_Of_Sheep

puk999 wrote: »

Just checking what you're suggesting... Do you think people often invest beyond their real risk tolerance?

I mean people think their risk tolerance is greater than it is. And in that I speak from experience

ColdIron

joerugby wrote: »

Interesting article today on HL website

http://www.hl.co.uk/news/articles/are-recent-market-falls-cause-for-concern-or-a-buying-opportunity

Unsurprisingly Mark Dampier sees the current situation as a buying opportunity. It'll be a cold day in hell when he says anything other than that

guymo

ColdIron wrote: »

Unsurprisingly Mark Dampier sees the current situation as a buying opportunity. It'll be a cold day in hell when he says anything other than that

A cold day in hell is a buying opportunity for shares in Hades based cold drinks and ice cream suppliers.

IronWolf

I am a pretty risk averse person, I won't risk money if I think there is some chance of me losing anything. I don't think risk aversion and tolerance of losses is the same though.

I like to think I have a strong stomach when it comes to the market. I'm holding 6 shares down over 12%, 4 of them over 20% and one over 50%.
There's 2 I think I called it wrong, still optimistic about the others

I hold 18 shares in total so those 6 are significant, but the biggest loss I've actually realised in the last few years is -2.4%, average sale has netted +59% annualised.

Last few years have been good times, I expect my portfolio to hold up well in bad times too though.

Freecall

The psychology and perception of investing is interesting.

Invest a £10,000 in investment A. Some time later it has grown by 10% so now worth £11,000.

Now invest another £10,000 in investment B. The market falls by 5% so now A is worth £10,450 and B is worth £9,500.

Which investment feels best? The one showing a £450 gain or the one showing a £500 loss?

My advice, sit back and relax. If the decision you made was correct for your needs at the time then it still will be (unless your circumstances have changed of course).

gkerr4

Freecall wrote: »

The psychology and perception of investing is interesting.

Invest a £10,000 in investment A. Some time later it has grown by 10% so now worth £11,000.

Now invest another £10,000 in investment B. The market falls by 5% so now A is worth £10,450 and B is worth £9,500.

Which investment feels best? The one showing a £450 gain or the one showing a £500 loss?

My advice, sit back and relax. If the decision you made was correct for your needs at the time then it still will be (unless your circumstances have changed of course).

absolutely! - very interesting.

to take your example a little further - if opportunity 'C" came along and you 'needed' some funds to buy into it - which would you sell?

i suspect most would sell 'A" and bank the profit?

course, there's a lot more to it than 'A' versus 'B' - but its interesting.

Eco_Miser

PenguinJim, Linton, puk999 - Thank you for answering my question. Your detailed answers differ considerably from the simple investments are for 5+ years opinions normally given.

margaretclare

I read Mark Dampier's article with great interest, but I also read one yesterday from H-L about getting rich slowly. As opposed to get rich quick i.e. winning the lottery etc.

Cast my mind back to the 1960s when I first encountered the idea of unit trusts under the Save&Prosper banner. DH also discovered these at around the same time and, like me, he couldn't find the spare cash to start a plan. The idea was: £20 a month over a long time, what is now called getting rich slowly. Neither of us did it, but it's interesting that we both had the same idea decades before we actually met.

If you're buying units the principle is that when the markets go down you're actually getting more units for the same value. Don't, whatever you do, think of taking money out when the markets are down. Put more in, as much as you can afford.

I've increased my holdings by about £10K since 2006, and that includes taking approx £5.5K out last year to fund some private surgery.

I just wish I'd done it all those years ago.