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

noclaf

I had been planning to pull my money out for a while,hindsight is wonderful! problem is I had a fairly big lump invested.if I was drip feeding a small percentage of my salary monthly then wouldnt be as bothered but with large sums of money invested you are more exposed to big losses when a share tanks..I am learning slowly though.
UTW- bought this earlier in the year, it immediately dropped 25% but I held my nerves and it then came back up, sold out for a 35% profit. however recently the losses have been sustained due to the various global factors, China, Ukraine,Middle East, Ebola and had to get out now due to my own circumstances.

WobblyDog

I'm going to carry on drip-feeding my FTSE All-Share tracker at the same rate as before. I'm very confident in my lack of ability to predict the future better than the average market participant, so I see no point in responding to the current market behaviour.

Ryan_Futuristics

A great exercise - and one that makes it easier to deal with dips in the market psychologically (and hence not react in a knee-jerk manner) - is to work out your risk tolerance, or maximum drawdown, first

Let's say you've got £100k to invest; and the biggest (short-to-medium-term) dip you're likely to experience in the markets is 50%

How much of that £100k can you bear to be down? If it's £25k, then that tells you you want to be 50% invested in equities (with £50k in equities, on a bad dip, your whole portfolio will still be worth £75k)

So should you just drip-feed money into a tracker?

Drip-feeding is certainly a good idea in these markets - when a much larger correction is still due (this might be the beginning of that correction now ... We can't time markets reliably, but we can calculate risk) ... But I'd be hesitant to put all my eggs in one basket ... If you're tracking an individual market, there's always more risk a dip can last a long time

For me, the safest 'passive' investment to trickle money into is a globally diversified, dividend-paying investment trust with a very long track record (I often mention Murray International as being my favourite - despite being a bit pricey and prone to good and bad periods)

A FTSE All Share tracker is much more of a conviction bet, to me ... You'd only need the UK's economy to slide (and with our debt and trade deficit) for these shares to be a less than stellar long-term investment (it's naive to assume the UK and US are always going to be the darlings of the global markets)

An international ex-UK tracker too then? If you think global growth is any sort of reliable bet now ... Personally, I think we're moving into a transitional period, where many large markets are likely to slow down or go into decline, so for me it's about finding value (or letting a fund manager find value for you ... Just my own conviction)

Thrugelmir

Ryan_Futuristics wrote: »

A FTSE All Share tracker is much more of a conviction bet, to me ... You'd only need the UK's economy to slide (and with our debt and trade deficit) for these shares to be a less than stellar long-term investment (it's naive to assume the UK and US are always going to be the darlings of the global markets)

What proportion of the FTSE constituents income is generated from overseas?

Ryan_Futuristics

Thrugelmir wrote: »

What proportion of the FTSE constituents income is generated from overseas?

Less than the CAC40 (79%) and it hasn't made France a good investment

masonic

Thrugelmir wrote: »

What proportion of the FTSE constituents income is generated from overseas?

I guess that also raises the questions:-
who are our biggest trading partners and what are the prospects for their economies?
and is there an expectation that we will be able to compete for and win similar amounts of overseas business going forward?

Ryan_Futuristics

masonic wrote: »

I guess that also raises the questions:-
who are our biggest trading partners and what are the prospects for their economies?
and is there an expectation that we will be able to compete for and win similar amounts of overseas business going forward?

A lot of our foreign trade is exporting oil & gas to emerging nations - and there's the prospect of some of them becoming more self-sufficent ... Interestingly Neil Woodford's avoiding our biggest energy firms (BP and Shell)

After that you're mostly left with banks, pharmaceuticals and tobacco

There's not much optimism around UK and global economic prospects ... QE and some of the lowest interest rates in history have made it very hard to work out whether we've seen much real growth or whether we're just buying at increasingly stretched valuations ... But as long as there are undervalued regions and sectors, there should still be growth to be found (I'm just not confident a FTSE All Share or Developed World-ex-UK tracker will find much of it ... But then I'm a pessimist)

Glen_Clark

Thrugelmir wrote: »

What proportion of the FTSE constituents income is generated from overseas?

I recall Questor in the Telegraph recently saying it was 70%.
But I did not save a weblink.
We have to remember that most of the value of the FTSE is in a few very big companies like Shell, Vodafone, and HSBC, which do a lot of business abroad.

Glen_Clark

Ryan_Futuristics wrote: »

Neil Woodford's avoiding our biggest energy firms (BP and Shell)

We tended to think of these huge long established oil firms as safe.
Yet they depend on the price of a barrel of oil that is impossible to predict.
And what could be more risky than drilling for oil?
But then what is really safe?
Nothing as far as I can see.
So you just have to have a bit of each and diversify.

C_Mababejive

There is an argument for preserving wealth by profit taking in the recent climate.

Many oil producers also produce gas .