How panic-y have you got ?

cisamcgu

I have a few tracker funds making up my S&S ISA and the last few months have been much worse than the previous 2-3 years. I'm in for the long term, for at least another 10 years, and in no way am I panicing, but I was wondering do other posters have stories about bad times, worrying times or generally OMG moments ?

Andrew :beer:

bigadaj

It's certainly been a lot worse historically, and not many better times for equities than the five or six years up to early 2015.

Barclays equity gilt study is a good reference point for returns, and where the oft quoted statistic of equities out performing cash and bonds and long term returns of equities beating inflation by 5% comes from.

Worst period I'm aware of was early seventies, with opec crisis, wars in the Middle East (sound familiar?) etc, though that was losses of 40% or more though recovered within a few years, and these drops are included within the long term returns.

Apodemus

Before my time as a taxpayer, but I would think that 1968 must have been a bit rough, with investment income being taxed at 136%!

dunstonh

How panic-y have you got ?

None whatsoever.

the last few months have been much worse than the previous 2-3 years.

There was another minor correction similar to current levels in that period. However, this is nothing. This is minor blip.

but I was wondering do other posters have stories about bad times, worrying times or generally OMG moments ?

Wait until your first stockmarket crash. It gets easier after that. About 2 or 3 crashes and it will just be "here we go again".

ChesterDog

Actually, I am quite enjoying it.

In spite of having roughly £500k across equities, bonds and similar - so the amounts involved as markets 'breathe' are pretty big at times - I am always much more engaged in it all when the going is choppy.

Up, up, up is fantastic from a monetary point of view, obviously, but it can get a bit boring.

jamesd

cisamcgu wrote: »

I have a few tracker funds making up my S&S ISA and the last few months have been much worse than the previous 2-3 years. I'm in for the long term, for at least another 10 years, and in no way am I panicing, but I was wondering do other posters have stories about bad times, worrying times or generally OMG moments ?

An OMG moment would be thinking you have to just sit and take the drops, instead of recognising that you don't.

It's currently easy enough to get 12% and more from P2P lending, secured on physical property. Subtract inflation and that's around twice the historic average return of the UK stock market.

The catch at the moment is that there isn't a P2P ISA, that doesn't start, probably, until April 2016. So today you have to wait or take money out of the ISA. Taking money out of the ISA is OK if you'll pay in much less than the annual allowance each year and so can easily put it back in later. If you're always paying in the maximum it's not such a good idea to take any out of the ISA.

At the moment most of my non-ISA non-pension money is in P2P and I'm working on moving the pension money. Come April I'll move the ISA money as well. We've had a nice bull market run, now looks like quite a good time to lock in twice the long term return in P2P to avoid the next big market drop.

Do remember that P2P is investing, even though it pays interest. And that there is no FSCS protection against fraud. As usual with investing, diversification is vital to protect yourself.

My own P2P investing has most recently been done at rates of 19% and 14%, which are occasionally available for secured lending.

It's not often that you get the chance to avoid the equity market drop risk and also get more than average equity returns on your money but now is one of the unusual times when it's possible.

atush

Not at all.

In fact, while I have a large cash pot waiting to be invested, it isn't free for toping up. Otherwise I woudl say times like those just passed are great times to pick up certain funds on 'Sale' as they have been depressed by factors not concerning their profitability.

Thrugelmir

With a 10 year horizon. There's little point in worrying. Keep drip feeding the money in. Then ride the ups and downs.

Don't be greedy when the time to exit the market.

MadMat

Actually quite impressed with how the Woodford fund is riding the dip.

Thinking of increasing my allocation there a little ( adjusting new money - not selling others while they are in the red!)

Mat

Jonbvn

jamesd wrote: »

An OMG moment would be thinking you have to just sit and take the drops, instead of recognising that you don't.

It's currently easy enough to get 12% and more from P2P lending, secured on physical property. Subtract inflation and that's around twice the historic average return of the UK stock market.

The catch at the moment is that there isn't a P2P ISA, that doesn't start, probably, until April 2016. So today you have to wait or take money out of the ISA. Taking money out of the ISA is OK if you'll pay in much less than the annual allowance each year and so can easily put it back in later. If you're always paying in the maximum it's not such a good idea to take any out of the ISA.

At the moment most of my non-ISA non-pension money is in P2P and I'm working on moving the pension money. Come April I'll move the ISA money as well. We've had a nice bull market run, now looks like quite a good time to lock in twice the long term return in P2P to avoid the next big market drop.

Do remember that P2P is investing, even though it pays interest. And that there is no FSCS protection against fraud. As usual with investing, diversification is vital to protect yourself.

My own P2P investing has most recently been done at rates of 19% and 14%, which are occasionally available for secured lending.

It's not often that you get the chance to avoid the equity market drop risk and also get more than average equity returns on your money but now is one of the unusual times when it's possible.

I sort of agree. However, instead of an either/or approach, I prefer to do both, given that p2p is still in it's infancy.

p2p has not yet been through a full economic cycle. Let's see what happens if there is a property market crash, or other similar event.

jamesd

Well, most P2P hasn't gone through a full cycle. Zopa has but Zopa is a place I no longer think it's worth using, it's just not paying enough.

I agree about diversification but it's perhaps worth considering that the P2P I'm thinking of is secured and has either secondary markets to let you sell or short enough loan terms so you can get out pretty quickly anyway. Though the pawn-based P2P lending could be quite interesting in a down cycle, a great time for that type of business. Into pawn lending and out of any housing/retail/property development lending would probably be a good move.

A property market crash would be interesting but with 6-12 month terms for much property P2P I don't think it'll be a big issue even for those heavily into P2P property lending. Those who do mortgages for longer terms could have bigger issues, though. I do expect that developers on the shorter term P2P property deals might have to take significantly lower prices but given the timescale I expect they wouldn't suffer too much. A big retail development rather than housing could be a very different matter, though...

At the moment I think that going mostly into P2P is the better deal. That'll probably change after a big market drop. This saddens me in a way since I like conventional investments as well.