How panic-y have you got ?

Mikey17

What does a crash look like ? Does it start like it is now, and gradually get worse, or do things just fall off a cliff. I unfortunately put some inheritance money into VLS 60 in April, which has lost about 8%. I had some in previously , so I guess I am back to square one. To be honest I'm not cut out for investing. It's causing concern. I hear the golden rule is not to panic, but I feel if things get a lot worse , the stress would be quite painful. I don't need to access the money invested , my house is paid for and i have savings too. However for me personally I am seriously thinking of getting out very soon.
Please no cruel comments

A_Flock_Of_Sheep

Another panicky shares thread! This correction seems to be making the wobblers come out of the woodwork.

A_Flock_Of_Sheep

No matter what the market is doing, Hargreaves Lansdown always have the "Invest Now" button for folk to click.

dunstonh

What does a crash look like ?

it can be a short term drop over a week. It can be a double dip (like we saw with the credit crunch where a big drop happened in September and then a larger drop in March). Or it can be more like the dot.com (and other reasons) decline at the turn of the millennium which saw a drawn out decline over years with a series of events chipping away.

I unfortunately put some inheritance money into VLS 60 in April, which has lost about 8%.

VLS60 has loss potential of around 25-30%. So, 8% is barely a scratch.

To be honest I'm not cut out for investing. It's causing concern.

So, why did you pick a medium to adventurous fund?

However for me personally I am seriously thinking of getting out very soon.

I dont want to sound cruel but sometimes you need to be cruel to be kind.

It is a common mistake of new DIY investors to invest above their risk profile. You sound as if you have done exactly that. You are worrying with an 8% loss but have a fund capable of losing 3-4 times that amount. Its not a matter of if it happens but when it happens. It may not be this year, next year or the year after but it will happen at some point.

I know the mantra of some on this board is to not use an adviser as it will cost you money but you are a good example where it probably would have been better as you would more likely have ended up in a more cautious fund after proper risk profiling.

The markets are doing what the markets do. This is nothing new. Nothing unusual. Indeed, we are really overdue this sort of activity based on average occurrences of crashes. This could be just the half way point in the decline (or more if its a repeat of the dot.com or credit crunch).

However, what goes down comes up and what goes up comes down. The year after the final drop in the credit crunch decline was the best year on record for the stockmarkets. There is usually a bounce before the steadier level of recover takes over. So, pulling out is usually the worst thing to do.

its only a loss when you sell the investment. In the interim its only on paper. Stop looking at the value for a year or two and you wont worry.

A_Flock_Of_Sheep

With further heavy losses to come folk are stupid to be buying equities at this time.

Glen_Clark

Mikey17 wrote: »

What does a crash look like ? Does it start like it is now, and gradually get worse, or do things just fall off a cliff. I unfortunately put some inheritance money into VLS 60 in April, which has lost about 8%. I had some in previously , so I guess I am back to square one. To be honest I'm not cut out for investing. It's causing concern. I hear the golden rule is not to panic, but I feel if things get a lot worse , the stress would be quite painful. I don't need to access the money invested , my house is paid for and i have savings too. However for me personally I am seriously thinking of getting out very soon.
Please no cruel comments

Where would you put the money if you took it out?
Not being able to suggest anything better, I suggest you leave it where it is.

EdGasket

Glen_Clark wrote: »

Where would you put the money if you took it out?
Not being able to suggest anything better, I suggest you leave it where it is.

If you are risk-averse you could buy a short-dated gilt but the return is only about 1%.

EdGasket

Nice chart on this link showing crashes since 1957 but the trend continues relentlessly upward:

http://www.bloombergview.com/articles/2015-08-24/how-serious-is-the-stock-market-s-decline-

I guess the problem is that if you have some smaller stocks like for instance oilies or miners right now; they can get completely wiped out in a crash. If you have index trackers then there should be not much to worry about unless the doomsayers are correct and this crash does in fact turn out to be 'one remembered for 100 years':

http://www.dailymail.co.uk/news/article-2932273/Bet-shares-fall-says-City-tycoon-millions-predicting-credit-crunch.html

However I think if central banks are prepared to print money, which they are, then they have NOT run out of 'monetary firepower' as the article suggests.

jem16

A_Flock_Of_Sheep wrote: »

With further heavy losses to come folk are stupid to be buying equities at this time.

When would you suggest they buy equities? When they're looking good and heading back up?

What is stupid is trying to time the market as you're unlikely to predict correctly.

bowlhead99

A_Flock_Of_Sheep wrote: »

Another panicky shares thread! This correction seems to be making the wobblers come out of the woodwork.

That's right, the wobblers and trolls always turn up when markets move, spouting misguided panicky nonsense like:

A_Flock_Of_Sheep wrote: »

With further heavy losses to come folk are stupid to be buying equities at this time.

:doh:

Thanks for playing your small part in any crash to come.