Has the stock market peaked?

Biggles

JohnRo wrote: »

I find it helps to get a better perspective when looking at inflation adjusted peaks and troughs.

It helps to get a better perspective when the graphs fit on the screen.

atush

danlightbulb wrote: »

Hi all,

I recently posted in the pensions section about my pension pot and how I have the option to choose which funds my money is invested into.

If Im invested in equities through my pension fund, and equities have peaked (i.e stock market has peaked), then I should move my money into bonds or cash, wait for the correction, and then put the money back into equities to benefit from the next growth cycle.

So have equites peaked? I know this is a question only really answerable in hindsight. But when I search around the internet on this subject, there are so many investors/experts on the subject highlighting so many signs that it has peaked and will shortly begin to correct.

Interest rates, price to earnings ratios, typical length of bull cycles being exceeded. These are just some of the things I am reading about.

I'm not looking for someone to say its X,Y or Z. Everyone will have their own strategy. But what are the general feelings of people? What do people think?

Dan

Has it peaked forever? No. Has it peaked for this cycle? Maybe.

But as you are starting a pension, now is not the time to try and 'time' the market. As bonds are also in a bubble, and cash returns close to nothing.

If you invest monthly, a downturn would be good news for you, buying more units/m with your money.

So invest where you want for the long term, dont try and time the market.

Malthusian

There is a tale that Harry Markowitz, the Nobel Prize winning inventor of modern portfolio theory, split his real life portfolio 50:50 between equities and bonds.

It wasn't quite as simplisic as that. 50-50 equities-bonds was his default position at one point but he also stopped allocations to one sector at certain points when he felt he had enough. Later he made modest gambles on particular sectors that paid off but wouldn't have ruined him if they hadn't. He sold commodity funds just before the crash - not because he had some special insight, but because he needed the money at that moment to buy a flat. In other words his investment strategy was not dissimilar to that of most people on this board.

I don't think there's anything particularly unusual about an economist's portfolio being an accumulation of historic fancies - like most of their fellow DIY investors - rather than a meticulous analysis of covariances on the efficient frontier. How many dentists do you know who do dentistry on their own mouths?

JohnRo

Biggles wrote: »

It helps to get a better perspective when the graphs fit on the screen.

Hold down CTRL and press + or - to suit.
Or failing that get yourself a 21:9 monitor.

[Deleted User]

ukx has to go to hold 6370 through eod. Next target 6400 seems a long way off. I decided to sell my whole portfolio of stocks late this afternoon, now I will sit on my hands and buy lower. Really nice to wrap up at a profit and to hold that profit.

Linton

kittie wrote: »

ukx has to go through 6400 with considerable momentum, if it is to proceed positively and that really had to happen today by eod. I decided to sell my whole portfolio of stocks late this afternoon, now I will sit on my hands and buy lower. Really nice to wrap up at a profit and to hold that profit.

No it doesnt and no it didnt. It will do what it will do, which could be anything. Taking into account dealing costs and time out of the market with loss of dividends and possible failure to get back in at the right time will the exercise have been worth while. Who knows? If you dont need the cash now what is the point in paying to convert into it?

ManofLeisure_2

kittie wrote: »

Really nice to wrap up at a profit and to hold that profit.

I agree that it's nice to make a profit, but then ''where'' to place that cash becomes a problem. Particularly if it is a significant sum of money.

[Deleted User]

Linton wrote: »

No it doesnt and no it didnt. It will do what it will do, which could be anything. Taking into account dealing costs and time out of the market with loss of dividends and possible failure to get back in at the right time will the exercise have been worth while. Who knows? If you dont need the cash now what is the point in paying to convert into it?

I wrote my post in a hurry and altered as soon as I realised. I did mean 6370 and yes it did, so I cashed in a good overall profit on 18 stocks. Nice big lump of cash in the sipp now and will spend time tonight working out targets for limit buys which I will set and then I will walk away while ukx does what it will

I have always worked like this and it works extremely well for me, having doubled portfolio value since I took it over in 2006. It will take several hours of chart work this evening but I can log them as limit buys as I progress. The limits will extend as far in the future as possible, I think a good month maybe longer

ruperts

If you're worried about what pundits are saying just look at what they were saying in previous years. Very easy to find on google. For example, this is from the USA when in June 2013 they had lots of apparently great reasons to know there was a crash coming by the end of the year:


http://www.marketwatch.com/story/doomsday-poll-87-risk-of-stock-crash-by-year-end-2013-06-05?page=1


S&P500 on June 5th, 2013: 1,609
S&P500 at year end: 1,848
S&P500 now: 2,030


If you would have taken their advice and cashed out on June 5th 2013 you'd still be waiting for a time to get back into the market, and in the meantime you would have lost out on 26% growth on 2.5yrs of dividends.


The S&P500 has corrected by about 10% lately but you would still need another 20% major correction to get back down to where it was in June 2013. You would have already been waiting years and you might still have years left to wait.

racing_blue

Malthusian wrote: »

I don't think there's anything particularly unusual about an economist's portfolio being an accumulation of historic fancies - like most of their fellow DIY investors - rather than a meticulous analysis of covariances on the efficient frontier. How many dentists do you know who do dentistry on their own mouths?

Thanks for the link. It's an interesting thought. I don't know any economists but I know rather too many dentists, and I bet I could surprise you on the dentistry angle. Economists don't even need a mirror.

I agree that it would be wrong to assume that a successful economist will be a successful investor, or that a successful investor is somehow an economist. Nor to assume that an optician has perfect eyesight.