Current market carnage - anyone selling or buying?

JohnRo

I wonder what the antithesis of doom monger is and also why doom monger is used in a pejorative way when stating a few uncomfortable truths. The major market indexes are down significantly this year from recent peaks whether you agree or not.
The fact that markets around the globe need to be propped up with ongoing counterfeit currency injections is not something that fills me with confidence in their health much less to be celebrated but time will tell how it all pans out, the US is on the brink of recession, with their industrial sector already in one by most measures. How much that will affect stock prices remains to be seen as a lot of it is already being priced in.
The US stock index has been flattered by the big global four in recent months while under the surface things aren't quite so rosy as MSM would have you believe.

Thrugelmir

Sam_J12 wrote: »

For example, the Vanguard Lifestrategy 60% fund that is popular here is no lower than 3 months ago,

Apples and Pears.

This is an accumulation fund so NAV includes reinvested income.

Fund is split 60% Equities and 40% Fixed Interest.

As for performance up 7.61% over 3 years (total return).

As a direct comparison Scottish Mortgage Trust is up over 51% in the same period with no income reinvested.

Sam_J12

Thrugelmir wrote: »

Apples and Pears.

This is an accumulation fund so NAV includes reinvested income.

Fund is split 60% Equities and 40% Fixed Interest.

As for performance up 7.61% over 3 years (total return).

As a direct comparison Scottish Mortgage Trust is up over 51% in the same period with no income reinvested.

Its entirely reasonable to use VSL as an example since most investors will have a fixed income exposure, and VSL60 is the probably the most recommended fund on the board. A quick check shows VSL100 appears to have gone up over last three months and is about even over 6 months. As it happens I had a 100% equity exposure before this "carnage" and the carnage has not affected me either. It's all just normal volatility.

No idea why you are talking about VSL performance over 3 years or the Scottish Mortgage Trust (and VSL60 return is not up 7.61% over the last three years, I am guessing is the annualised figure which is a decent return as it happens).

bowlhead99

JohnRo wrote: »

Good for you, I doubt many can say the same though.

Most of the major market indexes are still 8-15% off their recent peak. Obviously that has little to do with portfolio bottom line for many but you seem to imply the turmoil is over which I disagree with.

Well, if you think many can't say the same (about not being down) because main indexes are off their peak, that presumes you think there aren't many departing from holding the main big companies in their index proportions.

But I think it is evident that many do, not just Sam as an example - as some posters including IFAs are usually very keen to point out that (for example) FTSE 100 is a terrible choice of index on which to base or bias your portfolio with a record of underperformance against other indices and lack of diversification.

I don't think there has been a suggestion that the market turmoil is "over" but if people's portfolios are not materially down *yet* -or they have been down for a few weeks and then recovered (notwithstanding that they may of course be down next week or next month depending what comes down the line next) -then I agree that we are hardly beset on all sides by carnage.

Of course, things that are off their peak have "suffered" but markets have never gone up in a straight line which is why it's not a new peak every single day. FTSE (and others) are below their peaks of last April, certainly (although the headline digits don't tell you what dividends they paid) but that is not "carnage" either, because last April was ten months ago and to drop over 10 months (rather than ten days or ten minutes) is not a nail biting thrill ride for me or for other seasoned investors like yourself.

I think broadly if something like a VLS portfolio of whatever equity/bond mix is flat or up over 3 or 6 months, and includes the major international indices, then we are probably not in enough carnage to be running for them thar hills just yet. The picture did look bleaker a few weeks ago perhaps. If markets are down 2% tomorrow and another 2% the day after, some people will cry carnage because it could continue like that for another month for all we know. But often, it doesn't.

JohnRo

You're conflating a few things to make a long winded post over a shallow point that's really not worth making.
No one is running for the hills, the post I made was simply in response to a claim that recent highs have been re-established, referring in the process to market turmoil probably not being over and that a good few people, probably most, won't be able to say their portfolio has recovered from the recent turmoil and/or returned to it's recent peak as claimed.
Has yours?

masonic

Mine hasn't.

And one thing we can say almost for certain is that we haven't seen the last of the market turbulence of 2016.

bowlhead99

JohnRo wrote: »

and that a good few people, probably most, won't be able to say their portfolio has recovered from the recent turmoil and/or returned to it's recent peak as claimed.
Has yours?

Mine at end of January is not far off what it was at end of December, less than 5%down anyway though i don't have an exact figure. There are some ups and downs within that but i can think of a couple that were off 10% a couple of weeks back and have recovered half of it. It's still broadly down from last April.

Anyway, not wanting to play semantics too much but you did say you "doubt many could say the same" implying that Sam had achieved a pretty rare result. Whereas honestly, I do think there will be quite a few in that position. Granted "probably most" won't be able to say they have fully recovered, as you're now putting it.

But much of the earlier part of the thread was "oh no, the sky is falling" contrasted with "chill out, don't worry about it, markets do this" and comments made tongue in cheek on both sides. In the context of the thread it's not so surprising that someone comes back, shrugs and says "dunno what all the fuss was about". To me, that's more refreshing than doom and gloom and any semblance of recovery being pooh poohed with "ah, but that's just a counterfeit currency injection".

I do agree, as mentioned, that we are not "out of the woods yet" but then we never have been in the last six years as it has all been propped up with easy monetary policy. Still, plenty of money has been made in that time.

ChesterDog

I am 4.8% down from the start of the year, but up the same amount over the last twelve months.

Edit: For those for whom working with figures doesn't come naturally, that doesn't mean one cancels out the other. :-)

TheTracker

"Well balanced investment portfolios flat over 12 months, down several percent over one month"

"Market carnage as FTSE 100 drops 4% Monday, down 10% in a week, analyst says to sell now"

Which headline do you think sells the most newspapers and gets the most page views?

My favourite are the cause and effect headlines even on esteemed news channels: "Dow drops X points over fears of Y", "FTSE buoyed by news of Z". Rubbish.

It is not just finance that gets this treatment. Politics, crime, education, health, it's the same scare stories that are not factually sound or meaningful.

On a quick reckoning I'm down about 1% in January and that's with a boring portfolio of trackers.

By the way we will never be "out of the woods". The market is the woods, that's why we are rewarded with returns.

vmp

FTSE back below 6000, down over 16% from its 52 week highs :eek:

Quick, where's a friendly Canadian central banker to print some more money and pretend everything's A-OK when the euphoria-mongers need him?