Correction or bear market in stocks this year?

economic

What is everyones thoughts on the stock market this year? good to to derisk some of their portfolio and stay in cash for now? i think it looks more and more like a good idea.

also what sectors do you think would outperform in the next few years? i think banking, biotech, energy, commodities.

discuss.

AnotherJoe

Why just those two choices? (Correction or bear market) Why not also, not much happens, or bull market as choices?

I am betting in a small way that health and biotech in particular will do better than average, over the next 10+ years. This particular year, I wouldn't like to guess, same as any other year. Commodities, I'd have thought, had their run last year.

However, I am guessing geography-wise, I have "bailed out" of the UK into more global stocks, changing my allocation from perhaps 25-30% down to maybe 5%.

jimjames

Yes I'm sure there will be a correction. Just like there was in 2016. Good luck trying to time it, as with 2016 you're unlikely to know when it starts or ends.

ColdIron

Which market? UK, USA , Europe, Japan, EM or Asia Pac could, and likely will, go in different directions. I could try to second guess them all but I'm as likely to make a bad call as a good one. Keep calm and carry on is my plan. I certainly won't be moving into cash, that tactic did no favours to those that did before EURef

Linton

Dont derisk on the basis of past events or a guess at future events especially over as short a timescale as a year or two. Set up your portfolio so that you can accept the consequences no matter what reasonably plausible event happens.

The problem with staying in cash for a while is what do you do if your prophesy of doom doesnt happen and prices continue to rise? If prices were to fall, possibly after a large rise, how will you know when its safe to buy in? And in the meantime you are losing dividends.

As to what sectors are likely to outperform: over 5 years or less, could be anything. With a 20 year timeframe I would put money into biotech, raw materials and EM. But only as a tilt in a portfolio that tries to invest in everything. Rather more significant is my large, relative to a global tracker, investment in small/medium companies. These have outperformed the main indexes for many years.

dunstonh

What is everyones thoughts on the stock market this year?

Who knows?

It shouldnt really matter either as your investment strategy shouldnt be affected by either of those things (and they are not the only things that could happen).

also what sectors do you think would outperform in the next few years? i think banking, biotech, energy, commodities.

Who knows?

It shouldnt really matter either as your investment strategy shouldnt be affected by this.

Pincher

I am expecting Donald Trump to create some truly spectacular ups and downs, until people realise he's an idiot, and he will be impeached by his own supporters, before their wealth is irrevocably destroyed. Gross incompetence? Dangerous ineptitude?

Economic chaos from Trump fiasco. Re-election, Hillary Clinton on the throne. Proper recession from 2018.

Keep_pedalling

Pincher wrote: »

I am expecting Donald Trump to create some truly spectacular ups and downs, until people realise he's an idiot, and he will be impeached by his own supporters, before their wealth is irrevocably destroyed. Gross incompetence? Dangerous ineptitude?

Economic chaos from Trump fiasco. Re-election, Hillary Clinton on the throne. Proper recession from 2018.

Should his impeachment come to pass it will be President Mike Pence who apart from being a religious nut, we know very little about.

Exerbusi2

I'm staying in the market, but I've moved a lot of my portfolio to dividend-payers.

I'm de-risking, but that's in part because my portfolio is small so I have to protect it.

I've put money into defensive stocks such as National Grid, Vodafone and Centrica.

Broken_Biscuits

I've seen in forums people who moved their money out of shares because of the expected downfall. They would write something smart like... We are at (another) all time high don't you know? Their like minded forum friends would give them all the thumbs for having the foresight to make such good decisions before the inevitable fall.

Then the markets go up and people would comment about the gains they missed by cashing out early. They would reply with something clever like... ah but the markets haven't risen, the pound has fallen giving a false impression of gain. All the thumbs would be out in force for such a clever observation again.

But unfortunately the reality was that prices did go up though and by pulling out early they missed those gains. Potentially enough gains to weather any falls that might or might not be around the corner.

Hold some cash and top up in dips if it makes you feel safer, but you would expect holding a balanced portfolio, weighted towards the risk you are comfortable with, will come good over time.

Someone with a 30 year or more window to the end of their working life should be thinking more about accumulation than preservation.

laidbackgjr

Sticking to my normal strategy - drip feed money in regularly and continue to diversify and re-balance as my portfolio grows.