Experiencing my first mini dip as a new(ish) investor

2010

In a nutshell.
The FTSE hit 7000 in Dec 1999 it then started it`s downwards trend and never reached 7000 again until the last year. It`s traded between 7000 and 7400 this year but the trend now is downwards again below the 7000 and beyond.

Apodemus

2010 wrote: »

In a nutshell.
The FTSE hit 7000 in Dec 1999 it then started it`s downwards trend and never reached 7000 again until the last year. It`s traded between 7000 and 7400 this year but the trend now is downwards again below the 7000 and beyond.

Hmmm.... "Trend" is a mathematical and statistical concept and only makes sense if you define the period of analysis.

Judging by eye alone, it looks as if you would be correct if you are quoting a 5-day moving average, which is woefully short to be cited with any certainty of longer-term prediction. And that is just for direction, never mind your "below 7000 and beyond" prediction!

AlanP_2

2010 wrote: »

In a nutshell.
The FTSE hit 7000 in Dec 1999 it then started it`s downwards trend and never reached 7000 again until the last year. It`s traded between 7000 and 7400 this year but the trend now is downwards again below the 7000 and beyond.

Sorry, but I don't get the point you are trying to make or how it relates to the OPs question?

Jeems

Some very interesting replies. Someone above mentioned having long dated govt bonds was a bad thing at this time. Why is this out of interest?

So this article was helpful - http://uk.businessinsider.com/how-the-ftse-100-performs-when-the-bank-of-england-raises-rates-2015-2

So basically, sometimes the market rises and sometimes the market dips when there is a rate rise.

What about currency though? Most of my holdings are overseas (10% UK, of which many are international corporates anyway via a FTSE All Share tracker).

So while interest rates may or may not affect things, if the £ continues to rise, can I expect to see more red minus signs?

ColdIron

2010 wrote: »

It`s traded between 7000 and 7400 this year but the trend now is downwards again below the 7000 and beyond.

Odd, I always thought markets were driven by events. You speak as if it is pre-ordained (Thus it is written ...). When do you predict it will hit 0?

ChesterDog

2010 wrote: »

In a nutshell.
The FTSE hit 7000 in Dec 1999 it then started it`s downwards trend and never reached 7000 again until the last year. It`s traded between 7000 and 7400 this year but the trend now is downwards again below the 7000 and beyond.

Only true if you suck the dividends out of it.

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dunstonh

Will things settle down?

No. Never.

There are always things going on that create upward and downward pressures. You then have the irrational element of human behaviour.

When todays news becomes history, there will be tomorrows news.

ChesterDog

Jeems wrote: »

The numbers are very red and lots of minus signs but I dont feel concerned. I'm still up this year (just about).

But wow, does the strengthening of the £ and the potential interest rate rise really affect share prices that much? Will things settle down? When the £ was strong and interests rates at 5%+, I imagine share prices didnt tumble daily. How did the market react then?

What can I expect in the near future with continued £/interest rate rises?

Share prices react to surprises, changes, news and so on.

When conditions are stable (no matter whether that's low interest rates, high interest rates or anything else) markets settle down again.

So, no, when interest rates were 5% share prices didn't tumble daily. It's only when a change occurs (or becomes expected) that markets move significantly and quickly from their normal trend.

Edit: As Dunstonh says, settling down is itself a very transitory state at best - something is always coming over the horizon.

A_T

Jeems wrote: »

So while interest rates may or may not affect things, if the £ continues to rise, can I expect to see more red minus signs?

Probably yes. The companies in index trackers are largely invested abroad. Unless the growth in those stocks outstrips the rise in sterling.

captainreckless

Jeems wrote: »

What about currency though? Most of my holdings are overseas (10% UK, of which many are international corporates anyway via a FTSE All Share tracker).

So while interest rates may or may not affect things, if the £ continues to rise, can I expect to see more red minus signs?

This is pretty much my situation as well. When the £ fell after the brexit vote my portfolio was going up like gangbusters. I had to keep reminding myself that this wasn't because I was some sort of genius investor and that soon enough things would start heading in the opposite direction.

My portfolio was down about 2.5% yesterday. My guess is it'll fall further. Then go up. Or go up and then go down. By how much and when? I haven't a clue. C'est la vie. With a thirty year investment horizon it's just numbers on a screen at this point.