Correction in progress!

bostonerimus

There will be many 10% drawbacks in any stock market portfolio, and several 20% or 30% crashes in a lifetime. All our talk about asset allocation and sensible withdrawal rates are based on these downs as well as the ups. So for all those either selling into a downturn or who have been sitting on cash and have missed out of the gains you probably won't come out ahead. People who stay onvested and manage a sensible allocation through the ups and the downs have the best chances of success.

capital0ne

bostonerimus wrote: »

There will be many 10% drawbacks in any stock market portfolio, and several 20% or 30% crashes in a lifetime. All our talk about asset allocation and sensible withdrawal rates are based on these downs as well as the ups. So for all those either selling into a downturn or who have been sitting on cash and have missed out of the gains you probably won't come out ahead. People who stay onvested and manage a sensible allocation through the ups and the downs have the best chances of success.

Couldn't have pit it better myself - cheers:beer:

capital0ne

george4064 wrote: »

What constitutes as 'large sums'?

Previously I had about 11% cash in my ISA, now its down to 8%. The other cash on the sidelines I was referring to cash in P2P, current accounts etc. which I would be happy to move into ISA if things turn nasty.

Very true, £m would be peanuts to WB or EM, but I know most of us on here wouldn't be investing much more than £5-20k - small beer really - might as well have been invested rather than having cash sitting around losing 3% due to inflation!

cloud_dog

Audaxer wrote: »

Whether markets fall further or start to rise again soon, I assume markets will eventually get back to and surpass the previous highs, as over the long term markets should continue to rise.

Have a look at this Yahoo page for the S&P 500 index, specifically the table at the bottom listing the size of corrections over the years and the length of time to recover back to the pre-correction level.

bowlhead99

fun4everyone wrote: »

Deutsche bank share price below it's lows during the GFC. Please go bust.

Why, do you have a bet on it? Otherwise it doesn't sound like the kind of event that would help you out financially, unless you think another global financial crisis is the ideal thing to happen to our economy right now.

FWIW on Monday I'll have held my Deutsche Bank shares for exactly two years, having bought at about EUR 13, and they closed at 12.5 today. I sold over half of them for about 40% profit within a month of buying them and kept the rest. Maybe I should take a look at them again over the weekend and perhaps buy more, just so I can 'laugh all the way to the bank' (pun intended) in the faces of those who for some reason want another financial meltdown.

fun4everyone

bowlhead99 wrote: »

Why

Don't like them.

ValiantSon

Cotta wrote: »

No sooner do I say that Bitcoins were stabilising only to find out they've dropped a further £200, I honestly don't get it.

Glen_Clark wrote: »

There is no underlying value in Bitcoin so the price depends on sentiment - which is impossible to predict.
At least with diversified equities you have underlying value to stop the price falling to zero.

As Glen says, there is no underlying value in Bitcoin, and, importantly, the market is full of get rich quick speculation, so the volatility is driven by waves of elation and hysteria as people think they're going to become multi-millionaires and then at the first hint of a slowdown or downturn, sell because they panic that they're going to lose everything.

There are lots of bitcoin investors who have absolutely no idea what they are doing, and very little idea what it is they are actually trading. The end result is a super volatile market.

ValiantSon

BananaRepublic wrote: »

Are you sure? I suspect you have not been investing for long, less than 10 years anyway. This is at the moment no more than a wobble.

I think the point being made was that timing the market is a mug's game so any time is good because you cannot know what will happen.

ValiantSon

fun4everyone wrote: »

Deutsche bank share price below it's lows during the GFC. Please go bust.

Why on earth would you want Deutsche Bank to go bust? The ensuing fallout would have a vast and massive negative impact on the economy. Was 2008 not enough impending economic chaos for you?

Glen_Clark

Historical data about previous corrections may be interesting but I doubt if its relevant. This time it really is different, because we didn't have QE then - certainly not the current level of QE where good economic news has precipitated a fall in share prices because it might lead to QE being unwound.