Correction in progress!

Glen_Clark

2010 wrote: »

Why didn`t people sell at 7700, because they never seen a correction coming. (you never do).

Even with the benefit of hindsight, there wasn't really anything to see was there?
The reason for the fall (the threat of withdwawing QE) was well known and has been predicted for about 9 years ever since they introduced 'Emergency' 0.5% interest rates. Someone, somewhere, started taking the threat more seriously and started a panic. :eek:
But it still might never happen.

chrisgg

2010 wrote: »

If/when the support level goes at 7000, then the tend could be downwards for some time.

Why didn`t people sell at 7700, because they never seen a correction coming. (you never do)

You can never see a correction coming, yet you have essentially predicted an extended one...

2010 wrote: »

Why aren`t they selling at 7093, because they are in it for the long term and anyway "it`ll bounce back".

Well in Dec 1999 the Ftse 100 hit 7000 and then fell and it then took around sixteen years to hit 7000 again.

Some people haven`t got time to be in it for the long term.

Which is why you shouldn't invest above your risk profile/at all with a time horizon of less than 5 years.

On another note, quoting FTSE returns without accounting for dividends is very misleading.

ColdIron

2010 wrote: »

Well in Dec 1999 the Ftse 100 hit 7000 and then fell and it then took around sixteen years to hit 7000 again.

Some people haven`t got time to be in it for the long term.

You're forgetting the dividends which are a large part of the total return

chucknorris

Sea_Shell wrote: »

The main problem in times like these is that you MAY have been investing in the long term...but time waits for no man and now what was your long term, is now your short term, as you need the money sooner.

I was 60 in January, and I've been thinking (for a while) that I am approaching the time when I should be starting to reduce my risk, and with that in mind I have probably just about got enough in equities now (apart from topping up my SIPP and ISA). So I will probably not be in a position to take advantage of lower prices after a correction any more.

economic

chucknorris wrote: »

I was 60 in January, and I've been thinking (for a while) that I am approaching the time when I should be starting to reduce my risk, and with that in mind I have probably just about got enough in equities now (apart from topping up my SIPP and ISA). So I will probably not be in a position to take advantage of lower prices after a correction any more.

I still have roughly 30% in cash. I’m 34, do you think I should just invest the lot in stocks? Minus the emergency cash.

chucknorris

economic wrote: »

I still have roughly 30% in cash. I!!!8217;m 34, do you think I should just invest the lot in stocks? Minus the emergency cash.

It is very subjective, if it was me, at your age, and I had no specific or outline plans for that 30% cash, I would probably reduce it to about 10%, and invest the remaining 20%, but there is no right and wrong answer, it all depends how you feel about it.

A_T

One would expect Chuck Norris to be 100% equities

Prism

2010 wrote: »

Well in Dec 1999 the Ftse 100 hit 7000 and then fell and it then took around sixteen years to hit 7000 again.

Some people haven`t got time to be in it for the long term.

Over that particularly bad time period however, even with the two crashes you would be up about 50% by simply investing in the FTSE 100 - which no one in their right mind should do exclusively.

Eco_Miser

chrisgg wrote: »

Which is why you shouldn't invest ... at all with a time horizon of less than 5 years.

But that means you should divest five years before your target date, so T-5years becomes your new target date, which you should divest five years before. Et cetera.
Simplifying: you shouldn't invest at all.

Really, it depends what happens when you reach your time horizon.

Alexland

k6chris wrote: »

So not sure the current levels make a good buying opportunity based on this view of the world? Maybe a correction of 30-40% would make valuations look interesting for the long term?? I still think that with people seeing a 5-10% pull back as a buying opportunity is a sign that we still have a lot of market complacency? But, yes, if was that easy we would all be millionaires!!

The problem is you can't just wait until markets correct themselves to match your view of the world. If you sit there waiting for this dip to hit at least a 30% drop before you start buying then you might miss the opportunity because it only ever drops 29.5%.

As we don't really know the depth of this drop it makes sense to start taking advantage of it gradually so that we can be certain of acquiring at least some units at an advantageous price.

Alex