Next recession, trade wars, up to 50% portfolio losses

ArchBair

stoozie1 wrote: »

I'd be interested to know if anyone is holding cash as a hedge.

I have a couple of friends that have recently moved their SIPP investments into cash, but they are retired and around 60, so maybe they are happy to just take the profits and go into drawdown as cash. I myself, although in the same age bracket intend to stay in the market for the time being even though I will be going into drawdown next year.

Zola.

dunstonh wrote: »

A typical stockmarket crash is around 20-25%. We are currently down around 10%. So, you are pulling out after half a typical crash.

Lets say we do get to crash territory. When will you go back in again? it wont be at bottom as you wont know when that is. There is usually a quick bounce from the bottom (or a double dip). So, you will probably go back in after it has recovered half its loss.



Punching through it usually results in better returns than trying to guess the market. There has been a crash coming since 2012. We had one in 2015 but it recovered quickly. Crashes are always coming and you cant time them. So, whats the point of pulling out and getting it wrong most of the time?

Was it Bogle who said it that in these times that it's not

"Don't stand there, do something!"

its

"Don't do something, stand there!"

ProDave

Filo25 wrote: »

Don't hold your breath on the DUP voting in any way to help Corbyn potentially get into power, it is hard to overstate just how much they despise him and McDonnell.

Equally while there may be some posturing and limited action around Syria, nobody on either side has any real interest in getting into a real escalating violent conflict between the West and Russia.

Lungboy wrote: »

Historically, what have wars done to stock markets?

e: Not an awful lot by the looks of it

The 2003 invasion of Iraq killed the housing marked dead for a while due to the uncertainty. I had just put my house on the market and it was something like 6 months before we had the first viewing and nearly a year to sell.

slapmatt

Gold and Silver for me.

I am also looking at some alternative investments, such as green power producers, but I am not sure what is the best way to get them into my SIPP.

I think the next 12-months will give a much better picture of how equities will perform in the medium terms. Overall the stock markets look overheated and that is without Trump, Brexit, Syria etc.

slapmatt

Zola. wrote: »

Was it Bogle who said it that in these times that it's not

"Don't stand there, do something!"

its

"Don't do something, stand there!"

The FTSE 100 recently reached record highs. The previous high was in late 1999.

One of the reason so many people have such crappy pensions is because the market goes in cycles but without actually making any meaningful long terms gains.

Now, I appreciate that foreign markets have performed much better in the long term, but given that UK investments have historically been very UK-centric (and I assume most people's holding are the same), doesn't that prove that timing is everything?

ewaste

slapmatt wrote: »

The FTSE 100 recently reached record highs. The previous high was in late 1999.

One of the reason so many people have such crappy pensions is because the market goes in cycles but without actually making any meaningful long terms gains.

Now, I appreciate that foreign markets have performed much better in the long term, but given that UK investments have historically been very UK-centric (and I assume most people's holding are the same), doesn't that prove that timing is everything?

So does dividend re-investment just not exist then? it's the coupling of compounded dividends and growth that really helps.

Sure if your extremely lucky you'll 'time' the market to some benefit however with more up periods than down then the chance is greater you'll lose out by being out of the market.

Most people have crap pensions becuase they don't pay in nearly enough and early enough to make a real difference long term and often their expectations are too high. How many people in their 30's or even 40's take an interest in their pension never mind the odd person in their 20's who takes an interest early enough that it might have a major impact. There is also the problem of people spending longer in retirement and in better health before then being alive longer thanks to modern medicine which can also increase their living costs due to care, illness or disability costs.

Zola.

slapmatt wrote: »

The FTSE 100 recently reached record highs. The previous high was in late 1999.

One of the reason so many people have such crappy pensions is because the market goes in cycles but without actually making any meaningful long terms gains.

Now, I appreciate that foreign markets have performed much better in the long term, but given that UK investments have historically been very UK-centric (and I assume most people's holding are the same), doesn't that prove that timing is everything?

If you are tunnel visioned into only investing in the FTSE, you probably don't deserve good rewards.

slapmatt

ewaste wrote: »

So does dividend re-investment just not exist then? it's the coupling of compounded dividends and growth that really helps.

It does, but if you invested during any of the downward moves you'd do well to break even.

I think we have been lucky in that the FTSE has gone steadily upwards since 2010, however when I look back further the cycles scare me!

slapmatt

Zola. wrote: »

If you are tunnel visioned into only investing in the FTSE, you probably don't deserve good rewards.

My investments are very diverse, in fact I have deliberately moved away from the UK as I think we will do a lot worse than pretty much everywhere else over the next few years.

However, historically pensions have been invested heavily in UK funds and equities, whereas a lot of the perceived wisdom comes form the US where the S&P has had a strong upwards trajectory since 2000.

ewaste

slapmatt wrote: »

It does, but if you invested during any of the downward moves you'd do well to break even.

I think we have been lucky in that the FTSE has gone steadily upwards since 2010, however when I look back further the cycles scare me!

You'd basically needed to have invested on the way down and then panicked or have been forced to sell to have lost out, obviously you know the reason that investing is a long term game is to even out the boom and bust. I don't disagree that there is maybe more timing involved for the active investor and I would imagine quite a few people do make some active decisions regarding timing. (Edit:- Doubtless someone will be along shortly with some statistics to make me look like a muppet)

I personally certainly keep an eye on current affairs and make some trades aka punts on individual stocks depending on whats happening, I recently jumped on Microfocus which has been rather profitable. My punts obviously have a habit of going tits up every so often but it's small beer and risk in comparison to trying to time large chunks e.g. pensions.