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

JohnRo

You're either a long term buy and hold equity investor, or you're not. If you're not in it for the long term then you arguably shouldn't be invested in equity markets anyway, unless simply gambling on a favourable outcome in the short term. If you're just fearful of the downside then that's an exposure issue.

Everyone knows a crash is going to happen, noone knows when a crash is going to happen, some guess right, some keep guessing until they're right. I understand the temptation to try and dodge a bullet, to get out of the way, wait and then try to steal a march on everyone else. It all sounds so simple but the chances of success are quite slim.

In reality getting out of the market in the short term is just as likely to damage returns as it is to prevent losses, longer term it's unlikely to matter. I know from experience that I'm a heck of a lot more comfortable being in the equity market, toppy or not, than out of it and that when the next crash happens it will at least provide a few, perhaps brief and limited, rebalance and reduced cost opportunities, before starting a recovery, which could well be rapid.

Wiser to focus energy on portfolio diversification, global coverage, suitability and risk tolerance rather than plotting a perfect market timing path.

I just don't see the point in trying to second guess equity markets and an inevitable crash when the potential for a disasterous timing decision in either direction is so pronounced.

Good luck to those that do, they'll need it.

Voyager2002

slapmatt wrote: »

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

Several easy ways. There are a couple of Investment Trusts that I hold (Greencare and The Renewable Infrastructure Group) with dividend yields of around 5 per cent and low volatility. And there are any number of ETFs: a big one, from iShares, has very reasonable fees.

I am not sure that there are any better options.

slapmatt

Voyager2002 wrote: »

Several easy ways. There are a couple of Investment Trusts that I hold (Greencare and The Renewable Infrastructure Group) with dividend yields of around 5 per cent and low volatility. And there are any number of ETFs: a big one, from iShares, has very reasonable fees.

I am not sure that there are any better options.

Thanks, I will definitely have a look at those.

OldMusicGuy

stoozie1 wrote: »

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

See post #31. I am holding enough cash/near cash to last us at least 10 years.

TBC15

A lot of the people here seem to be contributing to the result they fear.

Thrugelmir

Investment wise. Currently very low cash balance. As have identified a couple of long term opportunities that offer reasonable value. Not that they are exciting. However should outperform cash in the medium term. Nothing to suggest that the world markets en masse are going to come crashing down anytime soon. It's the large cap stocks that hurt the indices. Leaving many little changed.

OldMusicGuy

TBC15 wrote: »

A lot of the people here seem to be contributing to the result they fear.

Which means?

Thrugelmir

OldMusicGuy wrote: »

Which means?

Sentiment drives markets.

ChesterDog

TBC15 wrote: »

A lot of the people here seem to be contributing to the result they fear.

I always hold a lot of cash - it's not a reaction to current conditions per se. Well, perhpaps in the sense that I am holding much of that sum in place of bonds.

Glen_Clark

ProDave wrote: »

So Maybot is about to put our 3 nuclear powers up against the might of Russia.

Anyone now still feel a stock market crash is not iminent.

As before I am keeping my pension pot in cash right now.

What do the DUP think? If they are against war, vote of no confidence = Jeremy as PM. That might be good for keeping us out of a war but I still see that crash.

Why do people think the pound sterling would hold its value better than a world tracker fund in a crisis?