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

Fatbritabroad

I was literally just about to post this. Shall we get some 'i survived the great financial crash of 2018' t shirts printed . we'll clean up:D

Bravepants

Fatbritabroad wrote: »

I was literally just about to post this. Shall we get some 'i survived the great financial crash of 2018' t shirts printed . we'll clean up:D

Better yet, we could form a T-shirt printing company and offer shares.

jamei305

Bravepants wrote: »

"FTSE 100 skyrockets by 1.27%"...


Sorry, just thought I'd get there before the BBC does.

If it plunges and skyrockets in the same day they just change their initial headline to "markets volatile"

slapmatt

Matthew2018 wrote: »

If you think that there will be a serious downturn in the markets, why would you just stand there and watch your personal investments go the same way.

For me, it is the lack of a worthy alternative. If cash was earning >3% then I could just about stomach it, however with interest rates so low, bonds looking overpriced and metals not offering great returns, I think I'd rather sit it out.

Saying that, silver looks as if it has some room to increase. 10 year high of £27.94, currently £11.

Fatbritabroad

Bravepants wrote: »

Better yet, we could form a T-shirt printing company and offer shares.

T shirt coin ico? Its the in vogue thing i hear

MM2002

Blimey, Ive just put 40K(wife and my allowance) into a vanguard cash isa, to give me time to decide which LS% to go with.
Was cosidering quite high risk, 80, or even 100 or split between both.
We would not be looking to touch it until hopefully retirement in about 20 years, but want to tiem it right.

I was concerned with the markets 10% down I was losing daily being in the cash earning 0% but maybe not.

What factors do you guys look at when deciding what product to invest your lifetime savings in?

ValiantSon

Matthew2018 wrote: »

Yes I was concerned.

I have, in the last few days, moved out of investments completely and moved into cash. When I have time to catch my breath I will also move some cash into precious metals.

Why do you think you are better off buying commodities than equities? Why do you think precious metals commodities are better than cash?

Matthew2018 wrote: »

I may be wrong and the coming crash will not be for a few years, if ever. After all, unlike markets before, this already long, bull run could just keep on going. If I am wrong I will have missed out on any future increases in the market.

There will be another market correction, and there will be another crash at some point too. We just don't know when this will happen.

Matthew2018 wrote: »

However, if I am right then my cash giving me only a little more than 1% interest easily beats a downturn of 5% in the markets.

A 5% downturn is a relatively minor correction.

With any market correction, you haven't actually lost anything unless you sell at that point. You only have a paper loss, which will recover over time and, most likely, exceed its previous value (given historic market trends). If you sell when your investments are down, however, then you will make a loss. By contrast, any money you have in savings, that is earning less than inflation in interest, is losing real value over time.

Matthew2018 wrote: »

If you think that there will be a serious downturn in the markets, why would you just stand there and watch your personal investments go the same way.

Because you haven't actually lost anything and all historical data shows that the investments will recover, and most likely exceed their previous values.

ValiantSon

MM2002 wrote: »

Blimey, Ive just put 40K(wife and my allowance) into a vanguard cash isa, to give me time to decide which LS% to go with.
Was cosidering quite high risk, 80, or even 100 or split between both.
We would not be looking to touch it until hopefully retirement in about 20 years, but want to tiem it right.

I was concerned with the markets 10% down I was losing daily being in the cash earning 0% but maybe not.

What factors do you guys look at when deciding what product to invest your lifetime savings in?

I assume that you have other money saved. If you only have the £40,000 then you shouldn't invest it all. It's generally advisable to have 3-6 months worth of expenditure held in cash to protect you from the financial impact of nasty surprises, like being made unemployed.

As you are just getting in you have already missed the 10% correction, so you are buying at a cheaper price than you would have done two to three months ago. This is a positive, as your money now buys you more! Of course, the markets could fall further over the coming months, but the long term perspective is necessary.

If a 10% fall has spooked you a bit, then I would suggest that VLS80 and VLS100 might be a bit too volatile for you. Perhaps you should look at VLS60 instead. If, however, you think that really you are quite sanguine about it all (although the tone of your post suggests otherwise) then an investment in VLS80 would be reasonable at this time. You do, however, need to consider how you plan to de-risk the portfolio as you approach your target date. I wouldn't necessarily recommend remaining invested in high risk funds all the way.

MM2002

Thanks VS
Yeah, I have 100k in pensions paying 10% in, company adding 5%, a btl property with 150k equity(value about 360k) mortgage of 350 per month, rent received £1250pm. 40k salary, do about another 10-15k in overtime. Wife self employed 15k year. No pension.
Got another 20-30k to invest also, but teenage kids that are no doubt gonna dent funds in the next decade!
Maybe 20k each in ls80&ls60 for now.

Why do people only talk about vanguards life strategy products when they offer so many others?

dunstonh

Why do people only talk about vanguards life strategy products when they offer so many others?

They don't unless you limit yourself to certain websites or types of investor.

Maybe 20k each in ls80&ls60 for now.

What does that achieve? One or the other would be more sensible.

Plus, if you are worried about a minor 10% blip then is VLS80 really appropriate? VLS60 is in 25% loss potential. So, both are more than double your worry point.