Bear market

BLB53

All the sound bites I'm reading; there is a 40% correction on the horizon?

If you take much notice of the scribblers then probably best to avoid investing.

rathernot

I heard it was going to be 41% so I'm waiting for that.

dunstonh

All the sound bites I'm reading; there is a 40% correction on the horizon?

in the last 35 years, there have only been two 40% drops. They are not common.

There is always a 40% crash (not correction as that is 10-19%) on the horizon. They are always coming. You just don't know when. It could be tomorrow, next week, month, year or decade or even two decades.

What is more likely to be coming in the short term is a more typical crash. The type you see every 3-5 years. A 20-25% level. Again, they are always coming. You just don't know when.

Sites and people that call crashes tend to do so every year. Sooner or later they will be right. Just like a stopped clock is correct twice a day.

why would someone invest today when tomorrow the same investment might be a fraction of today price?

Because you don't know what is going to happen tomorrow and growth periods outnumber negative.

But then why not hold out for the crash? Same stock cheaper price., or am I missing something?

When is that 20% crash coming?
Will it be after a 5% gain? Will it be after a 10% gain? Will it be after a 40% gain?

How will you know when to reinvest? Crashes occur over a period. Not one moment in time. That "crash" could be over a week or it could be over 6 months. The early part of the millennium saw the decline over 3 years. So, when is the high point and when will you know when the low point is?

You don't know any of that. You just know that there are always gains coming and losses coming. You know an economic cycle is around 10 years and you will get good years, bad years and nothing years and that you average them out. Beyond that, you know nothing.

AnotherJoe

henryandmay wrote: »

I'm new to investing and was wondering; why would someone invest today when tomorrow the same investment might be a fraction of today price?

All the sound bites I'm reading; there is a 40% correction on the horizon?

thanks

And are the people issuing those sound bites multi Mega millionaires on account of their abilty to predict the stock market?

Why aren't they lounging on their own personal Dr No style private island being served mint juleps rather than earning a a crust writing ?

ChesterDog

Markets very, very often pay no attention whatsoever to hype, scaremongering or even to thoroughly researched, logical reasoning.

Quite often, they seem to do the opposite of what they "should".

In the short term they are unpredictable. In the long term, they rise.

Filo25

Prism wrote: »

Because nobody has a clue when it will happen. This horizon could be tomorrow or 5 years away. In the meantime you miss out on the current growth and dividends. You also have no way of predicting low it will go. What happens if the crash is only 31% rather than 40% for example. If you sit waiting for the bottom you might blink and miss it.

Three years ago the same people were predicting an imminent crash. Since then my investments are up over 50%. Good job i didn't listen then, and I'm certainly not listening now

Indeed, nobody is saying anything much new now compared to the comments in the press years ago that equities were primed for a crash, if you sold up every time you heard that you would never invest in equities.

There will be a significant crash at some stage, nobody has a clue when it will be, how much the markets will have gone up before that, how deep it will be, how long it will last and how long it will take to recover.

Apart from that I suppose it's all pretty predictable

dividendhero

AnotherJoe wrote: »

And are the people issuing those sound bites multi Mega millionaires on account of their abilty to predict the stock market?

Why aren't they lounging on their own personal Dr No style private island being served mint juleps rather than earning a a crust writing ?

In some cases they are...but not because they've any special insight.

Just finished reading "Cityboy", it's written by a former city analyst - he was paid megabucks for his wisdom. But he says it was all tosh, but if major institutions were happy to pay massive wages and bonuses to write such rubbish he was happy to oblige. Also read of a hedge fund manager who advised his own friends and family to simply invest in trackers...

talexuser

The difference from the past is this bull run has been financed by historically unknown (in the modern era) interest rates and QE, which we should have wound up a long time ago, but coming off the drug has been difficult since if there is a crash there was no worthwhile interest rate reductions to counteract it.

jimjames

I think the comment often said is something like .. commentators have predicted 40 of the last 3 crashes.

PuzzledDave

henryandmay wrote: »

But then why not hold out for the crash? Same stock cheaper price., or am I missing something?

Can I introduce you to the house price crash folks ? They are waiting for the same thing, the inevitable crash of house prices so they can buy cheap.

They have been waiting 16+ years. They now cannot break even.... even if house prices hit £0 per sq meter.