Anything which didn't go down in the Oct 2018 crash?

RomfordNavy

My timing has never been particularly good: so having decided to invest in various Equity based Investment Funds in September, it was not surprising when worldwide equities crashed a month later in October. Luckily I only invested about 20% so can afford to sit on the loss until they recover.


From what I can see there doesn't appear to have been mush in the way of rational reason for this worldwide drop beyond contagion of public sentiment. It makes me wonder about the long-term benefits of equity fund investments if they are this unstable.


Question is are there any asset classes which didn't go down in the October crash?

dealer_wins

Over 5 - 10 years these ups and downs tend to iron out.

Asghar

What crash?

RomfordNavy

dealer_wins wrote: »

Over 5 - 10 years these ups and downs tend to iron out.

I guess I will probably have more confidence in that opinion in 5-10 years time. Thats why I only put 20% into Equity funds to see how it works out over a period of time.

It could well be that this is a good buying opportunity which in the future I may live to regret not taking advantage of but having experienced these unexpected (albeit hopefully temporary) losses I don't know that I have the required level of intestinal fortitude to put another 20% into equities at the moment.

RomfordNavy

Asghar wrote: »

What crash?

Around 4th - 12th October markets around the world lost maybe 10% of their value.

MK62

RomfordNavy wrote: »

Around 4th - 12th October markets around the world lost maybe 10% of their value.

That's a correction......'they' deem a crash to be a 20%+ drop.

takesyourchances

RomfordNavy wrote: »

I guess I will probably have more confidence in that opinion in 5-10 years time. Thats why I only put 20% into Equity funds to see how it works out over a period of time.

It could well be that this is a good buying opportunity which in the future I may live to regret not taking advantage of but having experienced these unexpected (albeit hopefully temporary) losses I don't know that I have the required level of intestinal fortitude to put another 20% into equities at the moment.

I know you know this, but you have only been invested a couple of months. The best thing you can do is to not look at daily movement or check your account to often and invest regular over a long period of time and during that time you will get used to the up's and down's of the market.



Personally I am investing as normal, which is as much as I can afford to just the same as this time last year and the year before that and so on.



Some of my investments pay out dividends from income investment trusts and I am re-investing along with fresh money.



As long as you have enough cash reserves investing is for the long term

System

RomfordNavy wrote: »

Question is are there any asset classes which didn't go down in the October crash?

Gold! I bought gold at the end of September and beginning of October then sold at the end of October and beginning of November. A 4% profit in a month is reasonable when everything else is going down! However, in the long run, equities will beat gold and other assets. If you want stability then equities are not for you.

jimjames

RomfordNavy wrote: »

Question is are there any asset classes which didn't go down in the October crash?

My private equity investment was minimally affected but even other mainstream funds have only dropped around 7%. If you're worried about such changes then you may have bought investments at the wrong risk level for your risk tolerance

short_butt_sweet

RomfordNavy wrote: »

Around 4th - 12th October markets around the world lost maybe 10% of their value.

it's just a flesh wound!

Economic wrote: »

Gold! I bought gold at the end of September and beginning of October then sold at the end of October and beginning of November. A 4% profit in a month is reasonable when everything else is going down! However, in the long run, equities will beat gold and other assets. If you want stability then equities are not for you.

and nor is gold.

if you want stability, you want cash. or perhaps bonds, but only if they are high-quality (gilts, or investment-grade corporate bonds) and not too long-term.

if you want hopefully higher returns, you probably want equities or real estate.

or, as a compromise, you probably want a mixture of stable but low-return assets (cash/bonds) and higher-return but unstable assets (equities/real estate). which is apparently what you have, so well done!

whether you have exactly the right mixture, for you, is another question.

Wildsound

The only friend you have is hindsight.

If you want to time the markets, or protect against something you think is going to happen, the only way to potentially limit the downside is to have a full understanding of the market at the present time, what you think the market is going to do over a particular time period from today, and then find an investment which fulfils your expectations.

Hindsight would show you that one of the best funds you could have been invested in over the last two months was an absolute return fund (see here) with a severely short position on US tech/pharma (nasdaq has dropped about 12% in the period) and the US dollar (Sterling spiked up at a couple of points before returning low as it is now). The fund is up about 14% since October 1st.

However, being invested in this fund for the 6 months prior to October would have hit you with a loss of about 32%, so I'm pretty sure even the highest of risk tolerant people would find it hard to stomach the volatility this fund gives.

The best thing to do, if you're not either a professional or heavily experienced/knowledgeable, is to pick a multi asset portfolio which meets your risk tolerance and time horizon and then forget about it until you start getting closer to the time when you actually need to start drawing from the investment.