passive investing

ColdIron

Crashy_Time wrote: »

How many ordinary (or even highly experienced) investors had the luxury of staying fully invested though, during one of the greatest depressions/deflations of the modern age?

The overwhelming majority of pension holders?

Crashy_Time

I meant people who were actively investing in stocks for themselves (like the OP and most on here) not people enrolled in pension schemes with little interest or knowledge of financial markets, or the ability to cash out. The point about pensions is an interesting one though. My belief was that many people were liquidating anything that they could sell to raise cash for debt and living expenses, and that this was widespread. Happy to be told otherwise though.

TBC15

Crashy_Time wrote: »

How many ordinary (or even highly experienced) investors had the luxury of staying fully invested though, during one of the greatest depressions/deflations of the modern age? Another good reason IMO to consider very carefully the % of money you allocate to the markets, and to have a good think about what else could potentially be going on in the wider economy during a market downturn.

To our shame we lost faith, we didn’t put any new money into an ISA in 08/09 can’t remember exactly what year it was.

It’s the only thing I regret in 26ys ish of investing.

Crashy_Time

TBC15 wrote: »

To our shame we lost faith, we didn’t put any new money into an ISA in 08/09 can’t remember exactly what year it was.

It’s the only thing I regret in 26ys ish of investing.

Yes, it might have been better to double down then, and maybe get more cautious when the Fed started tightening, but I meant the Great Depression era, how many could afford to hold on when there wasn`t the same social/economic safety net that we take for granted today?

dunstonh

Crashy_Time wrote: »

I meant people who were actively investing in stocks for themselves (like the OP and most on here) not people enrolled in pension schemes with little interest or knowledge of financial markets, or the ability to cash out. The point about pensions is an interesting one though. My belief was that many people were liquidating anything that they could sell to raise cash for debt and living expenses, and that this was widespread. Happy to be told otherwise though.

Looking back, we had one client who ended their investments at that time. The rest continued. I would suggest that the vast majority continued. Certainly, the figures for amounts invested support that.

Remember the markets fell by about the same as they did during the dot.com period. So, this was not unexpected or unusual. ANd the bounce was relatively quick. So, most investors didnt see the high and low point. They saw a more typical crash figure.

Crashy_Time

dunstonh wrote: »

Looking back, we had one client who ended their investments at that time. The rest continued. I would suggest that the vast majority continued. Certainly, the figures for amounts invested support that.

Remember the markets fell by about the same as they did during the dot.com period. So, this was not unexpected or unusual. ANd the bounce was relatively quick. So, most investors didnt see the high and low point. They saw a more typical crash figure.

Sorry, maybe I am not being clear enough, my post you quoted relates to the Great Depression and the 1929 stock crash, not the 2008 crash and debt rescue mission by the central banks. Your information is interesting, but I believe right now a lot of money is pouring out of stocks/ETF`s/other funds?

bradqwer

Well I have taken the plunge and invested into a riskier product that I listed in the thread, its not a huge amount monthly (£75) and certainly won't be missed or be at risk of being taken out should the world end

Alexland

Crashy_Time wrote: »

Sorry, maybe I am not being clear enough, my post you quoted relates to the Great Depression and the 1929 stock crash, not the 2008 crash

Admittedly dunstonh had a few less clients in 1929 but I have no reason to doubt his excellent recollection of their reactions at the time.

Alex

Crashy_Time

Are there differing perspectives on the Japanese market/property collapse?

bostonerimus

Crashy_Time wrote: »

Sorry, maybe I am not being clear enough, my post you quoted relates to the Great Depression and the 1929 stock crash, not the 2008 crash and debt rescue mission by the central banks. Your information is interesting, but I believe right now a lot of money is pouring out of stocks/ETF`s/other funds?

I'm not old enough to have experienced the 1929 stock crash, or it's results, but I have lived through several bear markets and 2008 as I started investing in the late 1980s. I've followed a pretty passive style using broad cap weighted indexes and rebalancing to about a 60/40 asset allocation while I was working full time. Over the last 30 years my average annual return is around 8.5% and I got that by staying invested. 2018 was poor year and I get the feeling that they'll be a lot of volatility in 2019 too, but I'm staying invested and I've even stopped rebalancing. Even though I'm retired I can be pretty sanguine about the ups and downs of the markets as I've arranged things so that my retirement income comes from rent and a pension/annuity.

The bottom line is that during bear markets if you are in the accumulation mode you should stay invested as that will probably give you the best long term returns and if you are retired you should have arranged things so that you can get income from sources other than having to sell volatile stocks.