Are we due a depression?

JohnRo

vmf199 wrote:

I have some money to invest, but don't know if I would be better off holding onto it and investing when markets etc have potentially dropped.
Any thoughts ideas?

If you have money to invest then now is always the right time, just be sure the investment you choose is appropriate.

A_T wrote: »

The end of 2018 saw quite a drop - if we are due a correction that might have been it.

A correction is accepted as being a pullback of 10% or more from the most recent high.

That happens fairly regularly and is nothing to be concerned about imo, it's simply the nature of market exuberance and the sobering effects of price discovery in motion.

We are always due a correction in the near future after new highs are reached. It's just a question as always of when and how much of a rise occurs beforehand.

A bear market is classed as a fall of 20% or more which unlike corrections are more about psychology and risk off attitudes. Internet search suggests they average ~30% fall and on average last about a year and recover in about two years.

Conversely a 20% rise in stock prices indicates a bull market and indicates risk on attitudes. Bull markets can rise a lot and last a long time as we have seen.

As both tend to be more protracted they're less numerous but again all part of the process, both scenarios present opportunities to hunt bargains or peel off profits if so inclined.

Again all part of the process, nothing to fear and something every investor should be expecting and planning for accordingly ahead of time.

The big danger lies in crashes which are caused by unexpected events and are typically sudden and violent in nature. They could occur at any time but there are no guarantees they will happen at all.

Difficult to plan for other than accepting the possibility exists, invest appropriately and be fully aware of risk tolerence, being prepared to sit out a recovery which could take many months or even years to complete.

The real problem with crashes is not the fall itself but the violent nature which unsettles even experienced investors and ultimately unnerves many newer investors who find their resolve tested to breaking point. That can then lead to the crash feeding itself as panic selling sets in.

This is why it's so important new DIY investors who have only seen a bull market with a few wobbles spend time honestly assessing their attitudes to risk and negative stock market scenarios.
It's why IFAs are big on assessing and profiling attitudes to risk before any investment decisions are made.

Stubod

..the thought of the mess that is brexit, and Boris as PM is enough to create a depression for me....

Thrugelmir

staffie1 wrote: »

Depressed market = opportunity to buy cheap.

Depends how overvalued major share company prices become.

Thrugelmir

Albermarle wrote: »

If Brexit goes badly , the Pound drops , which benefits most of the members of the FTSE 100 , so this index will go up .

Only in currency exchange terms. As in the case of Vodafone. Companies still need to perform.

capital0ne

vmf199 wrote: »

I have some money to invest, but don't know if I would be better off holding onto it and investing when markets etc have potentially dropped.
Any thoughts ideas?

Hold off - till when? How will you know for sure the crash has happened?

Don't procrastinate, either do it now or spend it.

No one knows what will happen.

Everyone knows that being IN the market for 5+ years and reinvesting divis WILL be better than any interest account.

Cheers