Boris Bounce to Boost Pension Savings

Paul_Herring

ffacoffipawb wrote: »

due to the 10% share confiscation (theft)

Er, for some industries, that would be 100%....

MaxiRobriguez

NedS wrote: »

Ooh I hope so. I'm sitting on a very heavy cash position having taken profits at the end of 2019 so an imminent crash would represent an excellent buying opportunity.

That said, I've been waiting for the next crash since the taper tantrum in 2013 and this bull market just keeps on giving. What's an investor to do?

Adjust cash positioning as the bull market develops rather than an all or nothing approach.

I've been between 85% and 100% equities for a number of years now, when the markets get a bit too frothy for my liking I take some profits and then retain the equity/cash split until you get that pull back at which point you deploy. Rinse and repeat, benefit of not missing out on the long march upward but enough cash on hand to take advantage of any big drops like late 2018. I suspect I've not actually done any better than someone who's retained 100% equity position throughout, however, with performance roughly in line I will fare better when the bear market does eventually come so it suits me fine to continue for now.

Also as Thrugelmir suggested, start looking for value. Commentary on stock markets is almost always based around American markets. Plenty of opportunities in other markets, including our own. Some UK assets have not got anywhere for five years because of people's Brexit fears but are highly investable propositions. Not all, but some.

jamesd

NedS wrote: »

I've been waiting for the next crash since the taper tantrum in 2013 and this bull market just keeps on giving. What's an investor to do?

Be balanced. Lower equities than usual but still lots of them.

If you're not familiar with it, Guyton's sequence of return risk reduction approach may be of interest. It adjusts the equity percentage based on the cyclically adjusted price/earnings of each market v its historical range. It shows excellent inverse correlation with equity returns over the next ten years.

You're in quite good company in some ways, since Bill Bengen wrote this in 2016:

"One thing seems fairly clear to me: This is likely a poor time to be frisky with one’s retirement withdrawal strategy. Valuations seem so stretched, and economic prospects so limited, that a sizable stock market correction seems likely. When that correction will occur, I can’t say. But given the cyclicality of markets, an opportunity will inevitably present itself, and the best time for implementing these asset allocation concepts might be following such an adjustment in prices."