Markets - Minor Correction? (Edit: Question Answered)

NorthernJoe

Still hearing a lot of the usual soundbites "time in the market not market timing", "buy in the dips" etc etc but this time it feels different. I'm worried (primarily on the human level but I realise this is a financial forum)

The true potential economic and social implications of this virus remain uncertain but this is a truly exceptional occurrence that previous economic cycles have not experienced and cannot provide adequate insight into. Our world is more interconnected than ever before and highly efficient global supply chains mean that countless small and medium sized businesses are incredibly vulnerable to abrupt supply chain issues. Massive, sudden debt defaults could easily trigger a credit crunch and the ability of central banks to mitigate against that is surely very limited in an era of ultra low interest rates & already significant levels of QE. 

At the very minimum, one would expect a global recession. How deep & prolonged that will be, we do not know but this could be something we are utterly unprepared for. 

(DOI Biologist & clinician, not a economist)

LobsterMemory

NorthernJoe said:

 but this time it feels different. 

... which is another of the usual soundbites and with a less successful record of coming to pass

John464

fun4everyone said:

A week ago exactly my stock portfolio was at an all time high.  Probably be 12% down from that at the end of today.  Swingy.

Same here as I'm nearly all in world trackers.
At least we are not kicking ourselves for choosing the wrong shares.

coastline

A few weeks I posted a chart of the SP 500 where it was way above its 200 day moving average.
https://pbs.twimg.com/media/EL6feCqWoAAHSjh.png:large
Last week even higher.
https://realinvestmentadvice.com/wp-content/uploads/2020/02/SPY-1.png
A short video of recent cliff edge falls. Hope its just a minor correction ?
https://www.youtube.com/watch?v=GCUmY96FETg
 

John464

Zola. said:

Mr. Buffet says 'be fearful when others are greedy and greedy when others are fearful'.

Indeed.
This is looking like the 2008 crash, and the lesson from that was to buy, not to sell.

Yellowvest23

John464 said:

Zola. said:

Mr. Buffet says 'be fearful when others are greedy and greedy when others are fearful'.

Indeed.
This is looking like the 2008 crash, and the lesson from that was to buy, not to sell.

The difference is that this time the financial institutes have their hands tied.
also with large scale quarantine and  enforced long term shut downs, worldwide,manufacturing supplies halted any stimulus is not going to work like it did in 2008.
We are in this for the long term.

city_of_london

Yellowvest23 said:

The difference is that this time the financial institutes have their hands tied.

They don't, though. Despite many people, including some who seem to know a bit about finance, saying this. The central banks can once again provide however much liquidity may be needed. That is the nature of how modern currencies work.

However, what the last decade has illustrated very clearly is that providing unlimited liquidity doesn't solve all our economic problems. It doesn't address most of them at all; it's only effective for getting through the moment of a financial crisis. Tackling the underlying problems requires different kinds of action, much of it from governments; central banks can't be expected to fix everything.

John464

Yellowvest23 said:

John464 said:

Zola. said:

Mr. Buffet says 'be fearful when others are greedy and greedy when others are fearful'.

Indeed.
This is looking like the 2008 crash, and the lesson from that was to buy, not to sell.

The difference is that this time the financial institutes have their hands tied.
also with large scale quarantine and  enforced long term shut downs, worldwide,manufacturing supplies halted any stimulus is not going to work like it did in 2008.
We are in this for the long term.

It will damage some companies - which benefits their competitors
Thats the benefit of a world tracker holding both.

John464

ProDave said:

My biggest concern now is the housing market.  We have a house to sell this year.  It will be a big problem if it won't sell or only sells for a knock down price.

Something like a stock market crash and a pandemic is just what's likely to kill confidence and the housing market.

Recession in the UK and most of the world is now probably inevitable.

Don't worry about falling house prices.
This so called 'free market' government will intervene in the housing market and do whatever it takes, restricting supply with the worlds most onerous planning system, signing off new developments that are fire hazards people are desperate to get out of,  whilst stoking up demand with taxpayer funded subsidies like so called 'Help to Buy'.

cloud_dog

Aren't falling house prices a bit mute, even a little positive if you are going up the ladder.  All houses will fall by a percentage, a more expensive house will lose a higher value than a smaller house (same percentage).