Markets - Minor Correction? (Edit: Question Answered)

Ciprico

Stargunner said:

Amateurretiree said:

Forgive my ignorance but how do you ‘cash in’ without paying a shed load of tax? 

If your investments are in a sipp or an isa they are sheltered from tax.

In Sipp so no tax to worry about. Cash is still the in SIPP. I only had three funds. 
If you're worried about (CGT) tax, now may be a good time to sell some stocks, (a) to use this years CGT allowance and (b) to sell whilst price is depressed. (Read up on "bed and breakfasting") 

Amateurretiree

Stargunner said:

Amateurretiree said:

Forgive my ignorance but how do you ‘cash in’ without paying a shed load of tax? 

If your investments are in a sipp or an isa they are sheltered from tax.

But if I want to draw it out I have to pay my marginal rate of tax on it( forgive my ignorance if I appear thick- it’s in a SIPP)

bowlhead99

123mat123 said:

Is this the start of it, (is Trump cleverer than we give him credit) - who knows 

If I was a betting man I would not bet the farm on Trump being cleverer than we give him credit for.  I did stay up late on Wednesday to watch him bumble though his press conference about the issues in play...

But also, I want to talk to you about 2014.  During the Ebola crisis, you said you wanted a “full travel ban.”  You said Obama was a “stubborn dope” not for doing it.  You said, “Just stop the flights dummies!”  You also said it was a “total joke” to appoint someone to lead the Ebola response with, quote, “zero experience in the medical field.”  Now you’ve appointed Mike Pence.
THE PRESIDENT:  They listened to a lot of what I had to say.  And they —
Q    I did.  So how does that square with what you’re doing right now?
THE PRESIDENT:  They listened to a lot.  Well, because this is a much different problem than Ebola.  Ebola, you disintegrated, especially at the beginning.  They’ve made a lot of progress now on Ebola.  But with Ebola — we were talking about it before — you disintegrated.  If you got Ebola, that was it.
This one is different.  Much different.  This is a flu.  This is like a flu.  And this is a much different situation than Ebola.

Q    Your budgets have consistently called for enormous cuts to the CDC, the NIH, and the WHO.  You’ve talked a lot today about how these professionals are excellent, have been critical and necessary.  Does this experience at all give you pause about those consistent cuts?
THE PRESIDENT:  No, because we — we can get money and we can increase staff.  We know all the people.  We know all the good people.  It’s a question I asked the doctors before.  Some of the people we cut, they haven’t been used for many, many years.  And if — if we have a need, we can get them very quickly.
And rather than spending the money — and I’m a business person — I don’t like having thousands of people around when you don’t need them.  When we need them, we can get them back very quickly.  For instance, we’re bringing some people in tomorrow that are already in this, you know, great government that we have, and very specifically for this.  We can build up very, very quickly.  And we’ve already done that.  I mean, we really have built up.  We have a great staff. And using Mike, I’m doing that because he’s in the administration and he’s very good at doing what he does, and doing as it relates to this.

On to the economy:

Q    Two weeks ago, Mr. President, your Acting OMB Director was in this room and was talking about what he expects to be GDP growth for this coming year.  He said it was 3 percent.  And we’ve talked about the effects of the coronavirus on the supply chain, the declines in the financial markets.  Are you still confident that you’ll see that kind of economic growth this year?
THE PRESIDENT:  No, we’re going to have tremendously low unemployment.  We’re setting records on that one.  In fact, the administration has the — as you know, the lowest average unemployment of any administration in history.  Our numbers are very low, very good — 3.5, 3.6.  But you can’t really see what this does in terms of GDP.
It could affect it, but that’s irrelevant compared to what we’re talking about.  We want to make sure it’s safe.  Safety, number one.
But this would have, you know, an impact on GDP.  But we’re still very, very — we’re doing great.  But this will — just like — I’ll tell you what has a big impact: Boeing has a big impact.  How did that happen?  A year ago, all of a sudden, that happened.  I think that took away a half a point to a point, even.  You know, it’s a massive company.  I think Boeing — we had the General Motors strike; that was a big impact on GDP.
And, of course, we’re paying interest rates.  I disagree with the head of the Fed.  I’m not — I’m not happy with what that is because he’s kept interest rates.
President Obama didn’t have near the numbers.  And yet, if you look at what happened, he was paying zero.  We’re paying interest.  Now, it’s more conservative.  And, frankly, people that put their money away are now getting a return on their money as opposed to not getting anything.
But I think, you know, we’re the — we’re the greatest of them all.  We should be paying the lowest interest rates.  And when Germany and other countries are paying negative rates — meaning, they’re literally getting paid when they put out money.  I mean, they — they borrow money and they get paid when it gets paid back.  Who ever heard of this before?  It’s a first.  But we don’t do that.
So I totally disagree with our Fed.  I think our Fed has made a terrible mistake, and it would’ve made a big difference, as good as we’ve done, even without the 2,000 points.  And we started off at 16,000, and we’ll be at 28,000 without.  We were going to crack 30,000.  We have had increases like nobody has seen before.  But we’re doing well.
But we have to watch — we’re doing well, anyway, in other words, even despite the 2,000 points.  It sounds like a lot, and it’s a lot.  But it’s noth- — it’s very little compared to what we’ve gone up.
But we’ll be watching it very closely.  But we have been hurt by General Motors.  We’ve been hurt by Boeing.  And we’ve been hurt by — we’ve been hurt, in my opinion, very badly, by our own Federal Reserve, who has also created a very strong dollar.  That’s something nice about a strong dollar, but it makes it much harder to do business outside of this country.

On to how Trump believes himself more than the experts:

Q    In just the course of the last couple of minutes, you have disputed some of what the officials that are working in your administration behind you have said about the risk of coronavirus and its spread.  Do you trust your health officials to give you good information?
THE PRESIDENT:  Oh, sure.
Q    Or do you trust your own instincts more?
THE PRESIDENT:  I don’t think I have.  They’ve said it could be worse, and I’ve said it could be worse too.
Q    You said you don’t believe it’s inevitable.  That contradicts what the CDC —
THE PRESIDENT:  I also think —
SECRETARY AZAR:  They said it will be worse.
THE PRESIDENT:  No, I don’t think it’s inevitable.  I don’t think it’s inevitable.  I think that we’re doing a really good job in terms of maintaining borders and turning — in terms of letting people in, in terms of checking people.
And also, that’s one of the reasons I’m here today: getting the word out so people can — they’ll know.  They’re going to know. No, I don’t think it’s — I don’t think it’s inevitable.  I think that there’s a chance that it could get worse.  There’s a chance it could get fairly substantially worse.  But nothing is inevitable.

ANGLICANPAT

 Presuming that some businesses and industries could do well where others will nosedive in a recession  Is there any  logic in thinking that   with a full blown  pandemic ,  special situation funds  would be less hard hit - in so much that they are set up  (I presume) to be able to swiftly take advantage of the changing needs of world populations ?  Along the lines of dumping say entertainment stocks etc, and   buying into respirators, paper hankies,  energy drinks, water companies, mobility equip, home played games,  childminding business (for if  (or when inmho)  primary schools are closed ) ,  and other similar stuff ?

bowlhead99

ANGLICANPAT said:

 Presuming that some businesses and industries could do well where others will nosedive in a recession  Is there any  logic in thinking that   with a full blown  pandemic ,  special situation funds  would be less hard hit - in so much that they are set up  (I presume) to be able to swiftly take advantage of the changing needs of world populations ?  Along the lines of dumping say entertainment stocks etc, and   buying into respirators, paper hankies,  energy drinks, water companies, mobility equip, home played games,  childminding business (for if  (or when inmho)  primary schools are closed ) ,  and other similar stuff ?

There are relative winners and losers from all market events. But no, special situations funds are not specifically set up to quickly react to the short term changing needs of world populations as you presume. 

My largest individual company holding is still Tencent, they seem to have held up well since the start of the year despite the problems in China - having people confined to their homes isn't too bad for a company that can support entertainment and home-played gaming  as you mention, along with lots of other communications stuff that doesn't require face to face contact or commuting to keep the revenues coming in. 

FWIW this week I sold some of my holding of a global equal-weight tracker and then on Friday made contrarian additions to VOF and GOOGL both quite a bit cheaper than they have been recently but I wouldn't expect it to be the bottom; more a bit of a punt to increase those holdings for the longer term at less than maximum prices. I saw Lloyds 9.25 prefs dropped a few pence on Friday to below 150p without any real trading volume so may add there or to NWBD (which dropped likewise) with the remaining money, which should generally be OK for a prolonged downturn if we get one. But no doubt there will be bigger bargains in due course.

A broad swathe of stocks are getting cheaper but the trick will be working out which ones are unjustifiably cheaper. Difficult when you can make arguments for almost anything getting cheaper in times of crisis or falling global output. Hopefully the slump will continue a couple of months to get us to next tax year by which time I'll have more money available.

kinger101

Amateurretiree said:

Stargunner said:

Amateurretiree said:

Forgive my ignorance but how do you ‘cash in’ without paying a shed load of tax? 

If your investments are in a sipp or an isa they are sheltered from tax.

But if I want to draw it out I have to pay my marginal rate of tax on it( forgive my ignorance if I appear thick- it’s in a SIPP)

The liquidation step is converting from shares, funds, bonds or whatever to cash.  While withdrawing cash from a SIPP requires liquidation, there's nothing to stop someone leaving liquidated cash in a SIPP.  

Amateurretiree

kinger101 said:

Amateurretiree said:

Stargunner said:

Amateurretiree said:

Forgive my ignorance but how do you ‘cash in’ without paying a shed load of tax? 

If your investments are in a sipp or an isa they are sheltered from tax.

But if I want to draw it out I have to pay my marginal rate of tax on it( forgive my ignorance if I appear thick- it’s in a SIPP)

The liquidation step is converting from shares, funds, bonds or whatever to cash.  While withdrawing cash from a SIPP requires liquidation, there's nothing to stop someone leaving liquidated cash in a SIPP.  

So I can liquidate the entire 300 000 into cash and leave it in the SIPP so it isn’t at the mercy of the stock market( 40 % in stocks 40% in bonds so would leave the bonds as they are?)

eskbanker

Amateurretiree said:
So I can liquidate the entire 300 000 into cash and leave it in the SIPP so it isn’t at the mercy of the stock market( 40 % in stocks 40% in bonds so would leave the bonds as they are?)

There's a difference between being able to do that and it being a good idea to do so - how long would you anticipate that £300K lasting for?  There's little point in having it all in cash if some of it won't be spent for 5-10 years, and would miss all the recovery growth....

aroominyork

Amateurretiree said:

kinger101 said:

Amateurretiree said:

Stargunner said:

Amateurretiree said:

Forgive my ignorance but how do you ‘cash in’ without paying a shed load of tax? 

If your investments are in a sipp or an isa they are sheltered from tax.

But if I want to draw it out I have to pay my marginal rate of tax on it( forgive my ignorance if I appear thick- it’s in a SIPP)

The liquidation step is converting from shares, funds, bonds or whatever to cash.  While withdrawing cash from a SIPP requires liquidation, there's nothing to stop someone leaving liquidated cash in a SIPP.  

So I can liquidate the entire 300 000 into cash and leave it in the SIPP so it isn’t at the mercy of the stock market( 40 % in stocks 40% in bonds so would leave the bonds as they are?)

Yes. It's just like if you sold one holding in a SIPP and the next day bought another. It would not count as a withdrawal followed by a new contribution (which, if it were a new contribution, would be grossed up by HMRC) . 

bowlhead99

Amateurretiree said:
So I can liquidate the entire 300 000 into cash and leave it in the SIPP so it isn’t at the mercy of the stock market( 40 % in stocks 40% in bonds so would leave the bonds as they are?)

You can liquidate the stocks or bonds or both, but if you don't take the money out of the SIPP it will not be taxed as income, it's just value  sitting inside a pension that you haven't taken.

I you sell only the stocks you will no longer be at the mercy of the stock market but will still be at the mercy of the bond market - most people like some of both, by way of balance. There is also the commercial property market, the gold market, specialist investments in infrastructure projects or private equity, absolute return funds and various debt funds and alternative credit strategies etc etc.