Markets - Minor Correction? (Edit: Question Answered)

Alexland

We have a mix of capped ETF accounts (SIPPs and LISAs at around £10 per trade) and traditional fund accounts (workplace pensions and ISAs at £0 and £5 per trade respectively) so to avoid or minimise trade fees I tend to keep the ETF accounts 100% equities and do the rebalancing via the fund accounts. So yes it looks like the fund trades will be beneficial.

pip895

Can anyone enlighten me on why my best performing fund through this crisis is a Chinese small companies fund and my worst is a Japanese fund??  It isn't intuitive at all to me - I'm trying to work out whether or not to rebalance.

ffacoffipawb

Looking at the impact of Covid-19, I think Corbyn-19 would have been even more devastating.

Username999

Market reactions to past virus scares show stocks may have more to lose

"Looking back 20 years, previous epidemics from SARS in 2003 to the Ebola scare six years ago shaved 6% to 13% off the S&P 500 over different lengths of time, according to Citi."
 
https://www.cnbc.com/2020/01/28/market-reactions-to-major-virus-scares-show-stocks-have-more-to-lose.html
 

Thrugelmir

pip895 said:

Can anyone enlighten me on why my best performing fund through this crisis is a Chinese small companies fund and my worst is a Japanese fund??  It isn't intuitive at all to me - I'm trying to work out whether or not to rebalance.

Without factoring in any impact of the virus. Japanese growth figures for the last quarter of 2019 were significantly negative on an annualised basis.  Likewise there's a considerable number of Japanese manufacturing companies that are highly dependent on components and parts from Chinese suppliers. The combination of factors outweighs virus threats alone. 

ffacoffipawb

Just bought a small amount of Royal Dutch Shell at 8% yield.

pip895

Thrugelmir said:

Without factoring in any impact of the virus. Japanese growth figures for the last quarter of 2019 were significantly negative on an annualised basis.  Likewise there's a considerable number of Japanese manufacturing companies that are highly dependent on components and parts from Chinese suppliers. The combination of factors outweighs virus threats alone. 

I cant help thinking lots of places are very reliant on Chinese parts though - including us in the UK - I was talking to someone today who was worrying about having to send people home because he had run out of components.. 
Its the resilience/ downright buoyancy of the Chinese small company fund has me most puzzled though.

fun4everyone

The best advice that this particular forum gives as a group is to not sell investments due to news/headlines/intuition/tea leaves/whatever.  Just make your allocation and contributions and ride it out no matter what (or perhaps without even looking at it).  We never know what's actually going to happen, despite arrogantly thinking we do.  This mindset worked particularly well during the EU referendum when although it appeared we were going to get a crash after the vote we got a surprise big rally.
If equities were a straight up line everybody would do it.  Drops like this are what gives us our edge.  I know in 20 years time this will be a forgotten tiny blip and almost everyone on here as been through worse crashes before.

I will not be adjusting or selling anything except for my yearly rebalance as usual come April.

For what its worth my SPECULATION is that this could get quite a bit worse before it gets better.  I suspect Covid 19 has a high death rate for something so contagious, perhaps around 4-5% rather than the 1-2% being banded about officially.  For comparison Flu has a 0.05% death rate and Covid 19 is four times as contagious as flu on average.  I can forsee disruption continuing and major events such as the Grand National being cancelled here (as the football is this weekend in Italy).  However I am just guessing and will not be selling my equities for 25+ years.  Buckle up

Thrugelmir

pip895 said:

Thrugelmir said:

Without factoring in any impact of the virus. Japanese growth figures for the last quarter of 2019 were significantly negative on an annualised basis.  Likewise there's a considerable number of Japanese manufacturing companies that are highly dependent on components and parts from Chinese suppliers. The combination of factors outweighs virus threats alone. 

I cant help thinking lots of places are very reliant on Chinese parts though - including us in the UK - I was talking to someone today who was worrying about having to send people home because he had run out of components.. 
Its the resilience/ downright buoyancy of the Chinese small company fund has me most puzzled though.

Without knowing what holdings the fund has. Difficult to comment.  Not all of China is in lockdown.

takesyourchances

I am just keeping the head down and investing as normal, quite a drop this last couple of days, if I had more ISA allowance left I would be adding in more. Will re-invest dividends too.