Markets - Minor Correction? (Edit: Question Answered)

Zorillo

I've loaded  both my LISA and JISA barrels but not yet pulled the 'buy' trigger. 

Thrugelmir

Zorillo said:

I've loaded  both my LISA and JISA barrels but not yet pulled the 'buy' trigger. 

What's the envisaged trigger? 

Zorillo

I think it will get 'worse' yet. 

bungleberg

I’m wondering if it’s too soon to put 10k into the FTSE 100 tracker. Wish I had a crystal ball 🤓🤓

jamei305

bungleberg said:

I’m wondering if it’s too soon to put 10k into the FTSE 100 tracker. Wish I had a crystal ball 🤓🤓

Tomorrow is as good as any time. At least you won't look back in ten years and regret investing at the all-time high

Thrugelmir

Zorillo said:

I think it will get 'worse' yet. 

Until there's trading updates from major companies. The impact on company profitability will remain clouded in fog. China now accounts for 20% of global gdp. The phrase used to be when the USA sneezes the world catches a cold. Times have changed. Nor will all sectors be hit equally.  

DairyQueen

ffacoffipawb said:

Just cutting my drawdown from 3.5% to 3% to conserve capital. 2 years drawdown gone in 2 days. Easy come easy go i suppose.

i did a -40% stress test and the numbers still work at 3.5% drawdown, but temporarily reducing to 3% as a precaution.

Thanks for posting. I am interested in how those in drawdown are responding. It's one thing to sit tight if markets correct when decades from retirement and quite another to follow a drawdown strategy that may require placing deals that are (now) counterintuitive. 

Are you using any specific strategy? Selling bonds? Switching to cash reserve? Do you have specific triggers for suspending/reducing drawdown?

ffacoffipawb

DairyQueen said:

ffacoffipawb said:

Just cutting my drawdown from 3.5% to 3% to conserve capital. 2 years drawdown gone in 2 days. Easy come easy go i suppose.

i did a -40% stress test and the numbers still work at 3.5% drawdown, but temporarily reducing to 3% as a precaution.

Thanks for posting. I am interested in how those in drawdown are responding. It's one thing to sit tight if markets correct when decades from retirement and quite another to follow a drawdown strategy that may require placing deals that are (now) counterintuitive. 

Are you using any specific strategy? Selling bonds? Switching to cash reserve? Do you have specific triggers for suspending/reducing drawdown?

One year drawdown in SIPP cash, investment trust dividends replenishing the cash.

This week isnt great but cant do anything now.

DairyQueen

Ironically, as drawdown will begin for us in just over a year and I was becoming a tad jittery at recent rises, last week I reviewed my attitude to risk and rebalanced our portfolio. Marginally increased OH's long term allocation to China and US Small Cap (bad timing), decreased my medium term exposure to equities and increased my investment grade bonds and cash (good timing). Also sought forum views on whether or not to move any cash reserved for drawdown years 1-5 into money market funds. Decided that fees negate most benefit and I would rather take the inflation hit for now and review at year end (timing irrelevant).

Combined portfolio has benefited from more downside protection so overall timing was good.

After several years of bi-annual testing the crystal ball has finally worked.

Audaxer

DairyQueen said:

ffacoffipawb said:

Just cutting my drawdown from 3.5% to 3% to conserve capital. 2 years drawdown gone in 2 days. Easy come easy go i suppose.

i did a -40% stress test and the numbers still work at 3.5% drawdown, but temporarily reducing to 3% as a precaution.

Thanks for posting. I am interested in how those in drawdown are responding. It's one thing to sit tight if markets correct when decades from retirement and quite another to follow a drawdown strategy that may require placing deals that are (now) counterintuitive. 

Are you using any specific strategy? Selling bonds? Switching to cash reserve? Do you have specific triggers for suspending/reducing drawdown?

I'm also interested in when people make the decision to sell capital for income when they are not taking natural income. After such a good year I would think retirees looking to drawdown from Total Return, should have drawn down income for the coming year when they rebalanced at the year end? I wouldn't like to be in the position of needing to sell capital for income at this time when most funds seem to be losing value.