Markets - Minor Correction? (Edit: Question Answered)

aesthetic

And the steep decline continues...
FTSE is now below what it was in 1999.
Yikes!!

2010

aesthetic said:

And the steep decline continues...
FTSE is now below what it was in 1999.
Yikes!!

--------------------- and it can only get worse. 

SonOf

aesthetic said:

And the steep decline continues...
FTSE is now below what it was in 1999.
Yikes!!

Steep decline?   Its not been a steep decline.  Black Monday was over 12% in a day. That is a steep decline.  And that was the day after an over 10% fall.

These one day drops don't make the top 10 falls on the FTSE100.  Indeed, the FTSE100 has had over 80 falls of more than 3% in a day.

Give it time....

Ceme3000

But at what point do you decide it is a good time to buy?.......

Bravepants

Just keep drip feeding!

DairyQueen

2010 said:

aesthetic said:

And the steep decline continues...
FTSE is now below what it was in 1999.
Yikes!!

--------------------- and it can only get worse. 

UK is actually holding-up reasonably well - so far. Analysts are suggesting that this a side effect of the weak pound and of markets that were already relatively undervalued. Plus, we have a recently elected government with a big majority. They are therefore better-placed to make unpopular decisions than, say, the US or EU countries facing elections within a year. Trump, in particular, will play to his domestic audience regardless.

Is it possible that the Brexit shenanigans have actually helped the UK? Happenstance.

Meanwhile across the channel, Europe is taking the brunt. Italy was already the 'sick economy of Europe'. The ECB is out of ammunition. The EU had already begun squabbling over how their EU Brexit-gap budget would be filled. The financial powerhouse (Germany) already at risk of recession.

As perverse as it sounds I am relieved that a global correction appears to be in progress at last. The US in particular has been shooting far too high. 

This is an opportunity for people to sit tight and examine their attitude to risk. Perhaps plan how/when they will rebalance if their current allocation is making them feel a tad sick (!).

I have a note on my desk:  "Market correction? - don't sell."

sparky0138

My mum was waiting on cashback from Fidelity (should be on 5th March) then was going to transfer platforms to Vanguard SIPP. As they don't keep you invested in the same fund during the transfer and she'd be out of the market for a while, I take it this would be a bad time to do it? Would you advise sitting tight until things settle down a bit and just continue monthly deposits with Fidelity?

Her pot's currently worth just over £61,000. She has no intention of selling but as a relatively new investor, it's scary seeing her returns more than half in just a couple of days. 😨

SonOf

As they don't keep you invested in the same fund during the transfer and she'd be out of the market for a while, I take it this would be a bad time to do it?
It may be a good time. It may be a bad time.   Only time will tell.
However, if can be a folly to move platforms to try and save tiny amounts of money during periods of high volatility.  Especially if the platform doesn't pre-fund switches/buys/sells.

DairyQueen

sparky0138 said:

My mum was waiting on cashback from Fidelity (should be on 5th March) then was going to transfer platforms to Vanguard SIPP. As they don't keep you invested in the same fund during the transfer and she'd be out of the market for a while, I take it this would be a bad time to do it? Would you advise sitting tight until things settle down a bit and just continue monthly deposits with Fidelity?

Her pot's currently worth just over £61,000. She has no intention of selling but as a relatively new investor, it's scary seeing her returns more than half in just a couple of days. 😨

- What do you mean by 'cash back'? Is she making a withdrawal? If so, is the withdrawal amount already in cash inside the pension wrapper?

- She hasn't yet applied to transfer? So, no instruction yet to sell her Fidelity fund/s?

- Why have her 'returns' dropped by 50+%? Do you mean that her 'pot' has halved in value this week? Or do you means that the income from the pot has dropped by this %age? Or just that the %age increase over x time period has reduced by 50%? If the latter, over what period? Market investments don't increase on a linear trajectory. They can be very volatile - equities can decrease by 20%+ in a single day and 2+% is common.

Nobody here gives advice (that's against the rules) but you will receive information, ideas and the benefit of others' experiences.

The situation you describe isn't really a problem unless the value of her portfolio has halved this week! That would suggest she is invested in something very risky. More likely that she hasn't understood volatility. She must expect the value to yoyo each day/week/month/year. The upward trajectory can only be seen over the long-term (10+ years) and historically the average has been around 5%p.a over any ten year period.

In your mum's position I would sit tight for the moment. There is always a risk when out of the market but selling now would increase the risk IMO. This week may be a hiccup, or a sneeze, or a cough or full-blown flu. You can't time the market but a sea of red for several consecutive days would be sufficient for me to want to stay invested until things calm down.

Alexland

sparky0138 said:

My mum was waiting on cashback from Fidelity (should be on 5th March) then was going to transfer platforms to Vanguard SIPP.

If this is cashback from their transfer offer then it's worth remembering that Fidelity's full T&Cs on recent offers require her to keep the assets with them for 18 months or they reserve the right to reclaim the cashback.

Alex