Squeaky bum time!

[Deleted User]

shortseller09 said:

Deleted_User said:

Maybe. Maybe not. If there is more blood in the stockmarket then Central Banks will step in as part of a coordinated action. They have been rather successful in doing that; you bet against them at your peril. And the losses driven by algorithms tend to go too far; there seem to be bargains in the market. No doubt Coronavirus has inflicted major losses in the real economy, but if it’s all over in a couple of months then the stocks may well react well. Of course it could also be the beginning of a prolonged bear; we have no way of knowing

If by successful you mean they have created a bubble based on mis-allocation of resources, then you are right, and yes, betting against them is foolish. Doesn't take away the fact that it is purely a can-kicking exercise, and at some point it will be discredited as it clearly doesn't work other than over-inflating asset markets. What do you mean by bargains?

There is always a problem with saying something IS a bubble. Nobody actually knows until after the bubble pops. Prior to that it’s all a guess. I agree that at some point there will be a bear market. I just don’t know when or what will be the reason. When I talk about “bargains” it’s also a guess. I am just observing that there is institutional trading based on high volatility in the market. It forces some funds to sell, which in turn creates more volatility and the drop overshoots. Also, there is concern of a credit crunch. If that does not materialize then we have conditions for another leg up. 

MK62

ProDave said:

DT2001 said:

ProDave
If I’d followed your ‘advice’ re the FTSE 100 I would not have invested a bonus in 2015 (when the index was just over 7k). Yesterday that index was 6.5k however my pot is 20-25% higher (NOT managed by me but invested with retirement expected within 5 years so relatively cautiously).
If you are investing in equities maybe take note of Warren Buffett’s quotes below. Maybe your timescale is inappropriate. What happens if you invest near the bottom of the 1st part of a double dip. If WB cannot predict corrections and crashes I wouldn’t like to try.
How key is the preservation of your capital to your retirement plans? If so remember the stock market is a gamble

It is a shame this forum is not a bit more helpful. If anyone asks for advice the stock answer is do your own research or pay an IFA to advise you.

Preservation of my capital is important, but I would love to find a way in a HL SIPP that you can earn some return from it without putting it at risk.  The simple "savings fund paying 2%" seems to be missing and there does not seem to be much option but to gamble it to some extent.

Well done for your good returns, but in a market that has barely moved over that time, it won't have come by "time in market"  It will have come by the fund managers actively buying and selling to keep the fund in things that are likely to gain and selling what they feel is likely to fall.  The last week will have been a testing time for them.  But they have more "tools" than us such as shot selling.

There are very low-risk cash funds available to invest in, but they aren't paying anything like 2% at the moment......more like c.0.5%.......the problem though for you, is that once you invest, it kicks in the HL 0.45% platform charge, which more than wipes out the returns (given that you probably get between 0.1-0.2% from HL, sat in cash)
Unfortunately there simply aren't any risk free funds returning 2%.....what you want doesn't currently exist, hence why nobody can really help you there. 

Prism

ProDave said:

DT2001 said:

ProDave
If I’d followed your ‘advice’ re the FTSE 100 I would not have invested a bonus in 2015 (when the index was just over 7k). Yesterday that index was 6.5k however my pot is 20-25% higher (NOT managed by me but invested with retirement expected within 5 years so relatively cautiously).
If you are investing in equities maybe take note of Warren Buffett’s quotes below. Maybe your timescale is inappropriate. What happens if you invest near the bottom of the 1st part of a double dip. If WB cannot predict corrections and crashes I wouldn’t like to try.
How key is the preservation of your capital to your retirement plans? If so remember the stock market is a gamble

It is a shame this forum is not a bit more helpful. If anyone asks for advice the stock answer is do your own research or pay an IFA to advise you.

Preservation of my capital is important, but I would love to find a way in a HL SIPP that you can earn some return from it without putting it at risk.  The simple "savings fund paying 2%" seems to be missing and there does not seem to be much option but to gamble it to some extent.

Well done for your good returns, but in a market that has barely moved over that time, it won't have come by "time in market"  It will have come by the fund managers actively buying and selling to keep the fund in things that are likely to gain and selling what they feel is likely to fall.  The last week will have been a testing time for them.  But they have more "tools" than us such as shot selling.

You can get a 2% return outside of your SIPP (just) but that still barely keeps up with inflation. Inside the SIPP there is no chance
As for the growth over the last 5 years in the FTSE 100 its all down to dividends. Anyway, the truth is that most people invest globally which is more diversified and has recently produced much higher returns. I have almost doubled my investments over the last 5 years.

shortseller09

Deleted_User said:

There is always a problem with saying something IS a bubble. Nobody actually knows until after the bubble pops. Prior to that it’s all a guess. I agree that at some point there will be a bear market. I just don’t know when or what will be the reason. When I talk about “bargains” it’s also a guess. I am just observing that there is institutional trading based on high volatility in the market. It forces some funds to sell, which in turn creates more volatility and the drop overshoots. Also, there is concern of a credit crunch. If that does not materialize then we have conditions for another leg up. 

Well let's be realistic, all serious commentators acknowledge that it is a bubble created by insane monetary policy which distorts markets and funnels capital into stocks in a desperate chase for yield. By all respected measures, stocks are still way overvalued, and prices have lost any correlation with fundamentals or economic growth. I grant you, this could all get re-inflated again and again, until the day it doesn't.

DT2001

ProDave said:

It is a shame this forum is not a bit more helpful. If anyone asks for advice the stock answer is do your own research or pay an IFA to advise you.

Preservation of my capital is important, but I would love to find a way in a HL SIPP that you can earn some return from it without putting it at risk.  The simple "savings fund paying 2%" seems to be missing and there does not seem to be much option but to gamble it to some extent.

Well done for your good returns, but in a market that has barely moved over that time, it won't have come by "time in market"  It will have come by the fund managers actively buying and selling to keep the fund in things that are likely to gain and selling what they feel is likely to fall.  The last week will have been a testing time for them.  But they have more "tools" than us such as shot selling.

I think you have been given quite a bit of advice. 100% equities is inappropriate for a short timescale. If investing do so for the long term. Do not try to second guess the market ups and downs. You cannot get 2% return without risk unfortunately.
Quite a few people on this forum have had positive returns over the last 5 years when the FTSE 100 has fallen slightly and I assume have done so in different ways. Diversification is the key, I believe. My returns are steady, not as good as Mordko and his 9% p.a. Over 3 years passively investing.

Maybe if you want anything other than general advice you’ll need to provide a full picture of your circumstance e.g. you say ‘small’ fund is that £5k or £50k, do you want to draw it down over 3 or 30 years, what other resources do you have. People on here are happy to try and help

Prism

shortseller09 said:

Deleted_User said:

There is always a problem with saying something IS a bubble. Nobody actually knows until after the bubble pops. Prior to that it’s all a guess. I agree that at some point there will be a bear market. I just don’t know when or what will be the reason. When I talk about “bargains” it’s also a guess. I am just observing that there is institutional trading based on high volatility in the market. It forces some funds to sell, which in turn creates more volatility and the drop overshoots. Also, there is concern of a credit crunch. If that does not materialize then we have conditions for another leg up. 

Well let's be realistic, all serious commentators acknowledge that it is a bubble created by insane monetary policy which distorts markets and funnels capital into stocks in a desperate chase for yield. By all respected measures, stocks are still way overvalued, and prices have lost any correlation with fundamentals or economic growth. I grant you, this could all get re-inflated again and again, until the day it doesn't.

I barely seen anyone referring to the current equity situation as a bubble. Some markets are priced higher than their long term averages and are considered expensive such as the US. Meanwhile the UK and parts of Europe are priced pretty much like normal. Besides, current price doesn't always predict your eventual return. Some of the fastest growing companies are already expensive in relative terms. 

[Deleted User]

shortseller09 said:

Deleted_User said:

There is always a problem with saying something IS a bubble. Nobody actually knows until after the bubble pops. Prior to that it’s all a guess. I agree that at some point there will be a bear market. I just don’t know when or what will be the reason. When I talk about “bargains” it’s also a guess. I am just observing that there is institutional trading based on high volatility in the market. It forces some funds to sell, which in turn creates more volatility and the drop overshoots. Also, there is concern of a credit crunch. If that does not materialize then we have conditions for another leg up. 

Well let's be realistic, all serious commentators acknowledge that it is a bubble created by insane monetary policy which distorts markets...

In a word... No. 

ratechaser

So then to ask a slightly different question - if like me you had been heavily weighted towards gilts as a defensive mechanism over the past few months, is now (i.e. Monday) the time to rebalance towards equities?

Or to put it another way - do you see this correction as having run its course already? Was watching the last 10 mins of US trading on Friday, the DJI clawed back 600 points of losses. Not sure I've ever seen that sort of movement before...

Thrugelmir

ratechaser said:

So then to ask a slightly different question - if like me you had been heavily weighted towards gilts as a defensive mechanism over the past few months, is now (i.e. Monday) the time to rebalance towards equities?

Or to put it another way - do you see this correction as having run its course already? Was watching the last 10 mins of US trading on Friday, the DJI clawed back 600 points of losses. Not sure I've ever seen that sort of movement before...

What's fundamentally changed in your view?  

Traders close their positions at the end of the day.  

Username999

ratechaser said:

Was watching the last 10 mins of US trading on Friday, the DJI clawed back 600 points of losses. Not sure I've ever seen that sort of movement before...

Simple, it does that percentage move quite often.
Short sellers closing positions/taking profits before the weekend.