Squeaky bum time!

Bravepants

With the two funds in my ISA prices have (so far) fallen back to where they were in October; big deal!

DT2001

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


Someone's sitting in the shade today because someone planted a tree a long time ago.

Our favorite holding period is forever.

[Deleted User]

ProDave said:

I come to this thread to say "told you so"

I have posted a couple of times about what to so with a small DC pension pot now held in a HL drawdown SIPP.  Since transferring it, it has sat as cash, because I have had the feeling the markets looked top heavy. Nothing made me feel safe investing it again, particularly as I want to start drawing it in 3 years.  Over the last 2 years markets like say the FTSE100 have at best been marking time up a bit, down a bit, but no clear direction. That is what gave me no confidence to invest.

We have the B word to deal with adding uncertainty and now we have the C word. That has pushed the markets over the edge, markets that I think have been waiting for a trigger for some time.

I have lost out on some dividends or some modest growth, but at least I can now sit and watch my small pot remain at exactly the same value it was and not have to worry about it...

Unfortunate approach. My 3-year  money weighted annualized return has been 9.1%. Thats by doing nothing; investing into the world passively. That’s after last weeks losses which might well be recoverable within 4 months (normal length of time it takes to get to the top after a correction). You have lost more than “some dividends”.  No asset allocation strategy is more damaging than staying out of the market 

scaredofdebt

No need to panic the markets will recover in time, they always do.

Only panic if you are still in stocks and plan retiring fairly soon, worst case scenario is you may need to wait a year or two longer.

shortseller09

Bear in mind that this correction began from extremely overbought conditions by most parameters. Most crashes occur when the market is already oversold. If you look at the US, the markets are back to levels reached just a few months ago.
The long overdue downturn in the business cycle has surely been triggered (see Chinese PMI data) as the global economy depends on Chinese supply and demand,  and it is possible that the house of cards created by central banks and their obsession with qe (with virtually zero effect on stimulating growth) could be on very shaky ground, with no credible ammunition left. It's unlikely that we will see new highs again anytime soon.

[Deleted User]

shortseller09 said:

Bear in mind that this correction began from extremely overbought conditions by most parameters. Most crashes occur when the market is already oversold. If you look at the US, the markets are back to levels reached just a few months ago.
The long overdue downturn in the business cycle has surely been triggered (see Chinese PMI data) as the global economy depends on Chinese supply and demand,  and it is possible that the house of cards created by central banks and their obsession with qe (with virtually zero effect on stimulating growth) could be on very shaky ground, with no credible ammunition left. It's unlikely that we will see new highs again anytime soon.

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

ProDave

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.

shortseller09

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?

Thrugelmir

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.

Vanguard (as an example) offer plenty of options for those without the inclination to do the leg work themselves. There's no shortage of resources available to make yourself a better informed investor. 

[Deleted User]

”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.  “

There is nothing in the world that can help you. The only way to avoid risk completely is to have nothing.