Market Correction Strategy

JohnRo

The best strategy is obviously to panic sell everything and crystalise all the paper losses. Then buy back in when the panic is over and the market has recovered, prices have risen and the mood calmed... it's a winning strategy!

Failing that just stop looking at it and do something useful instead, you should be invested for the long term so this temporary rout is almost certain to prove an insignificance in that grand scheme.

It sounds like you've over invested, invested way beyond your risk tolerance or both if you're starting to panic.

Ordinary seasonal flu affects millions and directly kills or contributes to the death of hundreds of thousands of people woldwide each and every year yet that appears to go ignored by markets. I suppose you could argue it's priced in but I have my doubts.

From what little I have read it sounds like covid-19 isn't even a particularly dangerous strain of the various flu viruses.

IMHO this is a massive overreaction. A bonanza for bargain hunters though.

Albermarle

From what little I have read it sounds like covid-19 isn't even a particularly dangerous strain of the various flu viruses.
Then you have read wrong . . It is true more people die from flu, as a lot more people catch it than this virus ( so far anyway) However the CoronaVirus has a % death rate, ten to twenty times that of flu 

IMHO this is a massive overreaction. A bonanza for bargain hunters though.
In this case you might well be right 

JohnRo

Albermarle said:

Then you have read wrong . . It is true more people die from flu, as a lot more people catch it than this virus ( so far anyway) However the CoronaVirus has a % death rate, ten to twenty times that of flu

That's somewhat presumptious, the true scale of the numbers infected haven't yet been reliably established so death rates are currently elevated. It's the uncertainty more than the virus itself that's driving much of the panic imho.

dunstonh

The problem with looking at the figures regarding deaths is the size of the sample it includes.   e.g. how many dead compared to the population of Wuhan gives one figure.   How many dead compared to those that contracted the virus in Wuhan gives another.  How many compared the population of the Hubei province (which Wuhan is in)?  How many compared to the population of China?   How many dead compared to those that have contracted and recovered vs those that have contracted but not yet given the all clear?

all these variations give a different mortality rate.   8% of those that contract it die.   if the whole of the UK contracted it, that is 5 million deaths.   

The media seems to flit between using the lower or the higher rates depending on what they want to say in their article.

Thrugelmir

JohnRo said:

The best strategy is obviously to panic sell everything and crystalise all the paper losses. Then buy back in when the panic is over and the market has recovered, prices have risen and the mood calmed... it's a winning strategy!

You'd have missed the dividends paid and the potential gain from reinvesting in the interim. 

JohnRo

Thrugelmir said:

JohnRo said:

The best strategy is obviously to panic sell everything and crystalise all the paper losses. Then buy back in when the panic is over and the market has recovered, prices have risen and the mood calmed... it's a winning strategy!

You'd have missed the dividends paid and the potential gain from reinvesting in the interim. 

Oh yeah...

ffacoffipawb

Think I will just go and hang myself. Devastated.

Thrugelmir

JohnRo said:

Thrugelmir said:

JohnRo said:

The best strategy is obviously to panic sell everything and crystalise all the paper losses. Then buy back in when the panic is over and the market has recovered, prices have risen and the mood calmed... it's a winning strategy!

You'd have missed the dividends paid and the potential gain from reinvesting in the interim. 

Oh yeah...

Not forgetting the share spread, dealing charges and stamp duty you'll incur in buying and selling your IT's. 

Prism

ffacoffipawb said:

Think I will just go and hang myself. Devastated.

Where you previously thinking of selling some of your funds for capital during the next few months? If not then this doesn't really effect you (yet). You are still going to get the dividends. Sit tight, don't worry. This all happened before just 18 months ago

mikejtforum

Stick it out, look the other way. The way I look at it, the monthly drip feed I pay into my ISA will now be buying my funds at a discount.