Where to invest now the coronavirus has hit the markets

Thrugelmir

masonic said:

2_4 said:

tropic_of_Username019 said:

2_4 said:

Are there any funds designed specifically to try and cash in on any recovery?

I normally invest in very broad funds such as the Vanguard 100 but don’t want to expose myself to companies with a fair probability of not surviving, which I feel such a wide-ranging fund is likely to do.

Why wouldn't you want to expose yourself to companies which may not survive? Their prices have been marked down (further than the market as a whole) to reflect the risk that they won't survive. Some won't survive, and will lose shareholder's money; but others will, and their prices will bounce back more strongly when it turns out they're pulling through after all.

Wanting to avoid such companies is contradictory to wanting to cash in on any recovery. Because it's the worst hit companies that have the potential to let you cash in on a recovery, if things get better sooner or faster than the market is currently allowing for. They also have the potential to do worse than the market, if things turn out worse than current market prices imply.

In short, I see no reason to move away from very wide-ranging funds (such as VLS 100) in the current situation. Such funds include exposure to a broad range of both companies which are worse affected by the current crisis (but with greater recovery potential) and companies which are less affected (but with less recovery potential).

I'm happy to expose myself to companies that MIGHT fail but if I say buy an all-share tracker I'll automatically be buying some companies that are likely to fail. A managed fund should have a better chance of avoiding these... that's my thinking.

But I suppose maybe that's always the case though, in theory, but in reality even if a recovery fund thinks Share A is safe, Share B is a loser and Share C is very risk with a huge upside, they could get it wrong. Hmm, ok, so I suppose it's no different now to normal...is that what you and others are saying?

As per previous comments, in a cap-weighted index, companies known to be likely to fail will make up very little of the index. Companies unknown to be likely to fail can't reliably be avoided.

You'll still be buying the companies concerned and therefore be directly supporting the share price. While others sell out. 

2_4

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

Alistair31

2_4 said:

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

You’d need big stones to make that move right now. 

What if you did come to need a mortgage break 3 or 4 months from now and bank says now and your investments have tanked further ? 

2_4

Big stones. I like that. 

I have my own business, bit of savings, wife that works, no kids, family who could help so think I’d be ok. Obviously no way of knowing what might happen but business is pretty steady, at least in terms of having enough to pay the mortgage.

Thrugelmir

2_4 said:

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

How much will that give you to invest? 

theselfishaltruist

I was thinking it might be a good time to invest in companies which benefit from all of this, so online businesses, pharmaceuticals, medical equipment, grocery chains (which I expect are all doing very well).

I personally went for a gold ETF recently as gold tends to sta stable in a crisis, and gets cheaper as people sell their gold for cash.

I have just left my stock in place, which has all tumbled, and just hoping it all bounces back (eventually).
I don't have any money in normal savings at all, and decided I'm going to put about a 1/3 of all my money into safe bank savings account now.
The interest is terrible, but you are guaranteed not to lose anything (well apart from the fact the interest is lower than inflation).

Grandst2

At this time you need to be a virologist or epidemiologist to answer the question.

ttmatt

theselfishaltruist said:

I was thinking it might be a good time to invest in companies which benefit from all of this, so online businesses, pharmaceuticals, medical equipment, grocery chains (which I expect are all doing very well).

I personally went for a gold ETF recently as gold tends to sta stable in a crisis, and gets cheaper as people sell their gold for cash.

I have just left my stock in place, which has all tumbled, and just hoping it all bounces back (eventually).
I don't have any money in normal savings at all, and decided I'm going to put about a 1/3 of all my money into safe bank savings account now.
The interest is terrible, but you are guaranteed not to lose anything (well apart from the fact the interest is lower than inflation).

I'm think inflation will go to below 1% in the next few months now oil has dropped to record lows and mortgage payments are put on hold etc. These coupled with people basically having nothing to spend their money on most goods won't increase so a safe cash fixed account haven could be the way forward rather than dabbling in stocks and shares... But we've got to jump in there now before they reduce the rates as banks react to the 0.1% interest rate announcement ...

Anyone else any thoughts on this???

DonPatch

2_4 said:

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

I have a thought, the first being that you cant be serious. 
These specific payments breaks are being offered as people are losing jobs, income, livelihoods and you want to take advantage of that lifeline so you can invest? 

So many services are overwhelmed right now and you feel its a good time to call your bank and have them spend time dealing with you rather than people who actually need the payment break? 

2_4

Thrugelmir said:

2_4 said:

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

How much will that give you to invest? 

Around 3k. Not a huge sum but my overall pot isn't huge either.

DonPatch said:

2_4 said:

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

I have a thought, the first being that you cant be serious. 
These specific payments breaks are being offered as people are losing jobs, income, livelihoods and you want to take advantage of that lifeline so you can invest? 

So many services are overwhelmed right now and you feel its a good time to call your bank and have them spend time dealing with you rather than people who actually need the payment break? 

I was asking people's opinions partly for that reason. I'm perfectly aware it is ethically questionable but asking me to have any guilt with regards the banks will fall in deaf ears. Regards my short call impacting the ability of people with genuine need you have a valid point but in reality the impact of me taking a holiday is beyond minuscule.