Liquidate entire portfolio until virus is over?

BrockStoker

All these attempts to call what the markets will do are a complete waste of time and energy.

I'm not claiming to have a crystal ball, but there are a couple of scenarios there which are plausible given the current state of the situation. While we don't know how/when people are going to react, algorithms are fairly predictable, and we know that when they kick in, falls can be hard and fast.

I also think, if that kind of scenario does unfold, it's more likely to be in the next few days, rather than the next few months, although anything is possible of course.

I honestly don't see the harm in trying to guess what will happen, and examining the possibilities. While you may be aware of all that is going on at the moment, others might not be as well informed.

Thrugelmir

masonic said:

EdGasketTheSecond said:

I think we might see a brief rally now before another leg down as a lot of shares have been temporarily oversold; but thats just my humble opinion.

I hope you are right. At the end of the day this will have a short-term impact on the earnings of the average company. 

Financially surviving the impact is the biggest challenge. Flybe goes bust. Leaves wake of unpaid bills elsewhere. Who supplys who? 

Thrugelmir

Mickygg said:

It’s interesting reading through the various comments. What a lot of people are missing off their posts are years to retirement. This is key.
I personally have about 20 years to retirement so I’m not worried in the slightest. Seeing my investments go down is frustrating on one hand but I’m buying with cash I purposely left to capitalise on a market correction. Drip feeding in so as the market falls I buy a bit more at a lower price. 

The given of a stock market is there will be rises and falls. This creates risk and opportunities for people looking to grow investments over the long term, without such risks there would be no investing as it would be called cash. We were due a big fall and this could be it but no one knows what the bottom will be. People selling or sold out, what will be your trigger point to buy back in?

The people who should be worried are those people looking to retire soon and haven’t rebalanced. I would be anxious if that was me. 

To answer the OP under no circumstances am I selling. It’s just a paper loss and will climb back up in time. It may be months or even years but it will bounce back.

The one certainty is uncertainty. Until you've experienced a number of crises first hand you won't formulate a final personal plan. As there'll always be something different to contend with that comes along. Something that works. May not work forever.  

kinger101

BrockStoker said:

All these attempts to call what the markets will do are a complete waste of time and energy.

I'm not claiming to have a crystal ball, but there are a couple of scenarios there which are plausible given the current state of the situation. While we don't know how/when people are going to react, algorithms are fairly predictable, and we know that when they kick in, falls can be hard and fast.

I also think, if that kind of scenario does unfold, it's more likely to be in the next few days, rather than the next few months, although anything is possible of course.

I honestly don't see the harm in trying to guess what will happen, and examining the possibilities. While you may be aware of all that is going on at the moment, others might not be as well informed.

Algorithms are entirely predictable by definition. Stock markets aren't. Technical analysis is woo.  If there were any rules for predicting market behavior, the investment banks would have fired their analysts decades ago and replaced them with fairly simple machine learning tools, rather than relying on the margin from trades.  

tropic_of_Username004

BrockStoker said:

While we don't know how/when people are going to react, algorithms are fairly predictable, and we know that when they kick in, falls can be hard and fast.

It's fine to talk about how algorithmic trading can affect markets. And it can even useful to enable one to put market news into context (but mainly so that one is then better placed to shrug and ignore it ).

However, even if we have a rough idea of what kinds of algorithms may be deployed, we still don't know exactly which algorithms are being deployed by whom, and it's not predictable exactly how all these algorithms will interact with one another, as well as with human traders and on-going news flow. Especially since many market players are constantly developing their algorithms, partly in order to react to other algorithms, and with techniques some of which are not publicly disclosed.

So it's fine to say that falls may well be harder and faster because of algorithms. Though there will be exceptions even to that.

What is harder is knowing what will trigger falls or rises. For instance, if it's pretty obvious that a piece of good/bad news will come out next week, then why would the market wait to react to it next week, when it could have already moved in anticipation, when it became pretty obvious what would be revealed next week? The market is not just a bunch of dumb algorithms which an amateur human can easily outsmart. It's a combination of algorithms and humans, both of which are often very smart — if it isn't an category mistake to call algorithms smart . Perhaps I should say that they are continually being developed by smart people.

So you can discuss how markets might react. But that shouldn't lead to a decision to trade in an attempt to beat the market. It should lead to an understanding of the different ways things might go, so that one is better prepared to stick to one's original plan (and that plan should involve very little "trading" — it could sensibly involve a little light rebalancing, or just doing nothing).

snooloui

I think the worst is yet to come. The virus has been underestimated by governments around the world. Italy is being locked down which is going to cause even more pain to an already struggling economy and the EU as a whole. If other countries take similar measures, then an economic crisis on the scale of 2008 is not out of the question, surely?

bostonerimus

BrockStoker said:

All these attempts to call what the markets will do are a complete waste of time and energy.

I'm not claiming to have a crystal ball, but there are a couple of scenarios there which are plausible given the current state of the situation. While we don't know how/when people are going to react, algorithms are fairly predictable, and we know that when they kick in, falls can be hard and fast.

I also think, if that kind of scenario does unfold, it's more likely to be in the next few days, rather than the next few months, although anything is possible of course.

I honestly don't see the harm in trying to guess what will happen, and examining the possibilities. While you may be aware of all that is going on at the moment, others might not be as well informed.

So what are you going to do? I’m going to do nothing.

chucknorris

EdGasketTheSecond said:

How will you assess when we have 'really crashed' though? What would be your criteria and how would you know it wasn't a bull trap?

Well as most of my additional funds are not available for over 2 years, it would be a fairly long bull trap, but the real point is that it would be just luck to invest at or near the actual bottom, so my aim is to invest at better value, by better value I mean that when you look back in say 5 to 15 years time the price will be higher. So although I would like to invest more near the bottom, it doesn't have to happen, I would happily settle for investing at better value. If the price is not higher sometime over the following 15 years, then there has been one hell of a crash, that I could not have done much about anyway.

bostonerimus

kinger101 said:

bostonerimus said:

. Rather than watching that video use your time more productively and find out exactly why the Golden Ratio is the most irrational of numbers.

Weren't they signed to Factory Records?

Well it was a very irrational signing then

masonic

Thrugelmir said:

masonic said:

EdGasketTheSecond said:

I think we might see a brief rally now before another leg down as a lot of shares have been temporarily oversold; but thats just my humble opinion.

I hope you are right. At the end of the day this will have a short-term impact on the earnings of the average company. 

Financially surviving the impact is the biggest challenge. Flybe goes bust. Leaves wake of unpaid bills elsewhere. Who supplys who? 

Flybe has been in trouble for some time. If it wasn't this that tipped it over the edge it would have been something else. There will no doubt be other casualties, but I don't believe a significant proportion of the companies that make up global markets will fail in this manner. After all, as someone else mentioned, demand for goods and services for the most part is not going away. Should I be wrong, I may well find I have bigger problems than how much my assets are worth.