Liquidate entire portfolio until virus is over?

EdGasketTheSecond

I took the decision to dump shares and buy gold/silver for now but I am in the 'tail of the distribution' of what people are doing. Most are rebalancing, just holding (time in the market argument), or adding because shares are cheaper now than a month ago and think they have a bargain. All opinions are good, that's why we can have a discussion.

MaxiRobriguez

EdGasketTheSecond said:

I took the decision to dump shares and buy gold/silver for now but I am in the 'tail of the distribution' of what people are doing. Most are rebalancing, just holding (time in the market argument), or adding because shares are cheaper now than a month ago and think they have a bargain. All opinions are good, that's why we can have a discussion.

People are different too.

I'm buying equities (and are hoping they fall further so I can buy more) because I'm 32 and what I'm buying now will be with me 50 years later. 

Linton

EdGasketTheSecond said:

I think FTSE might drop 30% from here over the coming months BUT depends if there is another huge stimulus as that keeps prices up. Why, well the financial hit to companies will be huge; most are no longer paying dividends, some won't survive. Spending will take a while to pick up, supply chains will be hampered for months. I expect the financial upheaval that is coming to be as big a hit to people as the virus has been; well anyone with any savings and/or property that is.

Why do you care so much whether there is another 30% drop?  For your jump into gold to make sense you must surely additionally believe that the markets wont recover for another 5-10 years at least, or pehaps never will.

People with investments and property wont be hit unless they need to convert them to cash.  And if they had a short or medium term need to extract significant cash they should not have been predominantly invested in equities in the first place.

Ceme3000

Well come 6th April, I'll still add the max I can to my SIPP and ISA as I've always planned to do.  I doubt I'll have any regrets in 10 years time, regardless of what happens over the next 12 months. 

EdGasketTheSecond

I don't care if there is a 30% drop but I was asked so posted a reply.

Markets could be depressed for 5 to 10 years or they could go up, as in Wiemar Germany, with the hyperinflation and people did much better than being in stocks than cash but they would have done better still being in gold.

Thrugelmir

Bravepants said:

Hmmmm, one thing I'm learning about investing is that reading various peoples' opinions and perspectives can be quite anxiety making, certainly in terms of a potential to be constantly wondering 'Am I doing the right thing?' from one day/week/month[insert investment periodicity here] to the next.

I have a plan, I have thought it through carefully, I have a hedge against investment risk (a cash SIPP and a DB pension), my investment horizon is still 20 years, and I think I will stick to drip feeding my ISA with monthly contributions.

As an investor making rushed decisions is the last thing you should do. Certainly don't be anxious. I've had in interest in stocks and shares for longer than I care to remember. Was fortunate to have up front direct exposure at an early stage of my working life and spent subsequent years in related fields. 
Set your objectives. stick to your plan and modify it carefully over the years as your knowledge and experience grows. There's no right or wrong as such. It's not a competition to see who can accumulate the most wealth. Any fool can take pure casino type punts. 

bowlhead99

EdGasketTheSecond said:

Bravepants said:

Be brave when everyone else is running scared.

I really wish people would stop mis-quoting that. It was meant mean invest in undervalued companies in a market where value was good. At the moment shares are still in an inflated bubble and throwing money at it, far from being brave is just being plain stupid.

While it's not known what the present value of future profits will be after accounting for the full effect of the Covid-19 impact and applying an appropriate discount rate (not least because the level of future profits is only a guess and an appropriate discount rate world similarly be a guess), it seems quite a bold claim that shares are in an 'inflated bubble' compared to where their prices ought to be on a long term view.

I get that this is the only narrative that you can countenance because you are pinning your hopes on metal prices rather than investment in productive industry and want to push that on everyone in the hopes that they buy more gold and silver and push up the market price of your holdings in those commodities. Still, I would be interested if you could provide your analysis of, in what sense, prices of equities are (generalising) in an 'inflated bubble'.

FWIW, my allocation to pure equities plays reduced during March, to allow for selective opportunities going forward. But all this 'everything is inflated, the apocalypse is coming, hyperinflation is coming, etc etc' seems a bit overblown to me (not least because you are a relatively lone voice in saying that, and various competent forum members don't seem to agree).

worldtraveller

CLOSING NUMBERS FROM YESTERDAY:

FTSE 100 @ 5,455 - DOWN 29% FROM PEAK

FTSE 250 @ 14,547 - DOWN 34% FROM PEAK

FTSE ALL SHARE @ 2,991 - DOWN 30% FROM PEAK

DOW JONES @ 20,944 - DOWN 29% FROM PEAK

NASDAQ @ 7,361 - DOWN 25% FROM PEAK

EdGasketTheSecond

bowlhead99 said:

Still, I would be interested if you could provide your analysis of, in what sense, prices of equities are (generalising) in an 'inflated bubble'.

I already gave you the evidence bowlhead99 in a previous post. You replied that you weren't going to waste 30 mins of your time on it!

If you want a quick answer as to why markets are inflated then compare the PE of markets now to their historical average. Compare house prices to average earnings, they are also in a bubble.

m_c_s

It will be interesting to see how the markets react to the next US stimulus package which looks like it could be focussed on internal infrastructure investment. Democrats already indicating support and the level could be another $2 trillion. Will be quite an insight for economists to see what impacts this combined with existing packages of stimulus will have on medium and long term growth and inflation. These stimulus measures are now approaching the 20 to 40% of GDP levels the US committed to during WW2 (1941 to 1945) which is quite astonishing.