Liquidate entire portfolio until virus is over?

port_of_spain

EdGasketTheSecond said:

The simple thing is that gold will always be worth something. You can't say that about equities or cash with any certainty right now.

That's a deflection. My point was you shouldn't be certain about your opinions. You've just changed the subject.

And I notice that you haven't said whether you can afford to be wrong. If you put most of your money in gold/silver, and you happen to have the timing wrong and lose a lot of money, will you be fine because you currently have more money than you need, so losing a lot is not a problem? You've said you won't be earning any more, but not whether you have more money than you need.

It's also a silly argument. Always? When the sun goes supernova, gold, equities and cash will all be toast. Is that your investment horizon?

In the short term, we can be very confident that pounds sterling will be worth something. We don't know exactly how much, because we don't know what inflation will be. But that's no different from gold, which will also be worth something in the short term, but we don't know exactly how much.

And equities (if we mean well-diversified exposure to global equities) will be worth something as long as capitalism is around in some form. Which may not be as long as until the sun goes supernova. But AIUI, I won't need any capital under communism anyway, so this doesn't really concern me ...

Alexland

EdGasketTheSecond said:

The simple thing is that gold will always be worth something. You can't say that about equities or cash with any certainty right now.

I don't have any more certainty that a lump gold will be valuable in future than that humans will need food and energy companies who own assets which serve a useful purpose. It seems possible that gold would become completely irrelevant to how people live in the future. You are the only reason I have given it any of my brain cycles today. I am not anti-gold and would totally understand why someone might chose to put up to 10% of their portfolio in gold.

masonic

Agreed, the only things that one can say have true enduring value in this world are the things people need in order to survive: food, clothing, shelter, healthcare etc, and the entities involved in the provision and supply of those things.

Currency, gold, bitcoin etc. have only subjective value. Though gold does have some industrial uses, its price has little to do with those.

BananaRepublic

EdGasketTheSecond said:

I don't 'know', no-one can say that. I have researched and come to my own conclusions and made my decision. It is no more a 'gamble' than staying in the market or in cash either of which could also end badly; the markets might crash and high inflation could wipe out cash.

Can you explain what 'assume I don't know and go from there means'? Where should I go or what can I do differently other than research as much as possible and come to a decision?

That is where I disagree. Timing the market is speculation, or gambling, it has a high risk. Buying into an established market (UK, Europe, US) and staying there for the long term is lower risk, much lower. Yes the markets could disintegrate but in that case civilisation will have fallen, so I doubt money would be much use then. 

bigadaj

 i dont see covid as the end of civilisation, but certainly a trigger for a correction in an over stretched market. in my opinion it wont be seen as serious in terms of finance and equities as the gfc as that was a situation where it looked the world financial system was in meltdown. from a purely financial perspective its a worthwhile learning experience for many people given virtually unlimited growth for ten years or more,  the collapse of capitalism is in virtually nobodys interest so measures will be put in place to maintain stability whilst tempering peoples expectations of double figure annual growth with low single figure inflation.

Bravepants

I think the last 10 years of growth has certainly made some people complacent that stocks and shares only "go up". This crash will certainly at least temper those expectations, but unfortunately may very well scare future potential investors off, i.e. "I told you it was just like gambling!" I think in general that, for most people, investing in a S&S ISA is quite alien, and they wouldn't dream of it, not knowing even where to start; most people in the world then hold cash. I also suspect half of them don't even know that their pensions are invested in S&S too. The discussions in this thread are quite intense because, well a few of us have an investment "plan" and we all think it's the best for us, but really we are all mostly amateurs in this game let's face it. Some may have DC pensions, but at the end of the day I expect most of those are in passive index funds to keep costs down. I couldn't imagine having the discussion in this thread in my cantine at work. 

bigadaj

Bravepants said:

I think the last 10 years of growth has certainly made some people complacent that stocks and shares only "go up". This crash will certainly at least temper those expectations, but unfortunately may very well scare future potential investors off, i.e. "I told you it was just like gambling!" I think in general that, for most people, investing in a S&S ISA is quite alien, and they wouldn't dream of it, not knowing even where to start; most people in the world then hold cash. I also suspect half of them don't even know that their pensions are invested in S&S too. The discussions in this thread are quite intense because, well a few of us have an investment "plan" and we all think it's the best for us, but really we are all mostly amateurs in this game let's face it. Some may have DC pensions, but at the end of the day I expect most of those are in passive index funds to keep costs down. I couldn't imagine having the discussion in this thread in my cantine at work. 

maybe you should be discussing it in your tontine?

Bravepants

bigadaj said:

Bravepants said:

I think the last 10 years of growth has certainly made some people complacent that stocks and shares only "go up". This crash will certainly at least temper those expectations, but unfortunately may very well scare future potential investors off, i.e. "I told you it was just like gambling!" I think in general that, for most people, investing in a S&S ISA is quite alien, and they wouldn't dream of it, not knowing even where to start; most people in the world then hold cash. I also suspect half of them don't even know that their pensions are invested in S&S too. The discussions in this thread are quite intense because, well a few of us have an investment "plan" and we all think it's the best for us, but really we are all mostly amateurs in this game let's face it. Some may have DC pensions, but at the end of the day I expect most of those are in passive index funds to keep costs down. I couldn't imagine having the discussion in this thread in my cantine at work. 

maybe you should be discussing it in your tontine?

Doh! French or Spanish?...I can get away with my mis-spelling if you mean French!

BananaRepublic

bigadaj said:

 i dont see covid as the end of civilisation, but certainly a trigger for a correction in an over stretched market. in my opinion it wont be seen as serious in terms of finance and equities as the gfc as that was a situation where it looked the world financial system was in meltdown. from a purely financial perspective its a worthwhile learning experience for many people given virtually unlimited growth for ten years or more,  the collapse of capitalism is in virtually nobodys interest so measures will be put in place to maintain stability whilst tempering peoples expectations of double figure annual growth with low single figure inflation.

We were due a correction, and financial indicators were pointing in that direction last year. As to whether this is as serious as the GFC, I am not as sure as you.

Many if not most businesses have limited cash reserves and operate on low margins, as the economy is so competitive thanks to globalisation and the internet. That means we could see a collapse of certain sectors and huge job losses. Retailers on the high street and the restaurant trade were suffering before the lurgy struck. And the huge funds that will be pumped into the economy by the government means huge debt and a concomitant reduction in services (or increase in taxes) in future. Unfortunately this could go on for a long time, I have seen no clear discussion of an exit strategy, other than let the old and inform die as allegedly suggested by Dominic Cummings some time ago.

The one positive aspect is that lending dried up in the GFC and I can’t see that happening. 

The hope is that once this is contained, there will be a dead bug bounce, with people splashing out on social activities and goods, driving a recovery, with the high street having only charity shops, estate agents, a few restaurants and cafes, and opticians, and Amazon and co dominating.

worldtraveller

BananaRepublic said:

EdGasketTheSecond said:

I don't 'know', no-one can say that. I have researched and come to my own conclusions and made my decision. It is no more a 'gamble' than staying in the market or in cash either of which could also end badly; the markets might crash and high inflation could wipe out cash.

Can you explain what 'assume I don't know and go from there means'? Where should I go or what can I do differently other than research as much as possible and come to a decision?

That is where I disagree. Timing the market is speculation, or gambling, it has a high risk. Buying into an established market (UK, Europe, US) and staying there for the long term is lower risk, much lower. Yes the markets could disintegrate but in that case civilisation will have fallen, so I doubt money would be much use then. 

In a simplistic way, just looking at the likes of personal pensions, unless you work in the public sector, and probably still have a salary based, 100% inflation index linked for life pension, often largely subsidised by the taxpayer, until now, and, I'm sure, massively so in the near future, at least, your private pension fund investments are largely a casino bet anyway!

I've said for well over a decade now, that in the UK, and indeed largely globally, we've been heading towards a two-tier retirement society. Those in the public sector, who will probably have a very comfortable retirement, whatever happens in the overall economy, and the majority of those in the private sector, who'll probably end up scraping together a meagre retirement, but whilst still subsidising the pensions of those in the public sector!

I have no doubt, whatsoever, that this will be the case now, and massively more relevant going forward now, than in any time, ever, in my generation, at least!