Vanguard 80% and Coronavirus

w00519773

I have about 15K invested in the Vanguard 80% fund (I cant post a link as I am a new user).  I also have six months of rainy day cash saved up and I make regular over payments on my mortgage (for 7 years).  I am concerned about the dramatic stock market falls.  My fund has lost over 30% in a short period of time, which has eliminated gains made over many many years.  I am debating what do do.  I have three options:

1) Leave the money where it is and increase my monthly contributions to to benefit from lower unit prices.

2) Cash in on the fund (or choose the Vanguard 20% equities) and continue to make monthly contributions to benefit from lower unit prices.

3) Do nothing i.e. leave the money where it is and continue making contributions at the same rate.

In 2008 when there was a recession I chose option one and it worked out ok in the long term.  However, this time seems different.  My research is telling me that there won't be an improvement until a cure if found for coronavirus, which is likely to be next year.  However, I don't have a crystal ball.

I would be very grateful to here what other people have done this week.  I have read lots of other questions on here talking about what others have done earlier this month before the recent dramatic falls.  I am losing sleep.

TBC15

15K today and investing in 2008? Were you banged up for a long stretch?

w00519773

I have bought a house in between.  Saved up for that over many years.

Kendall80

Thats 15k wouldve made a nice conservatory - increased your house value. Seriously though - no-one really knows what to do at the moment. Check your investment tomorrow and you'll likely find it another 8% down. Increasing your mortgage overpayments further may be a sound option if you are uncomfortable with continuing your monthly VLS 80 contributions. There is a lot of discussion around this if you trawl through the many other corona virus threads.

Thrugelmir

4) Do nothing. For the time being overpay your mortgage instead. 
Then you can sleep easy. Knowing that the amount you owe is decreasing. Plenty of time to reconsider your options as events unfold. 

w00519773

Thrugelmir said:

4) Do nothing. For the time being overpay your mortgage instead. 
Then you can sleep easy. Knowing that the amount you owe is decreasing. Plenty of time to reconsider your options as events unfold. 

That is what I thought but then the consensus appears to be that there will be a recession until a cure is found for coronavirus (likely to be next year) - I realise this is all speculation and no-one has a crystal ball!
Therefore I am contemplating just converting the whole thing into cash.  However, this goes against anything I have learnt over 10 years as an amateur investor at best.

TCA

If you sell you crystallise the loss. Don't do it unless you absolutely need the cash in the foreseeable. It's only a paper loss at the moment.

Thrugelmir

w00519773 said:

Thrugelmir said:

4) Do nothing. For the time being overpay your mortgage instead. 
Then you can sleep easy. Knowing that the amount you owe is decreasing. Plenty of time to reconsider your options as events unfold. 

That is what I thought but then the consensus appears to be that there will be a recession until a cure is found for coronavirus (likely to be next year) - I realise this is all speculation and no-one has a crystal ball!
Therefore I am contemplating just converting the whole thing into cash.  However, this goes against anything I have learnt over 10 years as an amateur investor at best.

You should only be investing what you can afford to lose. Ultimately a personal decision for you to make. Factoring in issues such as job security, how big your mortgage is etc etc.  No book is going to guide you through the current times. Everybody is the same boat. When it's finally over you'll never forget the experience and will adjust your investment style accordingly. You cannot buy experience when it comes to investing. 

lolamancity

No advice, but I'm in the same boat as you and I'm absolutely cr4pping myself. Have 2x kids JISA in a LS80, my heart and soul put into growing each kids account, proudly through some horrific times in my life I've always kept putting away for them, and I fully accepted the risks, but who could've ever predicted a situation as severe as like this. I'm too terrified to check the accounts, but I do frequently check the FT charts for the LS80 and the past 3 weeks have given me sleepless nights! I had to log in to my own Nutmeg LISA the other day to deposit my saved up yearly deposit before year end and it'd lost an absolute ton of money, and that was before the situation started getting really dire, so I dread to think what my kids accounts are down to! 

Everything I've ever read on here tells you that if you're in it for a long term, to a) not check the account/s and b) don't change what you're doing, so I have no choice but to keep my monthly direct debit going into each kids account (and my own LS60 which will also be a mess!) and hope for the best! Good luck! 

w00519773

TCA said:

If you sell you crystallise the loss. Don't do it unless you absolutely need the cash in the foreseeable. It's only a paper loss at the moment.

Thanks.  I can afford to lose this money - I just dont want to lose it!

Username999

w00519773 said:

TCA said:

If you sell you crystallise the loss. Don't do it unless you absolutely need the cash in the foreseeable. It's only a paper loss at the moment.

Thanks.  I can afford to lose this money - I just dont want to lose it!

My experience of the DotCom crash says it's not just the loss of money that will effect new "investors". It's the loss of the feel good/smart factor that stays with you for the rest of your life.
The DotCom crash put a generation off the stock market.
IMHO.