Things to learn from this terrible situation.

Notepad_Phil

veryintrigued said:

So what lessons have you learnt or have had reinforced?

It's reinforced to me that this MSE forum is a great place to come to for some sane commentary (alongside the occasional insane piece).

Also that I'm 100% happy with my pension portfolio split of equities and cash. I've been early retired for a few years now and had been living off the yield, so having the big cash position has meant that I can sleep easy at night without having to worry about eating into the equities because of the impending dividend drought that seems likely to last for a while.

ColdIron

McNinian said:

Gilts and bonds? 
BoE/gov signalled to anyone who's not comatose yesterday with the announcement they're not going to bother with the figleaf of the QE circuitous route of Blighty borrowing from itself interest free and to just print it (I.e. enter digits at a computer terminal) to transfer it over to the Treasury. Blighty, Euroland and Fedland are in a race to reduce the purchasing power of their currencies to zilch.

It's the Ways and Means facility and the idea is that it's short term and needs to be repaid. You might like to read this

https://capx.co/no-the-government-still-hasnt-found-a-magic-money-tree/

quirkydeptless

I've learnt that I'm comfortable with the level of risk in my portfolio and can continue with my investment plan un-emotionally through a crisis. I have had no regrets about not selling my equity as it was getting pummelled as my defensive assets have done their job and would be sufficient to live off if required.

I've also learnt that I can work from home full time!

I've also leant what some more of my neighbours look like, from seeing them clapping on Thursday nights.

Old_Lifer

We are only three weeks into this 'war'  and already this way of life is starting to seem quite normal.   Humans adjust to whatever life throws at them.  This feels like a war,  with  'casualty' figures released daily.

At first we had those who  were financially secure  and  who,  acting out of self interest cleared the supermarket shelves,   leaving those on lower  incomes for whom life is a daily struggle to buy what they could afford from what was left.    Now the stockpilers  have spare bedrooms full of goodies and things are returning to normal.   Adversity brings out the  worst in some people  but the   best in the vast majority.   Plenty of people are now stepping forward to  help the NHS  or to help those in need.

The present situation teaches us that we undervalue  some sections of society  and take too much for granted.   Do we really need all that stuff that the advertising industry tells us we should have?

Prism

ColdIron said:

McNinian said:

Gilts and bonds? 
BoE/gov signalled to anyone who's not comatose yesterday with the announcement they're not going to bother with the figleaf of the QE circuitous route of Blighty borrowing from itself interest free and to just print it (I.e. enter digits at a computer terminal) to transfer it over to the Treasury. Blighty, Euroland and Fedland are in a race to reduce the purchasing power of their currencies to zilch.

It's the Ways and Means facility and the idea is that it's short term and needs to be repaid. You might like to read this

https://capx.co/no-the-government-still-hasnt-found-a-magic-money-tree/

Thanks for that. Provides a bit of detail about where the money for furloughing might come from. I wonder if the US Fed uses a similar mechanism

BananaRepublic

I’ve learnt that my investment strategy, honed over three decades, is sound but life can still throw a curved ball. “The best laid plans o mice an men gang aft a-gley.” 

Today is the last official day of work before I start provisional early retirement. Nice timing eh? Fortunately I have over £60,000 in cash which was intended to act as a safety net to avoid cashing in investments if a crash happened. It was pretty obvious that a crash was coming but I couldn’t figure out what the catalyst would be. At least we now know. So much for spending an hour or two each day at the ice rink. 

Incidentally, loads of financial experts were predicting a crash and confidently stating that it would be a modest one compared to the GFC. Aren’t experts great? 

Aminatidi

That cash in the bank lets you sleep at night.

That having most of my wealth in nice cautious funds that "won't make you much money" like Personal Assets and Capital Gearing Trust also don't lose you much money.

And that thinking you know your tolerance for volatility isn't necessarily the same as you find when you're seeing events played out live in front of you 

Thrugelmir

BananaRepublic said:

Incidentally, loads of financial experts were predicting a crash and confidently stating that it would be a modest one compared to the GFC. Aren’t experts great? 

History repeats itself over and over again. 
"Financial disasters happen when the last person who can remember what went wrong last time has left the building. "

Mothman

Just retired and a few months ago I was questioning myself as to whether I was crazy holding a 5yr income buffer in cash. Now I'm worried as whether a 5yr cash buffer will actualy be enough to see us through this

Thrugelmir

Reinforcement of the old saying. 
"“Bull markets are born on pessimism, grown on scepticism, mature on optimism, and die on euphoria,”
John Templeton then went onto say.
"“The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.”
Words said in 1954.