Who's going to do well?

kinger101

Alistair31 said:

Having a “release” is good for the immune system, or so I read...

Kyle Walker presumably thought so too.

Username999

TPL - Texas Pacific Land Trust.
$513.24

BananaRepublic

Alistair31 said:

Having a “release” is good for the immune system, or so I read...

Regular exercise boosts the immune system. There is a gland called the thymus situated in the chest which is an important part of the immune system. Normally it shrinks to almost nothing by late middle age. Competitive cyclists don’t see this shrinkage. Regular exercise can reduce or stop the shrinkage. Exercise has other benefits to for the immune system. In other words, if you exercise you can have the immune system of someone much younger than yourself. Conversely if you don’t exercise, smoke, overeat and drink you’ll most likely die at a younger age and your last years will be ones of ill health. 

Thrugelmir

Malthusian said:

If a company is certain to do well it's already priced into their share price, so it's no better an investment than it was before coronavirus.

Majority of retail investors buy "markets" not shares. They take no interest in company valuations. Just how well there money is doing (in good times hiding under the duvet in downturns). 

moneysavinghero

Insolvency practitioners

Malthusian

...are mostly LLPs and not open to passive investment. And insolvency is in limbo like everything else. Businesses that would normally go under are being propped up by the government, court proceedings have been suspended.

It may surprise you to learn that the vast majority of bankrupt businesses don't have any money. There is enough money in insolvency to allow a niche group of accountants to make a very good living, but not to provide an attractive return for shareholders, which is why nobody is attempting to raise some equity and take on the big 4.

See what I mean?

DiggerUK

Those who will do well for now, are those who had plans for how to defend their savings from economic storms such as now. Covid19 did not cause this meltdown, it was already baked in, but Covid19 has turned a black swan into a potential perfect storm.

It's the sad truth, but most people invest for their futures without preparing for downturns. Financial advisers always whisper "you may not get back all that  you put in" and then shout loud and long about what you could possibly achieve.

Defensive strategies and how to develop one comes up fairly regularly on threads. Most responders talk about the mythical diversity fable, which has just revealed itself as a fat load of good without proper diversification.

Most market indices show a drop below 5 years ago, even  with dividends I can't see much wiggle room to be more than at break even with 5 years back. I won't mention inflation shortfall..._

Linton

DiggerUK said:

...

Most market indices show a drop below 5 years ago, even  with dividends I can't see much wiggle room to be more than at break even with 5 years back. I won't mention inflation shortfall..._

Out of the 39 Fund Sectors only one, UK Equity Income, shows a net fall in the past 5 years.  The majority of equity sectors are also showing a rise after 3 years.

bowlhead99

DiggerUK said:

Defensive strategies and how to develop one comes up fairly regularly on threads. Most responders talk about the mythical diversity fable, which has just revealed itself as a fat load of good without proper diversification.

What the heck does that second sentence mean? That people suggest diversifying your investments across different asset classes, which is a myth because it is a fat load of good unless you properly diversify your investments across different asset classes?

We get that you have all your eggs in one asset class and are happy with it, but there doesn't seem to be anything fundamentally wrong with creating a defensive portfolio by mixing together different categories or subcategories of assets, and people are encouraged to do that here if they don't want high volatility.

In the two months from 6 Feb to 7 Apr, the Shenzhen composite index is down 0.86% in CNY while Vanguard's FTSE Global All-Cap fund is down 15.5% in sterling and LifeStrategy 100% equity is down 16.2%, so clearly equities in different parts of the world will perform differently at different times.

Defensive funds such as Jupiter Strategic Bond or Personal Assets Trust are down 3.5-4% over that period so clearly mixing together different types of bonds as Jupiter did, or mixing various equities with government bonds, cash and a small amount of gold as Personal Assets did, can produce a less volatile result than using just equities. 

Mixed asset funds using a higher proportion of equities, such as RIT Capital Partners or Vanguard LifeStrategy 60% Equity, are down 8-10% so clearly there is a halfway house available between defensive asset blends and 100% equity blends. 

I see nothing there that suggests that investing in a diverse blend of assets and periodically rebalancing is a 'myth' that's a fat load of good. Clearly a non-diversified portfolio using gold would have been up 11% in that time period, but over the eight and a half years leading up to it (from early Sept 2011 to early Feb 2020) it would only have been up 4%, while Jupiter, Personal Assets and RCP gave a return in the 50-100% range and the global equities-only vehicles were in the 180-200% range.

To me, that suggests that a very good way of preparing for the future is to be properly diversified across different classes and sub-classes of assets to access a good range of positive returns without needing to tolerate the very highest levels of volatility. However, one would expect that those who tripled their money by being in equities between 2011 and February this year are not so concerned that 'even with dividends, DiggerUK can't see much wiggle room' for them to get back to the Feb highs over the coming five years. One wouldn't invest exclusively in the asset classes with the highest potential long-term returns if concerned about short-term (five year) returns.

What we preach here is investing at a level with which you feel comfortable. No doubt people who didn't think there could be a short sharp shock followed by long recession, which is something that *is* mentioned when people sound like they have not considered the various outcomes from a high-equities portfolio, will have learned some sort of lesson from recent market events.

DiggerUK

https://www.bbc.co.uk/news/business/market-data

All of those market indices show a calamitous fall from 5 years ago. We all accept that volatility over a few months is neither here nor there. But this picture from five years ago!!!

If this picture remains as is, and the economic forecasts come true, then diversification in equities is a dangerous place to be.
Could posters at least offer suggestions as to how people move portfolios in to defensive positions. Merely coming out with the mantra of 're allocating' and 'diversifying' is serving up bones with no meat..._