Sold 50% of portfolio at the bottom, want to reinvest but how?

Type_45

Notepad_Phil said:

Type_45 said:

eskbanker said:

Type_45 said:

A lady I know told me at the time that she sold her investments at the bottom in Spring 2020.  I think she said she was down 75%, from memory.  She's in her late-60s.

At the time I had my money in VLS60, and I didn't even think there had been a crash as I'd only lost about 10%.

VLS60 (Acc) peaked at about £205 in February 2020 before bottoming out at about £168 in March, so a drop of just over 18% from peak to trough - if someone managed to lose 75% at the same time she must have been invested in something pretty racy....

She had an FA of some kind managing it all for her.  He advised her not to sell but she demanded it.  She shouldn't have been involved with whatever it was given her evident risk tolerance (and particularly her age).  I was absolutely gob smacked when she told me.

Her risk tolerance is one thing but being in her late sixties is by no means any reaon in itself to not be involved in investments. Given that she felt the need to ditch her investments then It sounds as if she'd be in the wrong investments even if she'd been in her early twenties.

Mrs Notepads's mother is in her late nineties and has a decent slug of investments to go along with her cash, but she's invested in funds that match her risk appetite.. She'd be in deep trouble if she'd kept away from investments for the last 30 years.

I think it's pretty much universally accepted that older people invest more in bonds, and younger people invest more in equities.

The lady I know was clearly invested in equities. 

masonic

Type_45 said:

Notepad_Phil said:

Type_45 said:

eskbanker said:

Type_45 said:

A lady I know told me at the time that she sold her investments at the bottom in Spring 2020.  I think she said she was down 75%, from memory.  She's in her late-60s.

At the time I had my money in VLS60, and I didn't even think there had been a crash as I'd only lost about 10%.

VLS60 (Acc) peaked at about £205 in February 2020 before bottoming out at about £168 in March, so a drop of just over 18% from peak to trough - if someone managed to lose 75% at the same time she must have been invested in something pretty racy....

She had an FA of some kind managing it all for her.  He advised her not to sell but she demanded it.  She shouldn't have been involved with whatever it was given her evident risk tolerance (and particularly her age).  I was absolutely gob smacked when she told me.

Her risk tolerance is one thing but being in her late sixties is by no means any reaon in itself to not be involved in investments. Given that she felt the need to ditch her investments then It sounds as if she'd be in the wrong investments even if she'd been in her early twenties.

Mrs Notepads's mother is in her late nineties and has a decent slug of investments to go along with her cash, but she's invested in funds that match her risk appetite.. She'd be in deep trouble if she'd kept away from investments for the last 30 years.

I think it's pretty much universally accepted that older people invest more in bonds, and younger people invest more in equities.

The lady I know was clearly invested in equities. 

The transition from equities to bonds when approaching retirement was designed for those who wanted to purchase an annuity, in order to avoid the impact of them cashing in their investments after a stockmarket crash. Nowadays many people stay invested well into retirement and may simply draw down on their investments, so there is no need to invest more in bonds unless your appetite for risk suggests you should, or you may need to access the capital in the short term.

It's hard to think which equities the lady could have been invested in, which, on average fell 75%. Nothing mainstream I'll wager.

Aretnap

masonic said:

It's hard to think which equities the lady could have been invested in, which, on average fell 75%. Nothing mainstream I'll wager.

A portfolio constructed entirely of airlines, pub companies and cruise ship operators perhaps?

(Not that an IFA would have recommended such a portfolio of course). 

Malthusian

Type_45 said:

The lady I know was clearly invested in equities. 

If she lost 75% it's not at all clear what she is invested in. It certainly wasn't a conventional diversified portfolio of equities of the kind that any reputable IFA would generally recommend.

Type_45

Malthusian said:

Type_45 said:

The lady I know was clearly invested in equities. 

If she lost 75% it's not at all clear what she is invested in. It certainly wasn't a conventional diversified portfolio of equities of the kind that any reputable IFA would generally recommend.

She lost 75% (if that's what happened) because she sold her ISA investments against the advice of the Advisor. Had she listened to the advisor then she would probably have more in her ISA now than she had in January 2020.

She employed an advisor, who then invested her money above her risk tolerance, and she then overruled the advisor when asked to leave the ISA alone. Both of them are to blame. 

sevenhills

Type_45 said:

She lost 75% (if that's what happened) because she sold her ISA investments against the advice of the Advisor. Had she listened to the advisor then she would probably have more in her ISA now than she had in January 2020.

A lady in her late sixties would hopefully have a SIPP, maybe she has used her full entitlement.

kuratowski

But what investments did she hold that fell by 75% in Q1 2020?  Because the overall fall in the markets was much less than 75%.  Even looking at two of the worst affected businesses, Ryanair and Intercontinental Hotels, they only fell by 50%.  A diversified portfolio should have not performed that badly.

Type_45

kuratowski said:

But what investments did she hold that fell by 75% in Q1 2020?  Because the overall fall in the markets was much less than 75%.  Even looking at two of the worst affected businesses, Ryanair and Intercontinental Hotels, they only fell by 50%.  A diversified portfolio should have not performed that badly.

Read the thread.

eskbanker

Type_45 said:

kuratowski said:

But what investments did she hold that fell by 75% in Q1 2020?  Because the overall fall in the markets was much less than 75%.  Even looking at two of the worst affected businesses, Ryanair and Intercontinental Hotels, they only fell by 50%.  A diversified portfolio should have not performed that badly.

Read the thread.

....in which it becomes clear that the 75% figure was thrown out there without anything remotely resembling a meaningful explanation!  Relaying a vague second-hand anecdotal tale without any sort of supporting evidence that the alleged drastic drop actually happened seems a pointless activity to me, and does beg the question of what the purpose of doing so was.

Type_45

eskbanker said:

Type_45 said:

kuratowski said:

But what investments did she hold that fell by 75% in Q1 2020?  Because the overall fall in the markets was much less than 75%.  Even looking at two of the worst affected businesses, Ryanair and Intercontinental Hotels, they only fell by 50%.  A diversified portfolio should have not performed that badly.

Read the thread.

....in which it becomes clear that the 75% figure was thrown out there without anything remotely resembling a meaningful explanation!  Relaying a vague second-hand anecdotal tale without any sort of supporting evidence that the alleged drastic drop actually happened seems a pointless activity to me, and does beg the question of what the purpose of doing so was.

I'm trying to spook the markets so that I can buy more stock at a reduced price.