What did the smart pension money do when values dropped in March/April?

Prism

pip895 said:

Prism said:

pip895 said:

Anonymous101 said:

Absolutely nothing.
My plan is to contribute monthly for another at least another 10 years. Market declines are part and parcel of investing and should have been contemplated beforehand. My strategy is to invest in low cost index funds and leave them alone no matter what. The best investors are either dead or forgot they had the accounts. That should tell you everything you need to know....

I think I disagree with that, although it is true that there is little point in trying to predict what the markets will do, you can see what they have just done.  It doesn't take a great intellect to work out that when markets drop 25% they represent better value than they did does it?  There for, it is a better time to buy and this holds true even if they then drop another 20%.  Taking advantage of market drops and to a point taking profits when markets are soaring to new heights is basic good investing.   

How can you take advantage of market drops unless you are holding back cash which means you are not fully invested? Why would you take profits at any given time when you don't need the money? Just to hold in cash for some future possible drop?
Holding cash on the sidelines and taking profits is not basic good investing. It is a type of more complex investing that is difficult to make work.

Quite a bit of my "non Equity" was in cash as I was struggling to find alternatives I didn't hate - but the % equity was fairly normal for me.  After the crash I obviously had proportionally less equity than normal.
When you pick a percentage equity that suits your risk tolerance - why does it have to be a single number.  Why not a range? I felt more confident that markets would go up after the crash than I did before it - why shouldn't my % change within a defined range?

Ah right, I am with you. I thought you meant holding cash for a buying opportunity but a reasonable amount of rebalancing seems pretty normal. Personally I didn't feel like the crash was extreme enough or long enough to make much of it, so my next two regular contributions bought some cheaper funds and then everything was back to normal.

It would be much harder to judge in a 'real' crash like in 2007/2008 or 2000 where it drops by 20% and then just carries on going down for a few years. Having a hard and fast rebalancing rule can help.

itwasntme001

Prism said:

pip895 said:

Prism said:

pip895 said:

Anonymous101 said:

Absolutely nothing.
My plan is to contribute monthly for another at least another 10 years. Market declines are part and parcel of investing and should have been contemplated beforehand. My strategy is to invest in low cost index funds and leave them alone no matter what. The best investors are either dead or forgot they had the accounts. That should tell you everything you need to know....

I think I disagree with that, although it is true that there is little point in trying to predict what the markets will do, you can see what they have just done.  It doesn't take a great intellect to work out that when markets drop 25% they represent better value than they did does it?  There for, it is a better time to buy and this holds true even if they then drop another 20%.  Taking advantage of market drops and to a point taking profits when markets are soaring to new heights is basic good investing.   

How can you take advantage of market drops unless you are holding back cash which means you are not fully invested? Why would you take profits at any given time when you don't need the money? Just to hold in cash for some future possible drop?
Holding cash on the sidelines and taking profits is not basic good investing. It is a type of more complex investing that is difficult to make work.

Quite a bit of my "non Equity" was in cash as I was struggling to find alternatives I didn't hate - but the % equity was fairly normal for me.  After the crash I obviously had proportionally less equity than normal.
When you pick a percentage equity that suits your risk tolerance - why does it have to be a single number.  Why not a range? I felt more confident that markets would go up after the crash than I did before it - why shouldn't my % change within a defined range?

Ah right, I am with you. I thought you meant holding cash for a buying opportunity but a reasonable amount of rebalancing seems pretty normal. Personally I didn't feel like the crash was extreme enough or long enough to make much of it, so my next two regular contributions bought some cheaper funds and then everything was back to normal.

It would be much harder to judge in a 'real' crash like in 2007/2008 or 2000 where it drops by 20% and then just carries on going down for a few years. Having a hard and fast rebalancing rule can help.

Agree with this.  The crash was just so fast and the rebound fast as well.  At the bottom the levels were only back to where they were in 2017/18 for a global index.  So hardly a bargain, although I did buy some in modest quantities.  I have done some rebalancing at recent highs as my portfolio has grown too much.

pip895

itwasntme001 said:

Prism said:

pip895 said:

Prism said:

pip895 said:

Anonymous101 said:

Absolutely nothing.
My plan is to contribute monthly for another at least another 10 years. Market declines are part and parcel of investing and should have been contemplated beforehand. My strategy is to invest in low cost index funds and leave them alone no matter what. The best investors are either dead or forgot they had the accounts. That should tell you everything you need to know....

I think I disagree with that, although it is true that there is little point in trying to predict what the markets will do, you can see what they have just done.  It doesn't take a great intellect to work out that when markets drop 25% they represent better value than they did does it?  There for, it is a better time to buy and this holds true even if they then drop another 20%.  Taking advantage of market drops and to a point taking profits when markets are soaring to new heights is basic good investing.   

How can you take advantage of market drops unless you are holding back cash which means you are not fully invested? Why would you take profits at any given time when you don't need the money? Just to hold in cash for some future possible drop?
Holding cash on the sidelines and taking profits is not basic good investing. It is a type of more complex investing that is difficult to make work.

Quite a bit of my "non Equity" was in cash as I was struggling to find alternatives I didn't hate - but the % equity was fairly normal for me.  After the crash I obviously had proportionally less equity than normal.
When you pick a percentage equity that suits your risk tolerance - why does it have to be a single number.  Why not a range? I felt more confident that markets would go up after the crash than I did before it - why shouldn't my % change within a defined range?

Ah right, I am with you. I thought you meant holding cash for a buying opportunity but a reasonable amount of rebalancing seems pretty normal. Personally I didn't feel like the crash was extreme enough or long enough to make much of it, so my next two regular contributions bought some cheaper funds and then everything was back to normal.

It would be much harder to judge in a 'real' crash like in 2007/2008 or 2000 where it drops by 20% and then just carries on going down for a few years. Having a hard and fast rebalancing rule can help.

Agree with this.  The crash was just so fast and the rebound fast as well.  At the bottom the levels were only back to where they were in 2017/18 for a global index.  So hardly a bargain, although I did buy some in modest quantities.  I have done some rebalancing at recent highs as my portfolio has grown too much.

I got very little in at the lowest level but still made between 12 and 25% on the monies I invested so well worth the effort.  A long drawn out and sever downturn would have been harder but I would still have been better off having invested the extra monies half way down than I would have been if I had started with the higher equity percentage to start with.  

It is important to have a clear plan as it’s surprisingly difficult even getting on to the platforms and getting prices when markets are at there worst and the spreads even on basic etfs got really bad.  

Joey_Soap

pip895 said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

To paraphrase Terry Smith on this he said something along the lines of "Nobody ever got poor by taking a profit, but the trouble is, nobody gets really rich by doing that either". In other words, keep the winners running. Nobody can time market tops or bottoms, another statement Mr Smith agrees with, so he says they (at Fundsmith) just don't try.

I think keeping winners running works much better when you are thinking about individual shares (what Terry Smith was talking about) rather than a bunch of market/mainly global trackers..

By definition, a tracker fund can never be a winner. It defies all logic.

I think you might be able to claim a US tracker was a winner against cash/bonds or even a UK tracker but I would still want to rebalance rather than let it become an ever increasing proportion of my portfolio.

Of course you can compare anything you like. Apples v bananas or SP500 tracker v UK building society accounts. The tracker wins. But it's a completely pointless "win".

itwasntme001

pip895 said:

itwasntme001 said:

Prism said:

pip895 said:

Prism said:

pip895 said:

Anonymous101 said:

Absolutely nothing.
My plan is to contribute monthly for another at least another 10 years. Market declines are part and parcel of investing and should have been contemplated beforehand. My strategy is to invest in low cost index funds and leave them alone no matter what. The best investors are either dead or forgot they had the accounts. That should tell you everything you need to know....

I think I disagree with that, although it is true that there is little point in trying to predict what the markets will do, you can see what they have just done.  It doesn't take a great intellect to work out that when markets drop 25% they represent better value than they did does it?  There for, it is a better time to buy and this holds true even if they then drop another 20%.  Taking advantage of market drops and to a point taking profits when markets are soaring to new heights is basic good investing.   

How can you take advantage of market drops unless you are holding back cash which means you are not fully invested? Why would you take profits at any given time when you don't need the money? Just to hold in cash for some future possible drop?
Holding cash on the sidelines and taking profits is not basic good investing. It is a type of more complex investing that is difficult to make work.

Quite a bit of my "non Equity" was in cash as I was struggling to find alternatives I didn't hate - but the % equity was fairly normal for me.  After the crash I obviously had proportionally less equity than normal.
When you pick a percentage equity that suits your risk tolerance - why does it have to be a single number.  Why not a range? I felt more confident that markets would go up after the crash than I did before it - why shouldn't my % change within a defined range?

Ah right, I am with you. I thought you meant holding cash for a buying opportunity but a reasonable amount of rebalancing seems pretty normal. Personally I didn't feel like the crash was extreme enough or long enough to make much of it, so my next two regular contributions bought some cheaper funds and then everything was back to normal.

It would be much harder to judge in a 'real' crash like in 2007/2008 or 2000 where it drops by 20% and then just carries on going down for a few years. Having a hard and fast rebalancing rule can help.

Agree with this.  The crash was just so fast and the rebound fast as well.  At the bottom the levels were only back to where they were in 2017/18 for a global index.  So hardly a bargain, although I did buy some in modest quantities.  I have done some rebalancing at recent highs as my portfolio has grown too much.

I got very little in at the lowest level but still made between 12 and 25% on the monies I invested so well worth the effort.  A long drawn out and sever downturn would have been harder but I would still have been better off having invested the extra monies half way down than I would have been if I had started with the higher equity percentage to start with.  

It is important to have a clear plan as it’s surprisingly difficult even getting on to the platforms and getting prices when markets are at there worst and the spreads even on basic etfs got really bad.  

That is why it is good to have alternatives like open ended funds so you do not need to worry about liquidity.  You can also buy into trusts that have a DCM as the DCM should allow for liquidity in the trust to be able to buy.  If the platform keeps on having problems during severe market dislocations, it is time to move platform.  I don't think interactive investor had this problem during the recent "melt-up" after the vaccine news.

Investing is like Chess.  You move incrementally, piece by piece just like you buy or sell bit by bit.  Trying to avoid the "check mates" i.e. long protracted bear market.  Sacrificing pieces to help you to do that i.e. reducing risk at the expense of further gains.  Just like Chess, you do not know what your opponent (the market) is going to do next.  So you have to position to maximise your chance of winning for the long run.  The big difference between the two games is that Chess usually lasts a maximum of a couple of hours but investing should last a lifetime.  Therefore your moves in investing should be very infrequent and should always be taken with a long term (many years) view.

[Deleted User]

Joey_Soap said:

pip895 said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

To paraphrase Terry Smith on this he said something along the lines of "Nobody ever got poor by taking a profit, but the trouble is, nobody gets really rich by doing that either". In other words, keep the winners running. Nobody can time market tops or bottoms, another statement Mr Smith agrees with, so he says they (at Fundsmith) just don't try.

I think keeping winners running works much better when you are thinking about individual shares (what Terry Smith was talking about) rather than a bunch of market/mainly global trackers..

By definition, a tracker fund can never be a winner. It defies all logic.

I think you might be able to claim a US tracker was a winner against cash/bonds or even a UK tracker but I would still want to rebalance rather than let it become an ever increasing proportion of my portfolio.

Of course you can compare anything you like. Apples v bananas or SP500 tracker v UK building society accounts. The tracker wins. But it's a completely pointless "win".

Sorry, but I don’t think you know what you are talking about. Putting your money into S&P 500 is a legitimate investment strategy, recommended by John Bogle and Warren Buffet among others. S&P 500 returned 10% annually since inception in 1920s. I am too lazy to look but guessing it returned something like 15% annualised over the last 10 years.  That beats hands down pretty much any investment strategy, from value to other factors and beats world stock-market returns by about 5% a year.  ALso beats Warren Buffet’s own returns over the last 10 years. 

That’s not how I choose to invest (too risky to have everything in one country) but claiming that S&P 500 only ever beats building society = nonsense.

Prism

Deleted_User said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

To paraphrase Terry Smith on this he said something along the lines of "Nobody ever got poor by taking a profit, but the trouble is, nobody gets really rich by doing that either". In other words, keep the winners running. Nobody can time market tops or bottoms, another statement Mr Smith agrees with, so he says they (at Fundsmith) just don't try.

I think keeping winners running works much better when you are thinking about individual shares (what Terry Smith was talking about) rather than a bunch of market/mainly global trackers..

By definition, a tracker fund can never be a winner. It defies all logic.

I think you might be able to claim a US tracker was a winner against cash/bonds or even a UK tracker but I would still want to rebalance rather than let it become an ever increasing proportion of my portfolio.

Of course you can compare anything you like. Apples v bananas or SP500 tracker v UK building society accounts. The tracker wins. But it's a completely pointless "win".

Sorry, but I don’t think you know what you are talking about. Putting your money into S&P 500 is a legitimate investment strategy, recommended by John Bogle and Warren Buffet among others. S&P 500 returned 10% annually since inception in 1920s. I am too lazy to look but guessing it returned something like 15% annualised over the last 10 years.  That beats hands down pretty much any investment strategy, from value to other factors and beats world stock-market returns by about 5% a year.  ALso beats Warren Buffet’s own returns over the last 10 years. 

That’s not how I choose to invest (too risky to have everything in one country) but claiming that S&P 500 only ever beats building society = nonsense.

Yup, its about 15.5% for a UK investor in GBP and around 13.5% in USD. On a side note, it has been quite difficult for a UK investor to invest specifically in the S&P 500 over the last 10 years. There is only one fund which was launched at the end of 2014. There are several ETFs but these were not available in your typical investment platform from 10 years back. The modern ones allow access to ETFs but there are still a bunch of platforms that still don't allow access to ETFs.

North America or US seems the only option for many, which is probably better anyway.

garmeg

Prism said:

Deleted_User said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

To paraphrase Terry Smith on this he said something along the lines of "Nobody ever got poor by taking a profit, but the trouble is, nobody gets really rich by doing that either". In other words, keep the winners running. Nobody can time market tops or bottoms, another statement Mr Smith agrees with, so he says they (at Fundsmith) just don't try.

I think keeping winners running works much better when you are thinking about individual shares (what Terry Smith was talking about) rather than a bunch of market/mainly global trackers..

By definition, a tracker fund can never be a winner. It defies all logic.

I think you might be able to claim a US tracker was a winner against cash/bonds or even a UK tracker but I would still want to rebalance rather than let it become an ever increasing proportion of my portfolio.

Of course you can compare anything you like. Apples v bananas or SP500 tracker v UK building society accounts. The tracker wins. But it's a completely pointless "win".

Sorry, but I don’t think you know what you are talking about. Putting your money into S&P 500 is a legitimate investment strategy, recommended by John Bogle and Warren Buffet among others. S&P 500 returned 10% annually since inception in 1920s. I am too lazy to look but guessing it returned something like 15% annualised over the last 10 years.  That beats hands down pretty much any investment strategy, from value to other factors and beats world stock-market returns by about 5% a year.  ALso beats Warren Buffet’s own returns over the last 10 years. 

That’s not how I choose to invest (too risky to have everything in one country) but claiming that S&P 500 only ever beats building society = nonsense.

Yup, its about 15.5% for a UK investor in GBP and around 13.5% in USD. On a side note, it has been quite difficult for a UK investor to invest specifically in the S&P 500 over the last 10 years. There is only one fund which was launched at the end of 2014. There are several ETFs but these were not available in your typical investment platform from 10 years back. The modern ones allow access to ETFs but there are still a bunch of platforms that still don't allow access to ETFs.

North America or US seems the only option for many, which is probably better anyway.

What is the only fund for the S&P? Thanks.

Prism

garmeg said:

Prism said:

Deleted_User said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

To paraphrase Terry Smith on this he said something along the lines of "Nobody ever got poor by taking a profit, but the trouble is, nobody gets really rich by doing that either". In other words, keep the winners running. Nobody can time market tops or bottoms, another statement Mr Smith agrees with, so he says they (at Fundsmith) just don't try.

I think keeping winners running works much better when you are thinking about individual shares (what Terry Smith was talking about) rather than a bunch of market/mainly global trackers..

By definition, a tracker fund can never be a winner. It defies all logic.

I think you might be able to claim a US tracker was a winner against cash/bonds or even a UK tracker but I would still want to rebalance rather than let it become an ever increasing proportion of my portfolio.

Of course you can compare anything you like. Apples v bananas or SP500 tracker v UK building society accounts. The tracker wins. But it's a completely pointless "win".

Sorry, but I don’t think you know what you are talking about. Putting your money into S&P 500 is a legitimate investment strategy, recommended by John Bogle and Warren Buffet among others. S&P 500 returned 10% annually since inception in 1920s. I am too lazy to look but guessing it returned something like 15% annualised over the last 10 years.  That beats hands down pretty much any investment strategy, from value to other factors and beats world stock-market returns by about 5% a year.  ALso beats Warren Buffet’s own returns over the last 10 years. 

That’s not how I choose to invest (too risky to have everything in one country) but claiming that S&P 500 only ever beats building society = nonsense.

Yup, its about 15.5% for a UK investor in GBP and around 13.5% in USD. On a side note, it has been quite difficult for a UK investor to invest specifically in the S&P 500 over the last 10 years. There is only one fund which was launched at the end of 2014. There are several ETFs but these were not available in your typical investment platform from 10 years back. The modern ones allow access to ETFs but there are still a bunch of platforms that still don't allow access to ETFs.

North America or US seems the only option for many, which is probably better anyway.

What is the only fund for the S&P? Thanks.

UBS S&P 500 Index fund

itwasntme001

Deleted_User said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

pip895 said:

Joey_Soap said:

To paraphrase Terry Smith on this he said something along the lines of "Nobody ever got poor by taking a profit, but the trouble is, nobody gets really rich by doing that either". In other words, keep the winners running. Nobody can time market tops or bottoms, another statement Mr Smith agrees with, so he says they (at Fundsmith) just don't try.

I think keeping winners running works much better when you are thinking about individual shares (what Terry Smith was talking about) rather than a bunch of market/mainly global trackers..

By definition, a tracker fund can never be a winner. It defies all logic.

I think you might be able to claim a US tracker was a winner against cash/bonds or even a UK tracker but I would still want to rebalance rather than let it become an ever increasing proportion of my portfolio.

Of course you can compare anything you like. Apples v bananas or SP500 tracker v UK building society accounts. The tracker wins. But it's a completely pointless "win".

Sorry, but I don’t think you know what you are talking about. Putting your money into S&P 500 is a legitimate investment strategy, recommended by John Bogle and Warren Buffet among others. S&P 500 returned 10% annually since inception in 1920s. I am too lazy to look but guessing it returned something like 15% annualised over the last 10 years.  That beats hands down pretty much any investment strategy, from value to other factors and beats world stock-market returns by about 5% a year.  ALso beats Warren Buffet’s own returns over the last 10 years. 

That’s not how I choose to invest (too risky to have everything in one country) but claiming that S&P 500 only ever beats building society = nonsense.

Its only ever legitimate if you are in the game of market timing.  Because whenever you chose to overweight a country or sector, or chose a managed fund or chose that single stock, you are market timing whether you plan to hold it for one day or ten years.  Broadly speaking, whenever you move away from how the globe allocates capital, you are in the business of market timing and that even means having 100% global market cap weight passive fund because the globe allocates only about 40% to public equities I believe.

Nothing wrong with market timing per se.  I personally hold many single stocks, managed funds etc.  But market timing it most certainly is.