Preparing for the Crash

Michael121

I thought once you sold shares within an ISA you have used that allowance.

valiant24

Michael121 said:

I thought once you sold shares within an ISA you have used that allowance.

No.  You can hold cash within a Stocks and Shares ISA whilst waiting to invest or re-invest.

Thrugelmir

Bobziz said:

Thrugelmir said:

Bobziz said:

Thrugelmir said:

valiant24 said:

If one believes, as do I, that an almighty stock market crash is coming, what is your opinion on the necessary defensive action?

Be selective in your choice of investments. Not all share prices react in a similar fashion. 

Value with strong balance sheets?

During a correction some company share prices still rise. Even if the vast majority fall. Companies undertake a whole range of different activities. During volatile markets stock picking is worth the trouble. 

In order to pick the right companies would you not need to second guess the reason for the correction the first place, or are you saying that there are some companies that will rise regardless ? 

Corrections tend to result in knee jerk reactions, i.e. non-discriminatory.  Good companies don't become bad companies simply because the share price has dropped suddenly (and temporarily). Buyers will step in and take the opportunity to buy into the stock. In 2020 ,110 stocks accounted for 80% of global trading. As I have said previously there's a universe out there that most people don't even know exists. 

sevenhills

valiant24 said:

If one believes, as do I, that an almighty stock market crash is coming, what is your opinion on the necessary defensive action?

That would depend on what you think would cause this crash. Would it be just a UK crash, caused by UK factors? Oil prices and vehicles in general, seem to be struggling at the moment, what would be a defensive stock in your scenario?

Is it true that the 2020 COVID crash was much worse in the UK compared to other countries?

valiant24

sevenhills said:

 Oil prices and vehicles in general, seem to be struggling at the moment, what would be a defensive stock in your scenario?

Not a stock at all.   What is the best haven for profits taken from equities markets?   I suppose the answer is gilts.  Not "other equities", for sure!

barnstar2077

Personally I don't see another big drop in the near future.  I think once covid becomes less of an issue and things start opening again that the markets will go up for a while.

There is always going to be another big drop coming, I wouldn't want to miss out on todays gains trying to guess when it might be though.

maxsteam

ANGLICANPAT said:

Dont actually know about this, but  somewhere in my mind i thought Id briefly read  something about a  method of setting  up your investments  to allow the platform to  auto buy or sell at a price you set

Yes. Every platform I have used has this feature. You can set an instruction to buy share A if the price falls below £2 in the next 3 days and to sell share B if the price goes above £1 before the end of the next day. I use the feature occasionally but I would not use them as a defense against a crash. You could end up trading when spreads are large or at a time when, if you were watching the market, you would decide to wait for things to settle.

valiant24

barnstar2077 said:

Personally I don't see another big drop in the near future.  I think once covid becomes less of an issue and things start opening again that the markets will go up for a while.

There is always going to be another big drop coming, I wouldn't want to miss out on todays gains trying to guess when it might be though.

Yes.  But I do want to bail out, rightly or wrongly, and wish to know what the safest store for my money within an Isa/SIPP platform is while I wait, wallowing in my error.

Steve182

valiant24 said:

barnstar2077 said:

Personally I don't see another big drop in the near future.  I think once covid becomes less of an issue and things start opening again that the markets will go up for a while.

There is always going to be another big drop coming, I wouldn't want to miss out on todays gains trying to guess when it might be though.

Yes.  But I do want to bail out, rightly or wrongly, and wish to know what the safest store for my money within an Isa/SIPP platform is while I wait, wallowing in my error.

Safest place is cash, no risk, but also no return, at least no return for cash within any normal S/S ISA that I know of.

I'm amazed that global markets have reacted as positively as they have following the initial drop due to Covid.  As Barnstar said, it's hard to see crashes happing in the near future. What could happen soon that could compare with Covid? 

wmb194

valiant24 said:

wmb194 said:

Outside a Sipp, the easiest, relatively low-effort place to park hundreds of thousands of pounds in a single account is with NS&I i.e. pseudo-gilts. Otherwise just spread it across multiple ordinary institutions.

Hi.   Thanks for being one of the few responders who actually addressed the question.
However, most of the assets I am talking about are within a SIPP or ISA.  Unless I take the cash outside the wrapper, I can't invest in NSandI, at least to my knowledge.  And obviously I don't want to take the money outwith the wrapper.

For sterling, gilts, then. Either buy them directly - with some brokers you may have to do this over the phone - or find an ETF or fund. If you want minimum volatility closest to cash you'd go short-dated. If you're having trouble seeing what's out there the DMO's website will give you an idea of what's in issue - open a PDF in the link below and scroll to the end, it gives an overview with the ISIN codes that you can search for on your broker's site or on the LSE's.
https://www.dmo.gov.uk/publications/?offset=0&itemsPerPage=20&parentFilter=1275&childFilter=1275|1277&startMonth=1&startYear=1998 (edit: you might need to copy and paste this link rather than just click on it, it looks like MSE is truncating the hyperlink)

I'd presume that you can transfer a S&S Isa that's wholly in cash to an NS&I cash Isa.