Economy crash =/= stock market crash?

InvesterJones

billy2shots said:

Feeling pretty lucky YTD. 

I'm down 7% across SiPP and ISAs (mine and wife's). 

I also stopped contributing into my SiPP in January due to restructuring my Ltd company. I did add £20k cash into it before the tax year ended in April and it's sat uninvested. I have another £30k waiting to be paid in and another £60k should be doable before December (carry forward) 

So fully understanding the risk and past evidence of market timing, I need to decide when to buy back in with over £100,000 this calendar year. 

Nice situation to be in, and good that you understand about market timing etc. All I'd say is you can give yourself as many chances as you like by splitting (or just give up and drip feed).

Type_45

Or stay in cash.

masonic

Type_45 said:

Or stay in cash.

That's not risk free itself. You yourself pointed to the plight of Sri Lanka, where their currency is now all but worthless. A few years of high inflation, or even long term exposure to normal levels of inflation, makes quite a dent. The global economic collapse you have predicted may well start with cash devaluing as it did in Sri Lanka.

Type_45

masonic said:

Type_45 said:

Or stay in cash.

That's not risk free itself. You yourself pointed to the plight of Sri Lanka, where their currency is now all but worthless. A few years of high inflation, or even long term exposure to normal levels of inflation, makes quite a dent. The global economic collapse you have predicted may well start with cash devaluing as it did in Sri Lanka.

I've also heard it said that the USD could fail upwards. It's been strong lately, and when it finally meets it's demise it could be at its strongest. I'd need to re-watch that particular interview.

Have you also seen today's 10y treasury yield? Apparently US stocks are not what you want to be in right now. 

masonic

Type_45 said:

masonic said:

Type_45 said:

Or stay in cash.

That's not risk free itself. You yourself pointed to the plight of Sri Lanka, where their currency is now all but worthless. A few years of high inflation, or even long term exposure to normal levels of inflation, makes quite a dent. The global economic collapse you have predicted may well start with cash devaluing as it did in Sri Lanka.

I've also heard it said that the USD could fail upwards. It's been strong lately, and when it finally meets it's demise it could be at its strongest. I'd need to re-watch that particular interview.

Have you also seen today's 10y treasury yield? Apparently US stocks are not what you want to be in right now. 

Yes, early indications are that inflation is finally starting to cool (based on Core PCE), so Treasuries are recovering somewhat, price up, yield down. Nice to see a divergence of bonds and equities, even if it is just for a day or two.

Not sure how the inference is being drawn to US stocks, but on valuation terms we certainly aren't anywhere near bargain territory yet.

Type_45

RE:  gold

It's up ~10.28% YTD.  And this is in the face of rising rates and a strong USD, both of which are usually headwinds for gold.  That bodes well for gold when rates start coming down and currencies run into trouble.

Type_45

Any thoughts on this?:

I asked someone whether to keep cash in a S&S account or buy gold/silver tracking ETCs such as SSLN and SGLN.  His response:

"I wouldn't do it unless it were a very small proportion of my overall net assets. Why? Because there are significant (a) volatility and (b) liquidity risks with ETFs, esp. in our modern market environment. (a) means that these ETFs may not trade the way you are expecting in a major systemic sell-off, and (b) means - even worse - that you may not be able to sell in time if the SHTF."

Type_45

The US will officially be in recession tomorrow.

masonic

Type_45 said:

RE:  gold

It's up ~10.28% YTD.  And this is in the face of rising rates and a strong USD, both of which are usually headwinds for gold.  That bodes well for gold when rates start coming down and currencies run into trouble.

I don't think it has yet met expectations for performance, given what has already happened. There seemed to be an expectation it would have done a lot better, although I hold little regard for commentator expectations. It is possible there is better yet to come, or not.

Type_45 said:

Any thoughts on this?:

I asked someone whether to keep cash in a S&S account or buy gold/silver tracking ETCs such as SSLN and SGLN.  His response:

"I wouldn't do it unless it were a very small proportion of my overall net assets. Why? Because there are significant (a) volatility and (b) liquidity risks with ETFs, esp. in our modern market environment. (a) means that these ETFs may not trade the way you are expecting in a major systemic sell-off, and (b) means - even worse - that you may not be able to sell in time if the SHTF."

It is true that ETFs can trade at a premium or discount to NAV during periods of unusually high volatility. It is a temporary issue that would settle down when markets become orderly again. But it is a risk if you have the intention of making trades at such times. Smaller ETFs are going to be more susceptible, so there is an argument for choosing from among the largest. For a gold ETC, you'll probably still be able to trade more quickly than if you have a stash of sovereigns buried in the garden. Though I did warn a long time ago in your other thread that if you really believe in total financial armageddon, it would be unwise to hold any form of electronic investment.

coastline

Type_45 said:

Any thoughts on this?:

I asked someone whether to keep cash in a S&S account or buy gold/silver tracking ETCs such as SSLN and SGLN.  His response:

"I wouldn't do it unless it were a very small proportion of my overall net assets. Why? Because there are significant (a) volatility and (b) liquidity risks with ETFs, esp. in our modern market environment. (a) means that these ETFs may not trade the way you are expecting in a major systemic sell-off, and (b) means - even worse - that you may not be able to sell in time if the SHTF."

In the 1987 crash the brokers simply took the phones off the hook. Basically it didn't matter what you had you couldn't trade. Even today on this MSE forum and other financial forums you hear posters saying they couldn't get a price on a busy day. That's when markets are moving just 5% or more. All platforms have their limitations although I haven't had this problem with mine.
Pretty understandable you wouldn't load up with much in SSLN and SGLN. Both are fair sized funds SSLN over £400m and SGLN a massive £13bn. Wouldn't have thought there'd be problems trading them and the spread would be reasonable. Do you hear of any major problems from investors regarding these. Might be but I've never heard of any.?
If you want to see historical prices during recent the volatility in February see below..

iShares Physical Gold ETC summary price and performance data – Investors Chronicle

iShares Physical Silver ETC summary price and performance data – Investors Chronicle

ETF's aren't favourites anyway there's even been a recent thread on here. There's issues with the compensation scheme for one. I would have thought sticking with the mainstream iShares and Vanguard camps isn't a bad way of using ETF's. VEVE,VWRL ,ISF to name a few. Have them in a tax wrapper, ISA or SIPP to save any problems. Domicile Ireland , physical replication and UK tax reporting status. See the factsheet for this information.