Economy crash =/= stock market crash?

themoomins

Type_45 said:

adindas said:

Type_45 said:

masonic said:

Type_45 said:

My commodities position has made almost 14% since I bought it two months ago.

I am looking to sell it this week when an attractive price becomes available and I will keep the proceeds in cash. 

This will mean that I am approximately 27% in cash.

I think you've done well to catch the end of that trend. I was sceptical it had much further to run. So seems a sensible move to lock in those gains. With a slice of your metal holdings you'll have something resembling a bonds proxy when combined with this cash, but without the interest rate sensitivity.

Yes, it should then be quite a defensive position after I sell the commodities shortly.

Gold (some physical + SGLN) = 30%
Cash = 27% (most of which I will leave in my S&S ISA ready to use as and when)
Silver (some physical + SSLN) = 18%
Gold Miners ETF (GJGB) = 15% (Disaster so far.  Only bought it recently and it's gone down 18%)
Crypto = 9% (An even bigger disaster.  Lost 2/3 of its value since October 2021.  Absolutely horrendous).

My hope would be a melt-up where my Gold Miners ETF and crypto get a boost before I reduce my exposure to them.  I went way OTT with the crypto exposure (it was 20%).

Timing the market during the bear market make perfect sense. That is what many of the hedge fund managers are doing.

Also doing DCA will generally beat Lump-sum during the bear market.

In the past, when a person was saying this in this MSE they always got heavily attacked.

I am expecting the equities market to collapse.  When it does, I also expect gold/silver to go down with it.  But I expect gold/silver to come out of it better once money starts flowing there.

Having a cash allocation means that:

1)  Some of my portfolio is safeguarded when everything goes down.
2)  I have cash to take advantage of cheap gold/silver stocks (SGLN & SSLN) in anticipation of gold/silver rising sharply before equities do.
3)  If I so choose, I can buy equities at a 50%-80% discount.  My plan is to stick with gold/silver ETCs (SGLN & SSLN), but I may be tempted to buy a small bag of equities (probably VWRP) at a 50%-80% discount.



You obviously don't share my views about the financial Armageddon we are facing.  But let me ask you this theoretical question:  if you thought the market was about to tank by 80%, how would you be positioning your portfolio?

I agree with you. Things are looking very bleak and I don't understand everyone's optimism.

 I have money to invest in a bit of gold to protect 'cash' but gold too high.  Waiting for it to come down. As said before, I will be paying off my mortgage as soon as possible.  Keeping my current shareholdings although expecting them to drop significantly in the short/medium term. I have a bit of crypto which is going down (bought nowhere near the top) but will buy some more if we have a significant price reduction (like bitcoin down into 4 digits again and Eth into 3).  I have a private pension and will keep contributions high whilst prices go low. I am 30 years away from retirement so a crash now could help my much longer term pension health. Other than that a good stash of cash savings and drastically cutting spending, growing own food, reducing car journeys, stocking up on stove fuel (did this last year whilst still cheapish), having a very fully stocked pantry.

masonic

Type_45 said:

masonic said:

Type_45 said:

What is the reason though to have your cash in a savings account, as opposed to leaving it in cash in your S&S ISA?  (It seems to me the interest you'd earn is minimal, and you'd not want to take money out of the ISA unless you can help it.)

Adindas has hit the nail on the head. These are potentially large sums of cash, so worth getting some return on it, especially as it could take years for things to play out.

I would not withdraw from an ISA, unless I first transferred the money to a flexible cash ISA and could withdraw and replace it to keep its status. Personally, I still have a queue of unwrapped assets that I haven't been able to get into an ISA within the annual allowance, so probably wouldn't need to withdraw. Having readily accessible emergency cash seems like a good option if you really believe there's going to be such a significant financial collapse. There could be all sorts of difficulties and delays at play.

What about keeping cash at home under those circumstances?

Having some emergency cash in hand may be a sensible precaution to take at any time. As is having multiple bank accounts and cards of different types. You've already mentioned having a well stocked food supply and stash of essentials. Looking back at issues that have happened with certain banks, Visa, etc, it is best to have the capability to cover basic spending needs with cash for at least a short period of time.

adindas

Sell May and Go away, buy back in October ? (Please note noone is suggesting you do this !!!!)

It is the historical pattern in the wall street

https://www.investopedia.com/terms/s/sell-in-may-and-go-away.asp

https://www.financial-spread-betting.com/Sell-may-buy-november.html

If a lot of people Hedge-fund are still doing this during this current bear market it will put more further pressure on the stock market. Summer is a typical holiday season where many HFs, Traders are not doing trade as many as they do during the other seasons. But it might be that the stock market is close to "capitulation" in this bear market so there is not much more to sell.

This is what current survey of AAII  is showing. These are the people who will normally put their money in the stock market

https://www.aaii.com/sentimentsurvey

Fear and Greed Index

The VIX measure of Volatility

InvesterJones

adindas said:

Sell May and Go away, buy back in November ? (Please note noone is suggesting you do this !!!!)

It is the historical pattern in the wall street

https://www.investopedia.com/terms/s/sell-in-may-and-go-away.asp

https://www.financial-spread-betting.com/Sell-may-buy-november.html

If a lot of people Hedge-fund are still doing this during this current bear market it will put more further pressure on the stock market. Summer is a typical holiday season where many HFs, Traders are not doing trade as many as they do during the other seasons.

This is what current survey of AAII  is showing. These are the people who will normally put their money in the stock market

https://www.aaii.com/sentimentsurvey

Doesn't that chart show that actually that's not the historical pattern? Seems historical average sentiment at this time of year is more bullish than bearish. (Or is the historical average an all-year term, not average for this time of year?)

adindas

InvesterJones said:

adindas said:

Sell May and Go away, buy back in November ? (Please note noone is suggesting you do this !!!!)

It is the historical pattern in the wall street

https://www.investopedia.com/terms/s/sell-in-may-and-go-away.asp

https://www.financial-spread-betting.com/Sell-may-buy-november.html

If a lot of people Hedge-fund are still doing this during this current bear market it will put more further pressure on the stock market. Summer is a typical holiday season where many HFs, Traders are not doing trade as many as they do during the other seasons.

This is what current survey of AAII  is showing. These are the people who will normally put their money in the stock market

https://www.aaii.com/sentimentsurvey

Doesn't that chart show that actually that's not the historical pattern? Seems historical average sentiment at this time of year is more bullish than bearish. (Or is the historical average an all-year term, not average for this time of year?)

I refer the historical pattern for "Sell May and Go" buy back October.

The chart"one year bearish is "One year bearish high" taking into consideration when the downtrend started in November 2021. 59.4% happened in week Ending April 27, 2022.

This "sentiment survey" conducted May 25 for the next six months might not have taken into consideration the historical pattern "Sell May and Go, buy back October". Keep in mind the survey is conducted to Individual Investors (e.g retail investors). Not all retail Investors know about the historical pattern for "Sell May and Go, buy back October".

Type_45

themoomins said:

Type_45 said:

adindas said:

Type_45 said:

masonic said:

Type_45 said:

My commodities position has made almost 14% since I bought it two months ago.

I am looking to sell it this week when an attractive price becomes available and I will keep the proceeds in cash. 

This will mean that I am approximately 27% in cash.

I think you've done well to catch the end of that trend. I was sceptical it had much further to run. So seems a sensible move to lock in those gains. With a slice of your metal holdings you'll have something resembling a bonds proxy when combined with this cash, but without the interest rate sensitivity.

Yes, it should then be quite a defensive position after I sell the commodities shortly.

Gold (some physical + SGLN) = 30%
Cash = 27% (most of which I will leave in my S&S ISA ready to use as and when)
Silver (some physical + SSLN) = 18%
Gold Miners ETF (GJGB) = 15% (Disaster so far.  Only bought it recently and it's gone down 18%)
Crypto = 9% (An even bigger disaster.  Lost 2/3 of its value since October 2021.  Absolutely horrendous).

My hope would be a melt-up where my Gold Miners ETF and crypto get a boost before I reduce my exposure to them.  I went way OTT with the crypto exposure (it was 20%).

Timing the market during the bear market make perfect sense. That is what many of the hedge fund managers are doing.

Also doing DCA will generally beat Lump-sum during the bear market.

In the past, when a person was saying this in this MSE they always got heavily attacked.

I am expecting the equities market to collapse.  When it does, I also expect gold/silver to go down with it.  But I expect gold/silver to come out of it better once money starts flowing there.

Having a cash allocation means that:

1)  Some of my portfolio is safeguarded when everything goes down.
2)  I have cash to take advantage of cheap gold/silver stocks (SGLN & SSLN) in anticipation of gold/silver rising sharply before equities do.
3)  If I so choose, I can buy equities at a 50%-80% discount.  My plan is to stick with gold/silver ETCs (SGLN & SSLN), but I may be tempted to buy a small bag of equities (probably VWRP) at a 50%-80% discount.



You obviously don't share my views about the financial Armageddon we are facing.  But let me ask you this theoretical question:  if you thought the market was about to tank by 80%, how would you be positioning your portfolio?

I agree with you. Things are looking very bleak and I don't understand everyone's optimism.

 I have money to invest in a bit of gold to protect 'cash' but gold too high.  Waiting for it to come down. As said before, I will be paying off my mortgage as soon as possible.  Keeping my current shareholdings although expecting them to drop significantly in the short/medium term. I have a bit of crypto which is going down (bought nowhere near the top) but will buy some more if we have a significant price reduction (like bitcoin down into 4 digits again and Eth into 3).  I have a private pension and will keep contributions high whilst prices go low. I am 30 years away from retirement so a crash now could help my much longer term pension health. Other than that a good stash of cash savings and drastically cutting spending, growing own food, reducing car journeys, stocking up on stove fuel (did this last year whilst still cheapish), having a very fully stocked pantry.

Fantastic post.  

masonic

I must admit, I find it amazing how such concepts as 'sell in May' and 'Santa rally' get given any credence by serious investors. I have very little respect for hedge fund managers. I think their record in aggregate speaks for itself. However, I'll comment in the spirit of this thread when saying anyone who thinks things are going to miraculously turn around on some arbitrary date in mid-July or even November are deluding themselves. Markets are somewhat efficient, so following any periodic trend will constitute allowing other market participants to take advantage of you. Anyway, the case for such trends is so weak it is laughable. The average hedge fund manager is no more than an amateur magician. By sleight of hand they may convince some that they have the mystical abilities to make them some money that exceeds their exorbitant fees, but as those who invest without them grow in number, and as financial instruments are increasingly incorporating alternative assets that were previously inaccessible, it is getting harder and harder for them to pull the wool over people's eyes.

Again, in the spirt of this thread, it would be disingenuous to claim that further declines in stocks over the coming few months were nothing to do with the current economic circumstances and everything to do with folklore.

coastline

Hints that inflation could be peaking ?

U.S. inflation rate slows to 6.3%, Fed-favored PCE gauge shows, in a sign that price pressures could be peaking - MarketWatch

FTw9sx3WUAI8GRH (643×396) (twimg.com)

Buying bonds now down to 2.7%

United States Government Bond 10Y - 2022 Data - 1912-2021 Historical - 2023 Forecast (tradingeconomics.com)

Vanguard Global Aggregate Bond UCITS ETF GBP Hedged Accumulation summary price and performance data – Investors Chronicle

You could argue buying bonds for safety but the SP500 is up 8% since Friday. Long candle wicks can be a good sign of a reversal.

$SPX | SharpCharts | StockCharts.com

Weekly view the indicators have hit the bottom. Maybe reverse. ? Who knows but in general a good time to buy in the weekly timeframe. Look at the Stochastic and RSI.

$SPX | SharpCharts | StockCharts.com

Monthly they don't always play out . 2003 and 2009 but you never know ? Look at that huge candle wick this month.

Public ChartLists | StockCharts.com

Greed and Fear mentioned earlier well it's washed out now ?

FTi9xQjWQAATEtx (668×406) (twimg.com)

masonic

coastline said:

Hints that inflation could be peaking ?

Looking globally, I think there is a lot to be positive about. As someone who took an unusual overweight to the UK a year or two ago, I am less sanguine. Betting against the UK is not something I like to do, so it felt good to break the habit, but I do worry that global inflation will fall away to expose UK inflation, nibbling at the wealth of all.

Type_45

masonic said:

coastline said:

Hints that inflation could be peaking ?

Looking globally, I think there is a lot to be positive about. As someone who took an unusual overweight to the UK a year or two ago, I am less sanguine. Betting against the UK is not something I like to do, so it felt good to break the habit, but I do worry that global inflation will fall away to expose UK inflation, nibbling at the wealth of all.

Please could you let us know what to be positive about globally?