Economy crash =/= stock market crash?

lozzy1965

Zola. said:

Its a good opportunity to shop smarter and healthier. 

Often the cheapest food is the least healthy unfortunately   I might become a hippie and live off lentils for a year or two! 

anonmoose

I agree lozzy. We eat a very healthy diet overall but the healthier ingredients are often the most expensive.  Extra virgin olive oil, oily fish, nuts, avocado etc are all expensive.   But saying that for those who buy takeaways and ready meals then its very easy to make cheaper healthier alternatives.

Zola.

Agreed @lozzy1965

However healthy stuff can be cheap too. Fresh greens are typically cheap and they are the best things for you. 

The thing that I have noticed going up the most in my weekly shop is good quality meat and dairy products. 

GazzaBloom

Swipe said:

Zola. said:

Did your portfolio get rebalanced in good time to suit your retiree status?

I'm 40% cash so well placed for any big downturn.

40% cash in a portfolio is a surefire way to lose money to inflation and will drag future returns down. If a portfolio is satisfactory positioned for the long term and a safe withdrawal rate set for the long term, you don't need cash, despite the current emotional driven sense that we should have cash on hand (which is a lure we all feel)

Swipe

GazzaBloom said:

Swipe said:

Zola. said:

Did your portfolio get rebalanced in good time to suit your retiree status?

I'm 40% cash so well placed for any big downturn.

40% cash in a portfolio is a surefire way to lose money to inflation and will drag future returns down. If a portfolio is satisfactory positioned for the long term and a safe withdrawal rate set for the long term, you don't need cash.

Tell that to the £120K I'm down already. I have more than enough for retirement it if goes back up.  And more than enough if it keeps going down another 30%. I see no point in gambling money on a recovery by putting it all in now as a lump sum.

masonic

I think 40% cash could be justified in the scenario where bonds were clearly going to tumble when interest rates began to be hiked. A 60:40 portfolio might as well have been 100% equities for where we find ourselves today. Several of us had discussions towards the end of last year about the returns-free risk offered by bonds, little did we know how well timed those conversations happened to be.

Type_45

masonic said:

I think 40% cash could be justified in the scenario where bonds were clearly going to tumble when interest rates began to be hiked. A 60:40 portfolio might as well have been 100% equities for where we find ourselves today. Several of us had discussions towards the end of last year about the returns-free risk offered by bonds, little did we know how well timed those conversations happened to be.

VLS100 has outperformed VLS60 this year in a declining equities market.

GazzaBloom

masonic said:

I think 40% cash could be justified in the scenario where bonds were clearly going to tumble when interest rates began to be hiked. A 60:40 portfolio might as well have been 100% equities for where we find ourselves today. Several of us had discussions towards the end of last year about the returns-free risk offered by bonds, little did we know how well timed those conversations happened to be.

Yeah you're right, as a replacement for bonds then a cash percentage makes sense as a volatility reducer, but, it will lose value and effectiveness over the the long term, say 20 years.

A large cash "buffer" doesn't make sense if held in addition to a say 60/40 stocks bonds portfolio.

masonic

GazzaBloom said:

masonic said:

I think 40% cash could be justified in the scenario where bonds were clearly going to tumble when interest rates began to be hiked. A 60:40 portfolio might as well have been 100% equities for where we find ourselves today. Several of us had discussions towards the end of last year about the returns-free risk offered by bonds, little did we know how well timed those conversations happened to be.

Yeah you're right, as a replacement for bonds then a cash percentage makes sense as a volatility reducer, but, it will lose value and effectiveness over the the long term, say 20 years.

A large cash "buffer" doesn't make sense if held in addition to a say 60/40 stocks bonds portfolio.

Yes, completely agree. This would just be a short term dodge of an overvalued asset class that was going to undergo a predictable (in extent, if not in time) mean reversion.

Swipe

GazzaBloom said:

masonic said:

I think 40% cash could be justified in the scenario where bonds were clearly going to tumble when interest rates began to be hiked. A 60:40 portfolio might as well have been 100% equities for where we find ourselves today. Several of us had discussions towards the end of last year about the returns-free risk offered by bonds, little did we know how well timed those conversations happened to be.

Yeah you're right, as a replacement for bonds then a cash percentage makes sense as a volatility reducer, but, it will lose value and effectiveness over the the long term, say 20 years.

A large cash "buffer" doesn't make sense if held in addition to a say 60/40 stocks bonds portfolio.

I've no intention of keeping 40% cash for 20 years. It just makes sense to me for now in case the US enters a recession.