Vanguard FTSE Global/Dev World ex-uk, LS80/100, all down - is it Ukraine?

masonic

Audaxer said:

masonic said:

Thrugelmir said:

zagfles said:

Are people seriously panicing about a small downturn over 3 months? VLS100 is up 12% since a year ago. Most global trackers are similar.

People are sensibly monitoring events. Retail investors are often 6 months behind the major trade movements in the markets. Somebody who bought VLS100 in November 2021 could now be down 5%.  Only two prices actually matter, the one you buy at and the one you sell at. Other performance figures mean diddly squat. 

Good to clarify this, as we see a common fixation about the price bought at and the current price. People tend to sweat the current price far too much when they have no need to sell for a very long time.

That's true, but some retirees taking income from a portfolio on a Total Return basis, may sell 4% once a year for income, or drawdown income more regularly. In these cases they will be concerned about current values and have a decision to make as whether they delay selling until their portfolio recovers. Ideally that is why I like at least some of my portfolio in dividend funds and have a cash buffer for times like this.

Agreed, would be very unwise to hold such a fund and rely on drawing down capital to meet an income requirement without alternative sources to fall back on.

Chris_English

Billycock said:

zagfles said:

Billycock said:

zagfles said:

Billycock said:

zagfles said:

Thrugelmir said:

zagfles said:

Are people seriously panicing about a small downturn over 3 months? VLS100 is up 12% since a year ago. Most global trackers are similar.

People are sensibly monitoring events. Retail investors are often 6 months behind the major trade movements in the markets. Somebody who bought VLS100 in November 2021 could now be down 5%.  Only two prices actually matter, the one you buy at and the one you sell at. Other performance figures mean diddly squat. 

Well exactly. Nobody with any sense is going to buy in Nov 21 and sell in Jan 22. So being 5% down over 2 months means "diddly squat"

A crackpot view in my book.
example -
Investor A invested £100, after 2 months he lost 5%, now has £95, 2 months later he gained 5% he now has £99.75

Investor B invested £100, after 2 months the market remained the same he still has £100, 2 months later he gained 5% he now has £105.

Isn't diddly squat after all.

And? The point was movement over 2 months mean "diddly squat" because nobody with any sense invests for 2 months. Or even 4 months. Investor C who bought a year ago doesn't give a monkeys what the price was in Nov, he's 12% up.

Oh right I get your drift.
No need to be bloody cheeky though is there? You wouldn't do it face to face so there's no need to do it online either.
Keyboard warrior online, a damp squib in reality!

Says the person who called me a "crackpot"

Oh Is that all I mentioned? I must have mistakenly omitted "bumbling old bore".

User name checks out.

Audaxer

zagfles said:

Audaxer said:

masonic said:

Thrugelmir said:

zagfles said:

Are people seriously panicing about a small downturn over 3 months? VLS100 is up 12% since a year ago. Most global trackers are similar.

People are sensibly monitoring events. Retail investors are often 6 months behind the major trade movements in the markets. Somebody who bought VLS100 in November 2021 could now be down 5%.  Only two prices actually matter, the one you buy at and the one you sell at. Other performance figures mean diddly squat. 

Good to clarify this, as we see a common fixation about the price bought at and the current price. People tend to sweat the current price far too much when they have no need to sell for a very long time.

That's true, but some retirees taking income from a portfolio on a Total Return basis, may sell 4% once a year for income, or drawdown income more regularly. In these cases they will be concerned about current values and have a decision to make as whether they delay selling until their portfolio recovers. Ideally that is why I like at least some of my portfolio in dividend funds and have a cash buffer for times like this.

Rather than try to time the market a better way might be to sell monthly rather than annually.

In any case someone who sells annually might be quite pleased they're about 12% up since last year.

I'm not sure what most people do, but I would think if you need to sell capital for income, it is probably best to do it annually but have enough of a cash buffer to ensure you wouldn't need to sell when markets are falling.  Once markets recover you could sell at that time to top up the cash buffer.

NannaH

I invested £10k in two relatively cautious funds in my isa in November,  they are currently down 8% as a whole.
Royal London sustainable diversified and sustainable managed growth -  so bonds aren’t acting as a cushion as far as I can see.  

I have a few thousand in Artemis global income,  pure equities and down less than 1% over the same time,  because of value stocks I assume. 
   I NEVER normally do lump sums 🙄 and I prevaricated over drip feeding and now obviously wish I had but hindsight is a wonderful thing. 

Thrugelmir

NannaH said:

I invested £10k in two relatively cautious funds in my isa in November,  they are currently down 8% as a whole.
Royal London sustainable diversified and sustainable managed growth -  so bonds aren’t acting as a cushion as far as I can see.  

I have a few thousand in Artemis global income,  pure equities and down less than 1% over the same time,  because of value stocks I assume. 
   I NEVER normally do lump sums 🙄 and I prevaricated over drip feeding and now obviously wish I had but hindsight is a wonderful thing. 

Some of the gloss has come off "sustainable" stocks. ESG labels by themselves don't warrant high premium ratings. After a decade of nominal interest rates and Central Bank intervention. Rising interest rates which are now odds on. Can only hit bonds one way. The correction was always going to come. Just the timing of when it would happen. 

zagfles

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Are people seriously panicing about a small downturn over 3 months? VLS100 is up 12% since a year ago. Most global trackers are similar.

People are sensibly monitoring events. Retail investors are often 6 months behind the major trade movements in the markets. Somebody who bought VLS100 in November 2021 could now be down 5%.  Only two prices actually matter, the one you buy at and the one you sell at. Other performance figures mean diddly squat. 

Well exactly. Nobody with any sense is going to buy in Nov 21 and sell in Jan 22. So being 5% down over 2 months means "diddly squat"

Didn't say anything about selling now. My reference is to the arbitary choice of time periods. The permuatations are considerable with over 200 trading days available in every year.  Those who bought at the peak of the markets in 2007 waited 6 years to recoup their capital losses. Real profit is cash in the hand, not a number on a computer screen that could change before you've had time to blink. 

You mean as opposed to carefully selected choices of time period to make a point? Like the last 2 months, or 6 years since 2007?

Opinions drive markets. Ours appear to diverge when it comes to the next phase of the post Covid recovery etc. Only time will tell which of us made the right calls to navigate the choppy water that lie ahead. Delving into the past does help one understand why , when looking forward. 

Eh? I've given no opinion whatsoever on future market direction. I'm just pointing out the market, or at least VLS100 and other global trackers, are 12% up over the year, so I fail to understand the apparent panic over a 5% drop since Nov.

zagfles

Audaxer said:

zagfles said:

Audaxer said:

masonic said:

Thrugelmir said:

zagfles said:

Are people seriously panicing about a small downturn over 3 months? VLS100 is up 12% since a year ago. Most global trackers are similar.

People are sensibly monitoring events. Retail investors are often 6 months behind the major trade movements in the markets. Somebody who bought VLS100 in November 2021 could now be down 5%.  Only two prices actually matter, the one you buy at and the one you sell at. Other performance figures mean diddly squat. 

Good to clarify this, as we see a common fixation about the price bought at and the current price. People tend to sweat the current price far too much when they have no need to sell for a very long time.

That's true, but some retirees taking income from a portfolio on a Total Return basis, may sell 4% once a year for income, or drawdown income more regularly. In these cases they will be concerned about current values and have a decision to make as whether they delay selling until their portfolio recovers. Ideally that is why I like at least some of my portfolio in dividend funds and have a cash buffer for times like this.

Rather than try to time the market a better way might be to sell monthly rather than annually.

In any case someone who sells annually might be quite pleased they're about 12% up since last year.

I'm not sure what most people do, but I would think if you need to sell capital for income, it is probably best to do it annually but have enough of a cash buffer to ensure you wouldn't need to sell when markets are falling.  Once markets recover you could sell at that time to top up the cash buffer.

I can't see the reasoning behind selling annually if you're drawing a monthly income. Any more than during the accumulation phase saving up and buying annually. Having a cash buffer/cash savings can be done with both.

Although I think techniques like dynamic asset allocation eg "prime harvesting" are worth looking at, which is essentially market timing but in a structured long term way (rather than "oh dear the market has gone down a bit, I'll hold off selling for a bit")

Audaxer

zagfles said:

Audaxer said:

zagfles said:

Audaxer said:

masonic said:

Thrugelmir said:

zagfles said:

Are people seriously panicing about a small downturn over 3 months? VLS100 is up 12% since a year ago. Most global trackers are similar.

People are sensibly monitoring events. Retail investors are often 6 months behind the major trade movements in the markets. Somebody who bought VLS100 in November 2021 could now be down 5%.  Only two prices actually matter, the one you buy at and the one you sell at. Other performance figures mean diddly squat. 

Good to clarify this, as we see a common fixation about the price bought at and the current price. People tend to sweat the current price far too much when they have no need to sell for a very long time.

That's true, but some retirees taking income from a portfolio on a Total Return basis, may sell 4% once a year for income, or drawdown income more regularly. In these cases they will be concerned about current values and have a decision to make as whether they delay selling until their portfolio recovers. Ideally that is why I like at least some of my portfolio in dividend funds and have a cash buffer for times like this.

Rather than try to time the market a better way might be to sell monthly rather than annually.

In any case someone who sells annually might be quite pleased they're about 12% up since last year.

I'm not sure what most people do, but I would think if you need to sell capital for income, it is probably best to do it annually but have enough of a cash buffer to ensure you wouldn't need to sell when markets are falling.  Once markets recover you could sell at that time to top up the cash buffer.

I can't see the reasoning behind selling annually if you're drawing a monthly income. Any more than during the accumulation phase saving up and buying annually. Having a cash buffer/cash savings can be done with both.

Like I said, I wasn't sure what most people in that situation do, but from what I've read, some people do sell capital annually to top up their cash buffer, so they can pay themselves monthly from the cash pot. I'm fairly sure some IFAs do it that way for their clients.

As you say, it could be done by selling capital monthly, but presumably you would draw the income from the cash buffer at a time like this when markets are falling?

Thrugelmir

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Are people seriously panicing about a small downturn over 3 months? VLS100 is up 12% since a year ago. Most global trackers are similar.

People are sensibly monitoring events. Retail investors are often 6 months behind the major trade movements in the markets. Somebody who bought VLS100 in November 2021 could now be down 5%.  Only two prices actually matter, the one you buy at and the one you sell at. Other performance figures mean diddly squat. 

Well exactly. Nobody with any sense is going to buy in Nov 21 and sell in Jan 22. So being 5% down over 2 months means "diddly squat"

Didn't say anything about selling now. My reference is to the arbitary choice of time periods. The permuatations are considerable with over 200 trading days available in every year.  Those who bought at the peak of the markets in 2007 waited 6 years to recoup their capital losses. Real profit is cash in the hand, not a number on a computer screen that could change before you've had time to blink. 

You mean as opposed to carefully selected choices of time period to make a point? Like the last 2 months, or 6 years since 2007?

Opinions drive markets. Ours appear to diverge when it comes to the next phase of the post Covid recovery etc. Only time will tell which of us made the right calls to navigate the choppy water that lie ahead. Delving into the past does help one understand why , when looking forward. 

Eh? I've given no opinion whatsoever on future market direction. I'm just pointing out the market, or at least VLS100 and other global trackers, are 12% up over the year, so I fail to understand the apparent panic over a 5% drop since Nov.

What panic? The correction was totally foreseeable. Was always a matter of time. 

masonic

Audaxer said:

zagfles said:

Audaxer said:

zagfles said:

Audaxer said:

masonic said:

Thrugelmir said:

zagfles said:

Are people seriously panicing about a small downturn over 3 months? VLS100 is up 12% since a year ago. Most global trackers are similar.

People are sensibly monitoring events. Retail investors are often 6 months behind the major trade movements in the markets. Somebody who bought VLS100 in November 2021 could now be down 5%.  Only two prices actually matter, the one you buy at and the one you sell at. Other performance figures mean diddly squat. 

Good to clarify this, as we see a common fixation about the price bought at and the current price. People tend to sweat the current price far too much when they have no need to sell for a very long time.

That's true, but some retirees taking income from a portfolio on a Total Return basis, may sell 4% once a year for income, or drawdown income more regularly. In these cases they will be concerned about current values and have a decision to make as whether they delay selling until their portfolio recovers. Ideally that is why I like at least some of my portfolio in dividend funds and have a cash buffer for times like this.

Rather than try to time the market a better way might be to sell monthly rather than annually.

In any case someone who sells annually might be quite pleased they're about 12% up since last year.

I'm not sure what most people do, but I would think if you need to sell capital for income, it is probably best to do it annually but have enough of a cash buffer to ensure you wouldn't need to sell when markets are falling.  Once markets recover you could sell at that time to top up the cash buffer.

I can't see the reasoning behind selling annually if you're drawing a monthly income. Any more than during the accumulation phase saving up and buying annually. Having a cash buffer/cash savings can be done with both.

Like I said, I wasn't sure what most people in that situation do, but from what I've read, some people do sell capital annually to top up their cash buffer, so they can pay themselves monthly from the cash pot. I'm fairly sure some IFAs do it that way for their clients.

As you say, it could be done by selling capital monthly, but presumably you would draw the income from the cash buffer at a time like this when markets are falling?

It's what I would do, as a deliberate action, after a sufficiently large fall. For anything less, a suitably diversified portfolio containing defensive assets will direct you to do so because said defensive assets will be above their target allocation when the riskier assets have fallen.