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

zagfles

Thrugelmir said:

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. 

This thread, discussing "totally foreseeable" falls

zagfles

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 depends on strategy, I've not decided mine yet. But even if you maintain a static asset allocation in retirement, drawing from cash after a fall would come about naturally to rebalance, since a fall in equities would obviously mean your cash is now a greater % of the total. Strategies like prime harvesting say to always draw from cash/bonds, potentailly ending up 100% equities in some circumstances!

But whichever, it should be done in a structured, controlled way rather than gut feel and panic over falls.

MK62

One issue here is that many investors see an asset peak and then assume that's it's real worth and measure future valuations against it.....human nature I suppose, but it's a habit worth training yourself out of......
Another is assuming money has actually been lost when a valuation goes south.....but it's not really - money is only lost if you sell for less than you bought at (inflation adjusted).....a bit like finding out your house is worth 20k less than year ago doesn't actually mean you've lost 20k.

ProDave

This last 3 months has been a learning curve.  What I have learned is IGNORE THE ADVICE HERE.

Just when Omicron was rearing it's head, I got a feeling things were not looking good, as per previous lockdowns, the economy slows and economic activity falls and sentiment weakens.  I suggested the markets might fall and then might have been a good time to sell some things.

The forum talked me out of it saying that much regurgitated "time in the market not time the market"

Oh how I WISH I had ignored them and sold.

If i had followed my instinct I would be looking to buy back some but possibly not until the Ukraine issue is resolved.

Next time I will follow my instinct but keep it to myself because you just can't educate some people.

coyrls

The known risk with SWR strategies is that they will fail in historically unprecedented circumstances but what we are seeing now is far, far from historically unprecedented.

Thrugelmir

coyrls said:

The known risk with SWR strategies is that they will fail in historically unprecedented circumstances but what we are seeing now is far, far from historically unprecedented.

Which period of history are you comparing it too? 

Thrugelmir

ProDave said:

This last 3 months has been a learning curve.  What I have learned is IGNORE THE ADVICE HERE.

Just when Omicron was rearing it's head, I got a feeling things were not looking good, as per previous lockdowns, the economy slows and economic activity falls and sentiment weakens.  I suggested the markets might fall and then might have been a good time to sell some things.

The forum talked me out of it saying that much regurgitated "time in the market not time the market"

Oh how I WISH I had ignored them and sold.

If i had followed my instinct I would be looking to buy back some but possibly not until the Ukraine issue is resolved.

Next time I will follow my instinct but keep it to myself because you just can't educate some people.

No one is regulated on here to give advice. This forum is no more different than having a chat in the pub with total strangers. With everybody exchanging personal views and opinions. There's plenty of sources of quality information if one wishes to delve deeper into anything written in order to make an informed judgment for oneself. 

eskbanker

ProDave said:

This last 3 months has been a learning curve.  What I have learned is IGNORE THE ADVICE HERE.

Just when Omicron was rearing it's head, I got a feeling things were not looking good, as per previous lockdowns, the economy slows and economic activity falls and sentiment weakens.  I suggested the markets might fall and then might have been a good time to sell some things.

The forum talked me out of it saying that much regurgitated "time in the market not time the market"

Oh how I WISH I had ignored them and sold.

If i had followed my instinct I would be looking to buy back some but possibly not until the Ukraine issue is resolved.

Next time I will follow my instinct but keep it to myself because you just can't educate some people.

Do you have a link for the thread(s) in which you were talked out of selling investments?  The fact that prices have dropped a bit doesn't in itself mean that it would have been right to sell two or three months ago, unless there was a compelling reason to liquidate assets, as trying to time the market isn't generally advisable - the fact that in this particular case it may have been possible to benefit by a few percentage points doesn't actually invalidate the usual rule of thumb (or mean that those advocating it are uneducated), especially if wanting to try to time re-entry too.  What does your instinct say is the right time to buy back, in more specific terms than "possibly not until the Ukraine issue is resolved"?

Audaxer

zagfles said:

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?

But whichever, it should be done in a structured, controlled way rather than gut feel and panic over falls.

I agree, as I certainly don't panic over falls in the market.

ProDave

eskbanker said:

ProDave said:

This last 3 months has been a learning curve.  What I have learned is IGNORE THE ADVICE HERE.

Just when Omicron was rearing it's head, I got a feeling things were not looking good, as per previous lockdowns, the economy slows and economic activity falls and sentiment weakens.  I suggested the markets might fall and then might have been a good time to sell some things.

The forum talked me out of it saying that much regurgitated "time in the market not time the market"

Oh how I WISH I had ignored them and sold.

If i had followed my instinct I would be looking to buy back some but possibly not until the Ukraine issue is resolved.

Next time I will follow my instinct but keep it to myself because you just can't educate some people.

Do you have a link for the thread(s) in which you were talked out of selling investments?  The fact that prices have dropped a bit doesn't in itself mean that it would have been right to sell two or three months ago, unless there was a compelling reason to liquidate assets, as trying to time the market isn't generally advisable - the fact that in this particular case it may have been possible to benefit by a few percentage points doesn't actually invalidate the usual rule of thumb (or mean that those advocating it are uneducated), especially if wanting to try to time re-entry too.  What does your instinct say is the right time to buy back, in more specific terms than "possibly not until the Ukraine issue is resolved"?

I can't find my old thread.

I look at charts of my chosen (or prospective) investments.

I was lucky to be in cash when Covid hit in early 2020 so did not lose out in the crash.  Once things started to turn upwards I re invested and enjoyed a good run. but the 2 funds I was invested in were starting to run out of steam and just marking time, up a little, down a little with no clear upward trend.  That and Omicron made me think it was time to go back to cash for a short while.  Oh how I wish I had.

And buying back, once I see a watched investment turn from downwards to what looks like a solid upward trend.

What is mystifying is the types of funds discussed in this thread probably down 10% in the last month or so is against a backdrop of the FTSE100 looking generally positive apart from a few blips.  I know we are not talking about FTSE trackers, but it does seem very odd that a number of high profile and previously well respected funds are falling sharply while the FTSE100 is generally up over the same period.

What we all agree on is these are not normal times, too many unusual things happening which is another reason I am not a fan of "wait and hope"

I appreciate you are not supposed to give advice, so i don't expect "buy XYZ I think they are going to rocket" but we never get any proper discussion about markets, sentiment, when might be a general upturn, when might be a general downturn, that fund seems to have topped out time to try a different one etc.  Just the "time in the market" mantra that makes it a pretty useless place if you want to discuss where might be a good place to invest for the next cycle.

This thread seems to show I am not the only one wanting better advice and hoping for a community that can share thoughts genuinely.