What is your trigger point to start spending from cash buffer?? + QE, Does it change the game?

kinger101

zagfles said:

I'm not sure what people here are invested in, or whether they're taking too much notice of a bit of froth, but VLS100 is up over 12% since a year ago, the S&P 500 is up 19%. Just look at most 5 year or even 3 or 1 year charts for most mainstream global trackers/indices and the drop since Nov looks trivial. Or is everyone in highly volatile funds like BG American etc?

Well, even if they were in BG American, the ca 33% drop has be to considered in relation to the ca. 120% gain in the previous year.  Either way, I don't really understand the short-termism either.  Even when you're in drawdown, baring very advanced age or a poor prognosis, pensions are still a long-term investment.  

kinger101

michaels said:

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Anonymous101 said:

michaels said:

I find this thread really interesting in that almost everyone:
a) thinks they can time the markets (change asset mix depending on current equity valuations) and
b) don't seem to understand the theory behind SWR

The latter does reveal a flaw in SWR - many of the lowest scenarios (the ones that determine the historical SWR) have seen situations where the pot shrinks to some low multiple of the annual withdrawal amount quite early in the historical period and then recovers, fine with hindsight but had you 'lived' that series of returns I can guarantee you that everyone would have reduced withdrawals when they saw their pot fall to such a low multiple so early and would thus have had some years where they actually drew less than what turned out to be safe.

I think I understand the theory behind SWR's but what you've hit on is THE flaw in SWR. They work in theory but no-one in their right mind would continue to sell assets and spend as they set out once you get to the extremes of the cases which turned out ok.

If you're portfolio drops 50,60,70% of course you're going to alter spending habits, the SWR theory swims against the tide of human nature there. That's why threads like this are so interesting because what starts as a 5-10% drop and market timing ends up being panic selling. As the falls get bigger eventually everyone develops the fear of running out of money.

Emotions asides, drawing a static "SWR" probably doesn't make financial sense either, using a dynamic withdrawal rate would likely deliver better results overall, see link I posted earlier. Obviously assuming you can cope with swings in income.

But whatever, you need a plan which you stick to and which is designed to cope with big market swings, far bigger than those of the last 3 months, if you go changing your plan because of fairly normal markets movements eg Nov to now, how are you going to cope with a 40% drop? 

Fairly normal movements. That's an interesting take.   Worst fall in the S&P in January ever........

Yes. Up 19% since a year ago. A bit of froth came off, that's all. So far anyway, I make no prediction on the future, just in case you incorrectly read between the lines again.

Not reading between the lines. Markets are driven by differing opinions. Usefull in weighing up the moves one should take with ones own portfolio. 

I don't try to time the market. Certainly not short term anyway. I'm not arrogant enough to think I know better than the collective market opinion, ie that which sets the current market prices. Anyone who thinks they do know better and hasn't got their own private island is deluded.

AS soon as you start saying something like 'the market is low so I will spend from cash rather than shares' you are timing the market in that you are expressing an opinion that in the future the shares portion of your portfolio will be worth more in comparison to the cash part. 

If share prices are a random walk then this is wrong. 

If they show some sort of 'reversion to mean' then there is a guaranteed winning strategy that an efficient market will arbitrage away by definition.

Isn't that assumption always there?  Otherwise, there's no point investing in equites.

The working assumption is on average stock markets will outperform other assets over the long term.  If this year's returns are -3 standard deviations from average, the probability of next year's returns being -3 SD from the average are the same as being +3 standard deviations from the average.  If it is truly random, a bad year this year doesn't make a bad year next year any less likely.  

michaels

kinger101 said:

michaels said:

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Anonymous101 said:

michaels said:

I find this thread really interesting in that almost everyone:
a) thinks they can time the markets (change asset mix depending on current equity valuations) and
b) don't seem to understand the theory behind SWR

The latter does reveal a flaw in SWR - many of the lowest scenarios (the ones that determine the historical SWR) have seen situations where the pot shrinks to some low multiple of the annual withdrawal amount quite early in the historical period and then recovers, fine with hindsight but had you 'lived' that series of returns I can guarantee you that everyone would have reduced withdrawals when they saw their pot fall to such a low multiple so early and would thus have had some years where they actually drew less than what turned out to be safe.

I think I understand the theory behind SWR's but what you've hit on is THE flaw in SWR. They work in theory but no-one in their right mind would continue to sell assets and spend as they set out once you get to the extremes of the cases which turned out ok.

If you're portfolio drops 50,60,70% of course you're going to alter spending habits, the SWR theory swims against the tide of human nature there. That's why threads like this are so interesting because what starts as a 5-10% drop and market timing ends up being panic selling. As the falls get bigger eventually everyone develops the fear of running out of money.

Emotions asides, drawing a static "SWR" probably doesn't make financial sense either, using a dynamic withdrawal rate would likely deliver better results overall, see link I posted earlier. Obviously assuming you can cope with swings in income.

But whatever, you need a plan which you stick to and which is designed to cope with big market swings, far bigger than those of the last 3 months, if you go changing your plan because of fairly normal markets movements eg Nov to now, how are you going to cope with a 40% drop? 

Fairly normal movements. That's an interesting take.   Worst fall in the S&P in January ever........

Yes. Up 19% since a year ago. A bit of froth came off, that's all. So far anyway, I make no prediction on the future, just in case you incorrectly read between the lines again.

Not reading between the lines. Markets are driven by differing opinions. Usefull in weighing up the moves one should take with ones own portfolio. 

I don't try to time the market. Certainly not short term anyway. I'm not arrogant enough to think I know better than the collective market opinion, ie that which sets the current market prices. Anyone who thinks they do know better and hasn't got their own private island is deluded.

AS soon as you start saying something like 'the market is low so I will spend from cash rather than shares' you are timing the market in that you are expressing an opinion that in the future the shares portion of your portfolio will be worth more in comparison to the cash part. 

If share prices are a random walk then this is wrong. 

If they show some sort of 'reversion to mean' then there is a guaranteed winning strategy that an efficient market will arbitrage away by definition.

Isn't that assumption always there?  Otherwise, there's no point investing in equites.

The working assumption is on average stock markets will outperform other assets over the long term.  If this year's returns are -3 standard deviations from average, the probability of next year's returns being -3 SD from the average are the same as being +3 standard deviations from the average.  If it is truly random, a bad year this year doesn't make a bad year next year any less likely.  

Exactly, at every moment we should look at the market as being at the correct level and ignore its history.  Suddenly there is therefore no concept that 'the markets are high, low, falling, down' as all of these imply comparison with previous levels which does not provide any extra information.  So if 80% equities is your target proportion when the FTSE is at 7k it shouldn't make any difference if it is at 5k or 10k to your choice of which assets to liquidate to provide income.

Audaxer

michaels said:

kinger101 said:

michaels said:

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Anonymous101 said:

michaels said:

I find this thread really interesting in that almost everyone:
a) thinks they can time the markets (change asset mix depending on current equity valuations) and
b) don't seem to understand the theory behind SWR

The latter does reveal a flaw in SWR - many of the lowest scenarios (the ones that determine the historical SWR) have seen situations where the pot shrinks to some low multiple of the annual withdrawal amount quite early in the historical period and then recovers, fine with hindsight but had you 'lived' that series of returns I can guarantee you that everyone would have reduced withdrawals when they saw their pot fall to such a low multiple so early and would thus have had some years where they actually drew less than what turned out to be safe.

I think I understand the theory behind SWR's but what you've hit on is THE flaw in SWR. They work in theory but no-one in their right mind would continue to sell assets and spend as they set out once you get to the extremes of the cases which turned out ok.

If you're portfolio drops 50,60,70% of course you're going to alter spending habits, the SWR theory swims against the tide of human nature there. That's why threads like this are so interesting because what starts as a 5-10% drop and market timing ends up being panic selling. As the falls get bigger eventually everyone develops the fear of running out of money.

Emotions asides, drawing a static "SWR" probably doesn't make financial sense either, using a dynamic withdrawal rate would likely deliver better results overall, see link I posted earlier. Obviously assuming you can cope with swings in income.

But whatever, you need a plan which you stick to and which is designed to cope with big market swings, far bigger than those of the last 3 months, if you go changing your plan because of fairly normal markets movements eg Nov to now, how are you going to cope with a 40% drop? 

Fairly normal movements. That's an interesting take.   Worst fall in the S&P in January ever........

Yes. Up 19% since a year ago. A bit of froth came off, that's all. So far anyway, I make no prediction on the future, just in case you incorrectly read between the lines again.

Not reading between the lines. Markets are driven by differing opinions. Usefull in weighing up the moves one should take with ones own portfolio. 

I don't try to time the market. Certainly not short term anyway. I'm not arrogant enough to think I know better than the collective market opinion, ie that which sets the current market prices. Anyone who thinks they do know better and hasn't got their own private island is deluded.

AS soon as you start saying something like 'the market is low so I will spend from cash rather than shares' you are timing the market in that you are expressing an opinion that in the future the shares portion of your portfolio will be worth more in comparison to the cash part. 

If share prices are a random walk then this is wrong. 

If they show some sort of 'reversion to mean' then there is a guaranteed winning strategy that an efficient market will arbitrage away by definition.

Isn't that assumption always there?  Otherwise, there's no point investing in equites.

The working assumption is on average stock markets will outperform other assets over the long term.  If this year's returns are -3 standard deviations from average, the probability of next year's returns being -3 SD from the average are the same as being +3 standard deviations from the average.  If it is truly random, a bad year this year doesn't make a bad year next year any less likely.  

So if 80% equities is your target proportion when the FTSE is at 7k it shouldn't make any difference if it is at 5k or 10k to your choice of which assets to liquidate to provide income.

If in that example your 80% equities were in the FTSE and the FTSE had dropped from 7k to 5k, your percentage of equities will have fallen a good bit below 80%, so it would make sense in my opinion to take income from either bonds or cash?

kinger101

michaels said:

kinger101 said:

michaels said:

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Anonymous101 said:

michaels said:

I find this thread really interesting in that almost everyone:
a) thinks they can time the markets (change asset mix depending on current equity valuations) and
b) don't seem to understand the theory behind SWR

The latter does reveal a flaw in SWR - many of the lowest scenarios (the ones that determine the historical SWR) have seen situations where the pot shrinks to some low multiple of the annual withdrawal amount quite early in the historical period and then recovers, fine with hindsight but had you 'lived' that series of returns I can guarantee you that everyone would have reduced withdrawals when they saw their pot fall to such a low multiple so early and would thus have had some years where they actually drew less than what turned out to be safe.

I think I understand the theory behind SWR's but what you've hit on is THE flaw in SWR. They work in theory but no-one in their right mind would continue to sell assets and spend as they set out once you get to the extremes of the cases which turned out ok.

If you're portfolio drops 50,60,70% of course you're going to alter spending habits, the SWR theory swims against the tide of human nature there. That's why threads like this are so interesting because what starts as a 5-10% drop and market timing ends up being panic selling. As the falls get bigger eventually everyone develops the fear of running out of money.

Emotions asides, drawing a static "SWR" probably doesn't make financial sense either, using a dynamic withdrawal rate would likely deliver better results overall, see link I posted earlier. Obviously assuming you can cope with swings in income.

But whatever, you need a plan which you stick to and which is designed to cope with big market swings, far bigger than those of the last 3 months, if you go changing your plan because of fairly normal markets movements eg Nov to now, how are you going to cope with a 40% drop? 

Fairly normal movements. That's an interesting take.   Worst fall in the S&P in January ever........

Yes. Up 19% since a year ago. A bit of froth came off, that's all. So far anyway, I make no prediction on the future, just in case you incorrectly read between the lines again.

Not reading between the lines. Markets are driven by differing opinions. Usefull in weighing up the moves one should take with ones own portfolio. 

I don't try to time the market. Certainly not short term anyway. I'm not arrogant enough to think I know better than the collective market opinion, ie that which sets the current market prices. Anyone who thinks they do know better and hasn't got their own private island is deluded.

AS soon as you start saying something like 'the market is low so I will spend from cash rather than shares' you are timing the market in that you are expressing an opinion that in the future the shares portion of your portfolio will be worth more in comparison to the cash part. 

If share prices are a random walk then this is wrong. 

If they show some sort of 'reversion to mean' then there is a guaranteed winning strategy that an efficient market will arbitrage away by definition.

Isn't that assumption always there?  Otherwise, there's no point investing in equites.

The working assumption is on average stock markets will outperform other assets over the long term.  If this year's returns are -3 standard deviations from average, the probability of next year's returns being -3 SD from the average are the same as being +3 standard deviations from the average.  If it is truly random, a bad year this year doesn't make a bad year next year any less likely.  

Exactly, at every moment we should look at the market as being at the correct level and ignore its history.  Suddenly there is therefore no concept that 'the markets are high, low, falling, down' as all of these imply comparison with previous levels which does not provide any extra information.  So if 80% equities is your target proportion when the FTSE is at 7k it shouldn't make any difference if it is at 5k or 10k to your choice of which assets to liquidate to provide income.

Well, technically if the stock market falls, you'd be using cash/bonds anyway, and potentially repurchasing equities to get the target allocation.  But I'm not sure in drawdown phase that I'd want a static allocation irrespective of pot size.  One should consider both capacity and appetite for risk, and I'd say the former is likely to be diminished after a heavy crash.   

But I'm not sure a fixed allocation works in drawdown anyway if you have DC, DB and SP all becoming available at different ages anyway.  X years cash buffer is much smaller if you have two fixed income streams at SRA compared to just DC pot at say 60.

Thrugelmir

michaels said:

kinger101 said:

michaels said:

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Anonymous101 said:

michaels said:

I find this thread really interesting in that almost everyone:
a) thinks they can time the markets (change asset mix depending on current equity valuations) and
b) don't seem to understand the theory behind SWR

The latter does reveal a flaw in SWR - many of the lowest scenarios (the ones that determine the historical SWR) have seen situations where the pot shrinks to some low multiple of the annual withdrawal amount quite early in the historical period and then recovers, fine with hindsight but had you 'lived' that series of returns I can guarantee you that everyone would have reduced withdrawals when they saw their pot fall to such a low multiple so early and would thus have had some years where they actually drew less than what turned out to be safe.

I think I understand the theory behind SWR's but what you've hit on is THE flaw in SWR. They work in theory but no-one in their right mind would continue to sell assets and spend as they set out once you get to the extremes of the cases which turned out ok.

If you're portfolio drops 50,60,70% of course you're going to alter spending habits, the SWR theory swims against the tide of human nature there. That's why threads like this are so interesting because what starts as a 5-10% drop and market timing ends up being panic selling. As the falls get bigger eventually everyone develops the fear of running out of money.

Emotions asides, drawing a static "SWR" probably doesn't make financial sense either, using a dynamic withdrawal rate would likely deliver better results overall, see link I posted earlier. Obviously assuming you can cope with swings in income.

But whatever, you need a plan which you stick to and which is designed to cope with big market swings, far bigger than those of the last 3 months, if you go changing your plan because of fairly normal markets movements eg Nov to now, how are you going to cope with a 40% drop? 

Fairly normal movements. That's an interesting take.   Worst fall in the S&P in January ever........

Yes. Up 19% since a year ago. A bit of froth came off, that's all. So far anyway, I make no prediction on the future, just in case you incorrectly read between the lines again.

Not reading between the lines. Markets are driven by differing opinions. Usefull in weighing up the moves one should take with ones own portfolio. 

I don't try to time the market. Certainly not short term anyway. I'm not arrogant enough to think I know better than the collective market opinion, ie that which sets the current market prices. Anyone who thinks they do know better and hasn't got their own private island is deluded.

AS soon as you start saying something like 'the market is low so I will spend from cash rather than shares' you are timing the market in that you are expressing an opinion that in the future the shares portion of your portfolio will be worth more in comparison to the cash part. 

If share prices are a random walk then this is wrong. 

If they show some sort of 'reversion to mean' then there is a guaranteed winning strategy that an efficient market will arbitrage away by definition.

Isn't that assumption always there?  Otherwise, there's no point investing in equites.

The working assumption is on average stock markets will outperform other assets over the long term.  If this year's returns are -3 standard deviations from average, the probability of next year's returns being -3 SD from the average are the same as being +3 standard deviations from the average.  If it is truly random, a bad year this year doesn't make a bad year next year any less likely.  

Exactly, at every moment we should look at the market as being at the correct level and ignore its history.  

Markets are constantly looking forward to tomorrow and beyond. Therefore are based on a huge amount of what if assumption. They are not priced as at today. If you look at the weather forecast and there's a 70% of heavy rain later in the day. Would you leave home without an umbrella? As that's what many investors with high risk portfolios seem to do.  

zagfles

kinger101 said:

zagfles said:

I'm not sure what people here are invested in, or whether they're taking too much notice of a bit of froth, but VLS100 is up over 12% since a year ago, the S&P 500 is up 19%. Just look at most 5 year or even 3 or 1 year charts for most mainstream global trackers/indices and the drop since Nov looks trivial. Or is everyone in highly volatile funds like BG American etc?

Well, even if they were in BG American, the ca 33% drop has be to considered in relation to the ca. 120% gain in the previous year.  Either way, I don't really understand the short-termism either.  Even when you're in drawdown, baring very advanced age or a poor prognosis, pensions are still a long-term investment.  

Indeed. Some markets like China and emerging markets are down over a year, but even they are well up over 3 and 5 years. If you worry about swings in the market over a few months rather than 3+ year performance you probably shouldn't be invested in equities. 

zagfles

kinger101 said:

michaels said:

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Anonymous101 said:

michaels said:

I find this thread really interesting in that almost everyone:
a) thinks they can time the markets (change asset mix depending on current equity valuations) and
b) don't seem to understand the theory behind SWR

The latter does reveal a flaw in SWR - many of the lowest scenarios (the ones that determine the historical SWR) have seen situations where the pot shrinks to some low multiple of the annual withdrawal amount quite early in the historical period and then recovers, fine with hindsight but had you 'lived' that series of returns I can guarantee you that everyone would have reduced withdrawals when they saw their pot fall to such a low multiple so early and would thus have had some years where they actually drew less than what turned out to be safe.

I think I understand the theory behind SWR's but what you've hit on is THE flaw in SWR. They work in theory but no-one in their right mind would continue to sell assets and spend as they set out once you get to the extremes of the cases which turned out ok.

If you're portfolio drops 50,60,70% of course you're going to alter spending habits, the SWR theory swims against the tide of human nature there. That's why threads like this are so interesting because what starts as a 5-10% drop and market timing ends up being panic selling. As the falls get bigger eventually everyone develops the fear of running out of money.

Emotions asides, drawing a static "SWR" probably doesn't make financial sense either, using a dynamic withdrawal rate would likely deliver better results overall, see link I posted earlier. Obviously assuming you can cope with swings in income.

But whatever, you need a plan which you stick to and which is designed to cope with big market swings, far bigger than those of the last 3 months, if you go changing your plan because of fairly normal markets movements eg Nov to now, how are you going to cope with a 40% drop? 

Fairly normal movements. That's an interesting take.   Worst fall in the S&P in January ever........

Yes. Up 19% since a year ago. A bit of froth came off, that's all. So far anyway, I make no prediction on the future, just in case you incorrectly read between the lines again.

Not reading between the lines. Markets are driven by differing opinions. Usefull in weighing up the moves one should take with ones own portfolio. 

I don't try to time the market. Certainly not short term anyway. I'm not arrogant enough to think I know better than the collective market opinion, ie that which sets the current market prices. Anyone who thinks they do know better and hasn't got their own private island is deluded.

AS soon as you start saying something like 'the market is low so I will spend from cash rather than shares' you are timing the market in that you are expressing an opinion that in the future the shares portion of your portfolio will be worth more in comparison to the cash part. 

If share prices are a random walk then this is wrong. 

If they show some sort of 'reversion to mean' then there is a guaranteed winning strategy that an efficient market will arbitrage away by definition.

Isn't that assumption always there?  Otherwise, there's no point investing in equites.

The working assumption is on average stock markets will outperform other assets over the long term.  If this year's returns are -3 standard deviations from average, the probability of next year's returns being -3 SD from the average are the same as being +3 standard deviations from the average.  If it is truly random, a bad year this year doesn't make a bad year next year any less likely.  

I think it's a mistake to think of the stockmarket as random. In some ways it would make it much easier if it was random. If you buy £50k of premium bonds, you can pretty much guarantee an annual expected rate of return in quite a narrow range from all those random events every month, with anything deviating substantially being incredibly unlikely. True randomness actually leads to greater predictability over the long term.

The stock market moves by cause and effect, lots of different causes and effects, but not necessarily unlinked to its history. For instance, the current worry about Russia invading Ukraine. If that threat goes away, the history of the markets may be relevant as the issue they were worrying about has gone so it may revert to what it was, all other things being equal. OTOH if they invade then markets could go down further as something that was just a worry becomes a reality. Similarly the COVID dip, the recovery from the drop certainly wasn't random.

ussdave

Sad times.  My DC pot has recovered 50% of the recent losses just before my monthly investment goes in

Thrugelmir

zagfles said:

kinger101 said:

michaels said:

zagfles said:

Thrugelmir said:

zagfles said:

Thrugelmir said:

zagfles said:

Anonymous101 said:

michaels said:

I find this thread really interesting in that almost everyone:
a) thinks they can time the markets (change asset mix depending on current equity valuations) and
b) don't seem to understand the theory behind SWR

The latter does reveal a flaw in SWR - many of the lowest scenarios (the ones that determine the historical SWR) have seen situations where the pot shrinks to some low multiple of the annual withdrawal amount quite early in the historical period and then recovers, fine with hindsight but had you 'lived' that series of returns I can guarantee you that everyone would have reduced withdrawals when they saw their pot fall to such a low multiple so early and would thus have had some years where they actually drew less than what turned out to be safe.

I think I understand the theory behind SWR's but what you've hit on is THE flaw in SWR. They work in theory but no-one in their right mind would continue to sell assets and spend as they set out once you get to the extremes of the cases which turned out ok.

If you're portfolio drops 50,60,70% of course you're going to alter spending habits, the SWR theory swims against the tide of human nature there. That's why threads like this are so interesting because what starts as a 5-10% drop and market timing ends up being panic selling. As the falls get bigger eventually everyone develops the fear of running out of money.

Emotions asides, drawing a static "SWR" probably doesn't make financial sense either, using a dynamic withdrawal rate would likely deliver better results overall, see link I posted earlier. Obviously assuming you can cope with swings in income.

But whatever, you need a plan which you stick to and which is designed to cope with big market swings, far bigger than those of the last 3 months, if you go changing your plan because of fairly normal markets movements eg Nov to now, how are you going to cope with a 40% drop? 

Fairly normal movements. That's an interesting take.   Worst fall in the S&P in January ever........

Yes. Up 19% since a year ago. A bit of froth came off, that's all. So far anyway, I make no prediction on the future, just in case you incorrectly read between the lines again.

Not reading between the lines. Markets are driven by differing opinions. Usefull in weighing up the moves one should take with ones own portfolio. 

I don't try to time the market. Certainly not short term anyway. I'm not arrogant enough to think I know better than the collective market opinion, ie that which sets the current market prices. Anyone who thinks they do know better and hasn't got their own private island is deluded.

AS soon as you start saying something like 'the market is low so I will spend from cash rather than shares' you are timing the market in that you are expressing an opinion that in the future the shares portion of your portfolio will be worth more in comparison to the cash part. 

If share prices are a random walk then this is wrong. 

If they show some sort of 'reversion to mean' then there is a guaranteed winning strategy that an efficient market will arbitrage away by definition.

Isn't that assumption always there?  Otherwise, there's no point investing in equites.

The working assumption is on average stock markets will outperform other assets over the long term.  If this year's returns are -3 standard deviations from average, the probability of next year's returns being -3 SD from the average are the same as being +3 standard deviations from the average.  If it is truly random, a bad year this year doesn't make a bad year next year any less likely.  

I think it's a mistake to think of the stockmarket as random. In some ways it would make it much easier if it was random. If you buy £50k of premium bonds, you can pretty much guarantee an annual expected rate of return in quite a narrow range from all those random events every month, with anything deviating substantially being incredibly unlikely. True randomness actually leads to greater predictability over the long term.

The stock market moves by cause and effect, lots of different causes and effects, but not necessarily unlinked to its history. For instance, the current worry about Russia invading Ukraine. If that threat goes away, the history of the markets may be relevant as the issue they were worrying about has gone so it may revert to what it was, all other things being equal. OTOH if they invade then markets could go down further as something that was just a worry becomes a reality. Similarly the COVID dip, the recovery from the drop certainly wasn't random.

Stock markets are driven by future Corporate profitability. That's a totally random outcome with no certainty.