Advice for pension funds with looming stock market crash

lamont77

Well I wasn't expecting all the dad bashing. I thought this might have been a nice place with straight up advice. Thanks for those that gave that. My dad has a track record, and has done some pretty impressive things. I take his advice seriously as his knowledge is insightful and usually on the money. It would have been far more constructive and helpful if people could have just accepted the premise of the question ... what happens if the markets take a serious fall? How should I look to cover myself?

 

Marcon

lamont77 said:

Well I wasn't expecting all the dad bashing. I thought this might have been a nice place with straight up advice. Thanks for those that gave that. My dad has a track record, and has done some pretty impressive things. I take his advice seriously as his knowledge is insightful and usually on the money. It would have been far more constructive and helpful if people could have just accepted the premise of the question ... what happens if the markets take a serious fall? How should I look to cover myself?

 

Not intended as dad bashing - but if you have such confidence in his views, why are you asking strangers (which could be why people have queried his credentials)? Why not just ask him?

k6chris

lamont77 said:

Well I wasn't expecting all the dad bashing........what happens if the markets take a serious fall? How should I look to cover myself?

 

You don't need to worry.  You have at least 20 years before you can access you pension.  The market will (very probably) crash during that time, then it will (more probably) grow again to overcome that fall.  I tend to agree with your dad, but no idea if it will start today, next month or in 3 years time.  Have a look at some historic charts of say the S&P500 (SPX) and see what has happened over the last 203-30 years.  Good luck.

bigfer

I always remember the advice my dad gave me.... always be up front with everybody.

Great father, terrible goalkeeper.

Scallypud

dunstonh said:

My dad thinks that there is a crash around the corner that could well blow 2007/2008 out of the water

Thanks for letting me know........i'm selling up

QrizB

lamont77 said:

Well I wasn't expecting all the dad bashing.

I'm sure your dad is a great guy. The posters here were wondering exactly why he thinks a crash is imminent when "the market" doesn't seem to agree.

lamont77 said:

My dad has a track record, and has done some pretty impressive things. I take his advice seriously as his knowledge is insightful and usually on the money. It would have been far more constructive and helpful if people could have just accepted the premise of the question ... what happens if the markets take a serious fall? How should I look to cover myself?

If you honestly believe that the markets are going to plummet in the next week or two, you could simply sell everything to cash. Once the crash has happened you can buy everything back at a lower price and end up with more assets than you have today. If the crash doesn't happen, you'll only have missed out on a month's growth.

Alternatively, what model did you use when choosing your current split of investments? What portfolio changes does that model suggest?

MarkCarnage

How many of the last 3 bear markets/ 'crashes' has your Dad predicted accurately? 1,2, 3....or 10??

Even if he correctly identified 2000-03, 2008-9 and 2020, which is probably unlikely, did he also predict another half dozen that didn't happen? 

And more importantly, when did he reinvest again? That's what really matters if you get the timing broadly right to sell....it's when you buy again. 

Some markets/stocks/funds have already had a 'crash' as I'm sure you know. I think that there's every chance that it may widen out, but we may just see some protracted weakness rather than a single 'crash' moment. 

For someone with 20 years to go, your portfolio doesn't look too far wrong.....unless of course you think you can time markets. 

Thrugelmir

lamont77 said:

Well I wasn't expecting all the dad bashing. I thought this might have been a nice place with straight up advice. Thanks for those that gave that. My dad has a track record, and has done some pretty impressive things. I take his advice seriously as his knowledge is insightful and usually on the money. It would have been far more constructive and helpful if people could have just accepted the premise of the question ... what happens if the markets take a serious fall? How should I look to cover myself?

 

Then discuss it further with him. Dig deeper to understand what his perceptions are based on. How he intends to position his portfolio to minimise the downside fall. The term markets is extremely broad. Within the markets are thousands of individual companies. Not all will fall in the event of a correction. Some will be unchanged. Some will actually rise. In 2007/08 anybody with a minimal exposure to house builders and financial stocks will have experienced a far better portfolio performance. 

Steve182

There will be a crash for sure, perhaps in the next year, or two, or three or whenever.

Don't necessarily sell out of equities, they could gain another 10, 20, 30, 40, 50+ % from now until the crash.

Most people who try to predict the market fail miserably.

To mitigate the affect of the crash you could look at what investments might best survive or even benefit from the turmoil and move some of your portfolio into those to better diversify. 

Thrugelmir

Steve182 said:

Don't necessarily sell out of equities, they could gain another 10, 20, 30, 40, 50+ % from now until the crash.

As long as the stock markets resemble a casino then that's entirely possible. Though as people buy in at these higher levels they are simply reducing their future returns.