Time to cut our loses?

adindas

diystarter7 said:

I'd never use one of those jokers.
I just invested/gambled and at times topped up and sold when is what I thought was acceptable profits.

Timing is the key and that is the million dollar question. IE you could sell today then the war ends in Russia, new vaccines for Covid and market go up and up and up. On the other hand, Russia hits a nATO country and we are in danger of WW£.

Timing is the key and only you can decide that.

I sold shares a week or so before the crash of 2008/9 -ish and posters abused me for saying the markets were heading for a crash. It was observations on my part and luck.

With stock markets, often the biggest crashes come when we least expect them.

Timing is the key 

That is the way many hedge funds managers, acute traders are making money and beats the market.

There is no need for mystic power. You do not need to time the market in perfection where you get 100% right. You only need half right or more to get the same or better result than the other alternative.

Nowadays, there are a lot of online news to see the current economic, stock market news, analytical tools such as fundamental fundamental analysis, technical Analysis.

Fundamental analysts is to see the fundamental of business, whether the stock is undervalued or overvalued, bellow their NAV value, other financial information, whether they have unsustainable debts, likely to go bankrupt, etc.

After identifying a good stock, another one is technical analysis to identify the good entry point, whether the stocks you are targeting are overbought or oversold. At least, you have a better probability to get a better result by identifying this rather than those who just blindly throw their money.

For those reasons, timing the market is not everyone cup of tea, unless they want to invest time constantly observing the news, to learn a new thing.

adindas

longman27 said:

We invested 200K via Standard Life Wraps, ( 2 x ISA Stocks & Shares of 20K and 160K in a general investment account) in February 2022 via our financial advisor. We've paid a 2% fee at the start so really only 196K invested. There are ongoing fees of 1.86% to pay. Obviously not gone well and now down to 177K total left. We knew there was a risk so not complaining but just don't want to throw good money after bad so my question is should we take 100K back out and at least get 2.6% in a savings account on that and let the rest stay invested? That would certainly feel more comfortable. If investing is as great as advertised then in time the remaining 77K will bounce back in the long, long term. We knew we were investing for the long term but we are nearing 60 and wonder how long the long term will have to be to get back to square one.

Have I got this all wrong?

Thanks for your thoughts. 

Like other people said, if you have not sold it it is just a paper loss.

If you sold it 100K and put it into saving, than you are making a definitive loss of £11.5k. You will need to find a saving account paying 11.5%pa to recover your loss within one year which does not exist at the moment. If you are investing in a good fund such as S&P 500 index, it is not uncommon they will up 30%+ in less than a year. Just look at during the COVID-19 crash in March 2020 and where they were in early-mid 2021.

Also you are just down £23k which is actually just 11.5%. in this current climate. S&P500 already down more than 20%, Nasdaq already down more 30% from all time high.

Some bad funds /stocks are extremely unlikely to return to All time high. These are especially true for funds /stocks mainly driven by hypes rather than fundamental of the company.

But you are using an IFA, so presumably the funds you are investing not these type of funds/stocks.

Eyeful

adindas said:

diystarter7 said:

Timing is the key 

That is the way many hedge funds managers, acute traders are making money and beats the market.

So market timing is how hedge fund manager beat the market.  I understand they also utilizes sophisticated investment strategies to generate returns. These managers are then paid a large 2% annually (for doing their job). Then if they exceed a profit level (which I expect is set low), They are then paid a whopping 20% performance fee on top.
So the investors in those hedge funds are taking all of the extra risks involved and losing a substantial amount of the profit. While the managers take no risk with their own money but take a large chunk of any profit for themselves.

That is  like you paying me to  telling you which numbers to gamble on in the National Lottery. If you lose, hard luck on you. If you win however, I also get 20% of that win.

Warren Buffett bet a hedge fund manager $1000,000 that the S&P 500 index would at the end of 10 years beat, any funds that hedge fund manager chose, but annual charges & fees had to be deducted. Warren Buffett won that bet.
 

adindas

Eyeful said:

adindas said:

diystarter7 said:

Timing is the key 

That is the way many hedge funds managers, acute traders are making money and beats the market.

So market timing is how hedge fund manager beat the market.  I understand they also utilizes sophisticated investment strategies to generate returns. These managers are then paid a large 2% annually (for doing their job). Then if they exceed a profit level (which I expect is set low), They are then paid a whopping 20% performance fee on top.
So the investors in those hedge funds are taking all of the extra risks involved and losing a substantial amount of the profit. While the managers take no risk with their own money but take a large chunk of any profit for themselves.

That is  like you paying me to  telling you which numbers to gamble on in the National Lottery. If you lose, hard luck on you. If you win however, I also get 20% of that win.

Warren Buffett bet a hedge fund manager $1000,000 that the S&P 500 index would at the end of 10 years beat, any funds that hedge fund manager chose, but annual charges & fees had to be deducted. Warren Buffett won that bet.
 

If you are not using analytical tools do not watch the news of the stocks you are investing than it might be gamble. But not necessarily gamble for other people who are using analytical tools, watching updated news, doing hedging, investing / trading in both direction (e.g Long and Short). It is not about getting it right 100%, get the perfect bottom. If you get it 50%+ right you already outperform the other alternative.

Do not you know Warren Buffet is timing the Market ?? In many occasions he has a pile up of cash just to strike when he believes it is at the right time. 

All of the contrarian investors are timing the market. As you might be aware off, vast majority of billionaires investors are contrarian. They do not just blindly buying at stocks at any price at any time. They will wait until they drop below their fair / NAV value before considering to strike. They will wait until the good stocks are oversold, sell off, blood on the street before they strike.

Also Hedge funds are doing hedging and managing several funds. They are trading/investing in both directions "Long and Short". If the headline those funds are underperform, what about their other funds.

Also timing the market is an everyday game for acute traders. Many traders have been doing it for many years. If they could not beat the market why do you think they keep doing it for years if the other alternative throwing money randomly in index funds is less risky and less time consuming ?

Eyeful

adindas: 
 I have heard all what you are stating a number of times before. It is loudest after the stock markets  have risen strongly for some time, then goes quite after a large fall in in the stock markets. The other times I hear it is when someone is trying to sell me a course on investing or technical analysis.

Warren Buffett when looking at a share uses "Fundamental Analysis, Discounted Cash Flow, and a Margin of Safety". He then waits for the share to fall back to that price before he buys it. He is not "timing the market"

Not everyone has the time or inclination to do such in detail research.

Jumping into and out of shares costs money. Large churn over rates of shares in funds, costs money, as does large fund fees. All this money comes out of the pockets of the investor.

Micheal Burry has been out by as much as 2 years in his "market timing calls" .

Just because a few persons are lucky in market timing or calling the tops or bottoms of market does not mean they will be able to do so in the future. Evidence shows they are not.

With all your analytical tools, watching news updates, by the the time you hear it the "big boys"  already have heard and acted upon it. That's how fast things are now.

The vast majority of investors are unlike to have an edge to beat the markets, so I believe they will be much better of with "Time in the markets" not "Timing the markets".

Many people go to gamble on horses at casinos, most of them lose money but they still do it. Why should your traders be any different. Especially if they are doing it with other peoples money.  

 

WillowLea1962

longman27 said:

We invested 200K via Standard Life Wraps, ( 2 x ISA Stocks & Shares of 20K and 160K in a general investment account) in February 2022 via our financial advisor. We've paid a 2% fee at the start so really only 196K invested. 

May I ask what you actually received for the £4,000 fee.  I am hoping that it was more than pointing you to specific Standard Life funds?

adindas

Eyeful said:

adindas: 
 I have heard all what you are stating a number of times before. It is loudest after the stock markets  have risen strongly for some time, then goes quite after a large fall in in the stock markets. The other times I hear it is when someone is trying to sell me a course on investing or technical analysis.

Warren Buffett when looking at a share uses "Fundamental Analysis, Discounted Cash Flow, and a Margin of Safety". He then waits for the share to fall back to that price before he buys it. He is not "timing the market"

Not everyone has the time or inclination to do such in detail research.

Jumping into and out of shares costs money. Large churn over rates of shares in funds, costs money, as does large fund fees. All this money comes out of the pockets of the investor.

Micheal Burry has been out by as much as 2 years in his "market timing calls" .

Just because a few persons are lucky in market timing or calling the tops or bottoms of market does not mean they will be able to do so in the future. Evidence shows they are not.

With all your analytical tools, watching news updates, by the the time you hear it the "big boys"  already have heard and acted upon it. That's how fast things are now.

The vast majority of investors are unlike to have an edge to beat the markets, so I believe they will be much better of with "Time in the markets" not "Timing the markets".

Many people go to gamble on horses at casinos, most of them lose money but they still do it. Why should your traders be any different. Especially if they are doing it with other peoples money.  

This is a misconception that you have got to be Warren Buffet or acute Hedge Fund Managers to be able to calculate the fair value using the Discounted Cash Flow (DCF). Doing it yourself indeed is sometimes time consuming especially to find the data by yourself which sometimes not easy to find.

But In many favourite stocks, it has been done for you. Also there are online DCF calculator. Also there are a lot of ratios and other useful data have been calculated. The easiest example is to see the P/E ratio. But there are a lot of other data have been calculated.

Talking about lucky is like toss a fair coin you get 50% change either got head or tail. This is gambling. You get a better chance to make a better profit if you wait until hey are selling it below their fair / NAV value. When you have identified that the stock you are targeting is currently oversold/ Overbought.

People then could use a technical analysis to determine the best entry point.

Regarding your comment "Many people go to gamble on horses at casinos, most of them lose money but they still do it. Why should your traders be any different. Especially if they are doing it with other peoples money.". Keep in mind in gambling there is no other easy alternative like getting a return in investing in index fund. Those who can not beat the index why do they need to do it for many years. Is it not easier and less time consuming to just buy an index fund  if they could easily get a return of 10% (say) pa.

Regarding Michael Burry he did not get it 100%. But could you not see that he is making money more than average investors ??

bostonerimus

Almost everyone invested in equities will have seen their pot diminish this year, so we are all in the same boat there, However, IMO the big mistake you've made is to pay such high fees. They are going to come out of your pot and make your losses even worse.

DrSyn

So provide a link to the site where DCF is all done for you. 

How much do they charge.

Which sites are going to provide the "margin  of safety" calculations for those shares, so you do not have to? 

What about if they do not cover the shares or markets you are interested in, what do you do then?

Buffett admits himself, that with all of his calculations he has still lost his shareholders a lot of money. So I think it is unlikely you, I or the majority of people will do better than him.

It is interesting that in his will, for his wife 90% of his money will be put into the S&P 500 index & 10% into Treasury Bonds. He could have chosen any of the fancy ways you are suggesting, but he did not, Nor did he pick a discretionary investment company.

Old timers like Warren Buffet, Jack, Bogle, Lars Kroijar together with the evidence I have seen say it is hard to beat the markets. I think that is more likely to be correct, than than the latest vested interested parties & Y tubers that have only just started on their investment journey within the last 10 years. Others of course may not agree.

DrSyn

Just because Micheal Burry may be making more money than the average investor, does not mean you will do so even when trying to following him.

He may just have had a run of good luck. You may not be as skilled or  as lucky as him.

It would be nice to just buy an index fund and get a guaranteed "Real return of 10% (or more if possible) a year"
However with investing there are never any guarantees, that applies to index investing just as much as  it applies to your suggested ways of investing.