Bear markets - strategies for coping

Reg_Smeeton

Thanks for your replies / sanity checks everybody....

I know one of the stock answers would be to reassess my attitude to risk, but in an environment where more or less everything is slowly sinking it probably makes more sense to try and sit tight and try to bring my asset allocations back into line with new contributions (I overweighted the UK last year as it looked just about the only thing that was “cheap”, value has become overweight by default as everything else has dropped).

Eyeful

Bear or Bull markets the strategy is the same.

1. Invest within my risk tolerance.
2. Only look at the investments maybe 4 times a year.
4. Ignore market noise.
3.Get on with life.

It may be simple, but it does allow me to not worry and sleep at nights

bostonerimus

Reg_Smeeton said:

Thanks for your replies / sanity checks everybody....

I know one of the stock answers would be to reassess my attitude to risk, but in an environment where more or less everything is slowly sinking it probably makes more sense to try and sit tight and try to bring my asset allocations back into line with new contributions (I overweighted the UK last year as it looked just about the only thing that was “cheap”, value has become overweight by default as everything else has dropped).

So what is your target asset allocation and what is it now?

InvesterJones

Eyeful said:

Bear or Bull markets the strategy is the same.

1. Invest within my risk tolerance.
2. Only look at the investments maybe 4 times a year.
4. Ignore market noise.
3.Get on with life.

It may be simple, but it does allow me to not worry and sleep at nights

Very good idea. And sleeping at night is worth a small fortune.

P1Fanatic

Do people really have the will power to only check their investments 4 times a year? Maybe I find it harder as my work pension is with Scottish Widows and the balance shows every time I login to the Halifax App to check my credit card balance / payments. And my LISA and S&S ISA I'm always checking the latest payment / Govt Bonus arrived ok, so its difficult to not notice the balance.

Or is MSE "I don't check my investments" the forum equivalent of I never rubber.....oooh look at that car on fire....neck  

quirkydeptless

P1Fanatic said:

Do people really have the will power to only check their investments 4 times a year?

I just have the will power to only check my investments 4 times a day

Malthusian

P1Fanatic said:

Do people really have the will power to only check their investments 4 times a year?

The vast majority of people don't even check them once a year. People who are actively engaged with their long-term investments, but not engaged enough to know deep down that today's value is useless information, are a minority.

When I talk to people about the 2022 drop, a lot of them are surprised when I tell them their fund dropped by significantly more in the coronavirus crash. They blinked and missed it.

Checking investments 4 times a year is too often - the only good thing about 4 times/year is that it might seem an acceptable compromise to someone who currently checks them daily.

Checking them daily is useless information. If your investments were down 15% yesterday you already know with certainty that they will be about 15% down today. Exactly how down is unimportant unless you need the cash today. Looking at information that you already know is negative is scratching an open wound.

Albermarle

It only matters how many times you check them, if you actually respond in some way to the short term movements.

If you are the type who is not easily panicked, then if you check them once a year, or four times a day, it does not really matter. I check mine regularly as it helps me ( I think) to see how different types of investments react differently to different market conditions. So I think it assists in my learning process.

However if you are the nervous/Armageddon is around the corner type, then probably best not to look.

InvesterJones

Being less engaged is probably a very good thing - I know the weakest factor for my investment performance is probably me.

I think investments should only be checked when you are making a decision based on that information, for example, rebalancing. If you're trying to react to, say, a day's change in value, then you're going to be way too late to react. If you're not going to making a decision.. then why are you checking? (I know, human nature!)

I like Ramin from Pensioncraft 's approach - have a small 'fun' portfolio that you use to satisfy the itch to check and change, allowing you to stay away from changing the bulk of your serious portfolio.

Swipe

How can you buy the dip if you don't check them?