I think the market is going to crash. How do I protect my money?

jscol

lisyloo said:

jscol said:

It's rumoured that house prices will fall. Would you sell your house? Buy it back when it's cheaper? Would you worry if it was worth less than it presently is? 
There are similarities to your investment situation. 

It’s not that similar although I understand you point about I being a “paper” loss.

houses have high transactional costs plus provide a place to live.
would you worry?
depend on circs again
if you had no plans to move and plenty of equity then probably not.
if you might want to move and don’t have equity then yes it could be a  if worry for some.

My comment was designed to be tongue in cheek. 

I didn't say the situation was similar i said there are "similarities"

1. Potential for paper losses
2. Long term financial commitments have been made
3. Personal circumstances may change
4. Rumours of crashes / recoveries and the worry that brings some people

In a year's time the OP may discover that his or her property losses far exceed his investment losses (on paper.) Yet we tend to much more relaxed about this. I think we assume or have seen the property market recovers over time. I believe that ideally one would look at stock market in same way.

JusinScot

RG2015 said:

JusinScot said:

Albermarle said:

I am not an investor.
 I have the bulk of my money in a VLS 80 and BlackRock consensus 100 funds

The two statements are completely contradictory.

I think the market is going to crash.

Some would say it has already crashed, or at least had a significant downward correction. The best time to sell was about 10 months ago. It is quite possible that now is quite a good time to buy rather than sell. In reality nobody knows.

 

I don't consider myself an investor. I did some research, found a couple decent funds, put my money in it and hoped for the best.

I get that no one know but my guess is it's going to crash and I'm looking for options on what to do in my case? 

To get a more considered answer you will need to provide a little more information.

Your goals and age will play a big part in this. How long until you retire, are you saving for a mortgage deposit etc?

14 years till I retire and the goal will be to ... Retire with as much as possible ☺️

InvesterJones

JusinScot said:

RG2015 said:

JusinScot said:

Albermarle said:

I am not an investor.
 I have the bulk of my money in a VLS 80 and BlackRock consensus 100 funds

The two statements are completely contradictory.

I think the market is going to crash.

Some would say it has already crashed, or at least had a significant downward correction. The best time to sell was about 10 months ago. It is quite possible that now is quite a good time to buy rather than sell. In reality nobody knows.

 

I don't consider myself an investor. I did some research, found a couple decent funds, put my money in it and hoped for the best.

I get that no one know but my guess is it's going to crash and I'm looking for options on what to do in my case? 

To get a more considered answer you will need to provide a little more information.

Your goals and age will play a big part in this. How long until you retire, are you saving for a mortgage deposit etc?

14 years till I retire and the goal will be to ... Retire with as much as possible ☺️

With 14 years to play with you don't need to worry so much about short term movements, instead try and pick what you think is right for you going forwards. Compared to the situation a year ago, funds are cheaper so you will get more for your money. Will they get cheaper still? Probably - but how much and for how long people do not know.

As for some options:

1) you could ignore the past and consider what you would do if you were starting to invest now. For most people that would mean weighing up their risk tolerance and picking an investment strategy accordingly. You probably did this already when you first invested, so then the question is what has changed since you last considered your risk appetite etc.? Maybe you've discovered your risk appetite isn't what you thought it was, in which case, with a blank slate, where would you invest?

2) you could sit tight - your investment choices should have been made before with the possibility of downturns in mind, and this is one of those downturns. I think most losses are made when people panic and crystallise loses, when what they should be doing is either to sit tight or at most look at it from the perspective of a blank slate and don't let emotions rule decisions

3) if you're convinced the market is going to fall further then you could move your investments into funds that will benefit from market crashes - I'd definitely speak to an advisor if so

4) you could pull out into cash, and hope to time the market back in at a lower point. This is the riskiest strategy as timing the market is a fools errand, and the current govt seem to be doing their best to make cash quite flaky. Not saying it couldn't be done, but if the reason for doing it is a preference for avoiding risk, it's quite the opposite.

RG2015

JusinScot said:

RG2015 said:

JusinScot said:

Albermarle said:

I am not an investor.
 I have the bulk of my money in a VLS 80 and BlackRock consensus 100 funds

The two statements are completely contradictory.

I think the market is going to crash.

Some would say it has already crashed, or at least had a significant downward correction. The best time to sell was about 10 months ago. It is quite possible that now is quite a good time to buy rather than sell. In reality nobody knows.

 

I don't consider myself an investor. I did some research, found a couple decent funds, put my money in it and hoped for the best.

I get that no one know but my guess is it's going to crash and I'm looking for options on what to do in my case? 

To get a more considered answer you will need to provide a little more information.

Your goals and age will play a big part in this. How long until you retire, are you saving for a mortgage deposit etc?

14 years till I retire and the goal will be to ... Retire with as much as possible ☺️

Are you able to make additional voluntary contributions (AVCs) to a pension?

These could give you a 25% return if taken as a lump sum upon retirement. This would be even higher if you pay tax at the higher rate.

I did this for the last year before retiring effectively living off my savings. You would need to research whether it would be equally as effective for a longer period, taking inflation into account.

Albermarle

JusinScot said:

RG2015 said:

JusinScot said:

Albermarle said:

I am not an investor.
 I have the bulk of my money in a VLS 80 and BlackRock consensus 100 funds

The two statements are completely contradictory.

I think the market is going to crash.

Some would say it has already crashed, or at least had a significant downward correction. The best time to sell was about 10 months ago. It is quite possible that now is quite a good time to buy rather than sell. In reality nobody knows.

 

I don't consider myself an investor. I did some research, found a couple decent funds, put my money in it and hoped for the best.

I get that no one know but my guess is it's going to crash and I'm looking for options on what to do in my case? 

To get a more considered answer you will need to provide a little more information.

Your goals and age will play a big part in this. How long until you retire, are you saving for a mortgage deposit etc?

14 years till I retire and the goal will be to ... Retire with as much as possible ☺️

I think that would be a lot of people's goal! The more risk you take, the more likely the end result will be bigger/more money in the pot. However that is not guaranteed and the more risk you take, it increases the possibility of a negative result.

Much better to work out a realistic size of retirement pot to aim for, taking into account your attitude to risk. The last bit is the difficult bit. It seems you have started out with quite high risk investments, but now you are nervous about them, so probably having high risk investments is not for you.

InvestorJones laid out four options for you, but here is a 5th .

Move the funds into more medium risk investments. You will crystallise a small loss but if the markets do dive, you will feel the pain less. On the other hand if markets pick up you will still see some good benefit from that.

Linton

JusinScot said:

RG2015 said:

JusinScot said:

Albermarle said:

I am not an investor.
 I have the bulk of my money in a VLS 80 and BlackRock consensus 100 funds

The two statements are completely contradictory.

I think the market is going to crash.

Some would say it has already crashed, or at least had a significant downward correction. The best time to sell was about 10 months ago. It is quite possible that now is quite a good time to buy rather than sell. In reality nobody knows.

 

I don't consider myself an investor. I did some research, found a couple decent funds, put my money in it and hoped for the best.

I get that no one know but my guess is it's going to crash and I'm looking for options on what to do in my case? 

To get a more considered answer you will need to provide a little more information.

Your goals and age will play a big part in this. How long until you retire, are you saving for a mortgage deposit etc?

14 years till I retire and the goal will be to ... Retire with as much as possible ☺️

The problem with that ambition is that you will only know what "as much as possible"  is, and how to get it after the event.  The answer could have been put all your money into an obscure small company to become a multi-millionaire.  That does not mean that putting your money into obscure small companies is likely to be a successful way of maximising your return - most go bust.

The alternative is to determine the minimum return you need to provide an acceptable standard of living in retirement and aim to achieve that.  You will know well in advance whether you are on target or not and can change your objectives or investment strategy accordingly.  For example, If you are gaining more than you need you could reduce the risk level to ensure that your plans are not ruined by a crash.

One thing is certain - investing at high risk and jumping ship when the conditions get bumpy is not the best way to achieve a comfortable retirement..

bostonerimus

JusinScot said:

I am not an investor. I have the bulk of my money in a VLS 80 and BlackRock consensus 100 funds. 

I think the market is going to crash. How do I  protect my money.

Do I pull it all out and keep cash and let inflation take a chunk? Is there a safer fund I can move it too? 

What are you doing? 

You are an investor, but one who has obviously not planned their asset allocation and appetite for risk taking to account for market fluctuations. If you don't need this money for more than a decade then leave it where it is. If you have the money ear marked for something in the next couple of years you are probably a little late to adjust your asset allocation as the markets have already fallen quite a bit.

lisyloo

JusinScot said:

RG2015 said:

JusinScot said:

Albermarle said:

I am not an investor.
 I have the bulk of my money in a VLS 80 and BlackRock consensus 100 funds

The two statements are completely contradictory.

I think the market is going to crash.

Some would say it has already crashed, or at least had a significant downward correction. The best time to sell was about 10 months ago. It is quite possible that now is quite a good time to buy rather than sell. In reality nobody knows.

 

I don't consider myself an investor. I did some research, found a couple decent funds, put my money in it and hoped for the best.

I get that no one know but my guess is it's going to crash and I'm looking for options on what to do in my case? 

To get a more considered answer you will need to provide a little more information.

Your goals and age will play a big part in this. How long until you retire, are you saving for a mortgage deposit etc?

14 years till I retire and the goal will be to ... Retire with as much as possible ☺️

If you don’t need this money for the short term then I’d leave it where it is.
Ideally you want to buy low sell high, so ideally you’d want stocks to stay low for 14 years and then rocket when you sell you 25% tax free lump sum.
So you need to see this as a “double edged sword”.

im closer to retirement than you but im still glad im buying not selling.

I am also working closely on my budget so I know what I need/want to live on and how big my pot needs to be.

drives my other half nuts sometimes when I write down everything we spend but I have a pretty good idea of my budget.

Audaxer

JusinScot said:

RG2015 said:

JusinScot said:

Albermarle said:

I am not an investor.
 I have the bulk of my money in a VLS 80 and BlackRock consensus 100 funds

The two statements are completely contradictory.

I think the market is going to crash.

Some would say it has already crashed, or at least had a significant downward correction. The best time to sell was about 10 months ago. It is quite possible that now is quite a good time to buy rather than sell. In reality nobody knows.

 

I don't consider myself an investor. I did some research, found a couple decent funds, put my money in it and hoped for the best.

I get that no one know but my guess is it's going to crash and I'm looking for options on what to do in my case? 

To get a more considered answer you will need to provide a little more information.

Your goals and age will play a big part in this. How long until you retire, are you saving for a mortgage deposit etc?

14 years till I retire and the goal will be to ... Retire with as much as possible ☺️

 If I had 14 years to retirement, I'd definitely be investing as much as I could at the cheaper prices currently on offer. 

baldeagle09

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that referencing house prices may be sometimes be pertinent to a user's specific MoneySaving situation, we ask that you please refrain from going off-topic into broad, general debates about the housing market, the economy and politics. Threads that are found to have derailed into wider discussions may be removed. Thank you for your understanding.

Perhaps MSE should consider a similar warning for Savings and Investments.

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