Moving away from US Equities

masonic

talexuser said:

Thanks, I agree Gold at an all time high might be a bit risky on the other side of the coin (oops, not intentional), and it seems to have been pretty high since 2020. Do you mean UK gilts or other bonds? never bought any.

I've been using index linked gilts. You can see what is on offer and the real yield here: https://www.dividenddata.co.uk/index-linked-gilts-prices-yields.py

RPI will be aligned with CPIH from 2030, but still, 1-2% above even this less generous inflation measure is not a bad return with no risk if you hold to maturity. There may be opportunity to sell early for a greater rate of return. These can be bought directly at several brokers (AJ Bell, HL, ii, SWSD) and are well worth researching in my view.

talexuser

Only just discussing Gold for more record highs due to unforseen interventions. Buy high does not seem a good strategy, but who knows nowadays.

Cus

talexuser said:

Only just discussing Gold for more record highs due to unforseen interventions. Buy high does not seem a good strategy, but who knows nowadays.

Would you 'buy high' now with global indexes or would you try to time the market with those?

fizio

eskbanker said:

fizio said:

Hmmm - I am still 100% equities in pension and ISA and about 90% US via S&P and dev world tracker
i do mull over reducing both equities and US but keep delaying it as they keep going up.

Are you waiting until they're going down?

Fair point - I think I am procrastinating and will likely do nothing and ignore the AI bubble stories. Most likely I will use non-us funds for future investments or next ISA. 

talexuser

Cus said:

Would you 'buy high' now with global indexes or would you try to time the market with those?

No, I would not try to time by selling huge amounts, I've gone through a few crashes in ~40 years, and if there is no reason to sell during a crash, just weather the rebound, otherwise you need pretty exact timing to get back in, not just missing any extra gain going out. Those studies that show just missing a handful of best days in the market can halve your return for the year, timing that fine is pretty impossible.
But if a 30 or 40% or 50% drop for some years is too much to stomach then change, but such a US crash will bring down most equities evrywhere and some areas will recover better than others when the panic settles, so any equity might be risky in the short term.

We were talking about Gold as a safety, or at least an opposite if markets crash, but the idea was it too could be volatile and not as safe as you think. I would not buy indexes now, in fact sold USA in the ISA a little while back, but just sticking with existing global meanwhile and just putting all dividends and updates into existing capital preservation funds where the main 'bubble' stocks are not present, a reasonable shift while the party goes on.
If you think e.g. Nvidia is so overpriced it can never make future earnings, a perfectly valid opinion, then yes Global index is a risk.

talexuser

fizio said:. next ISA. 

Wow, that is the 64,000 $ question if not much happens before April 6th!

GeoffTF

I have done what I always do: as little as possible. I possess neither a crystal ball nor a time machine.

aroominyork

talexuser said:

Cus said:

Would you 'buy high' now with global indexes or would you try to time the market with those?

But if a 30 or 40% or 50% drop for some years is too much to stomach then change, but such a US crash will bring down most equities evrywhere and some areas will recover better than others when the panic settles, so any equity might be risky in the short term.

The reason I like corporate bonds, especially short dated, is that equities are driven by valuation and also by psychology/sentiment, but bonds are mostly driven by valuation. If coupons and capital are repaid, it does not matter if the markets think everything is overvalued and needs a huge correction.

london21

Funny enough I listened to a podcast talking about this today,
I am a bit concerned as i have global index funds mainly and s&p500 but it is tech heavy and US heavy generally. Even the global index the top 10 companies are mainly tech companies.
I have in s&p500 203k
I have in vanguard global all cap index 165k

My mom recently also said she wants to invest in global index funds like i have and has put 35k in, previously in savings account but interest rate has dropped.

https://youtu.be/if8MMGOw7ng?si=DCKlCLP00qCH-J5P

PixelPound

Alistair31 said:

For better or worse (currently the latter) I recently sold my 100% equities ISA holding to cash* (MMF). Partly because of my strong conviction that AI is a bubble that will pop, bringing down the broader market with it, in the near future. Also partly because I was just keen to lock in already impressive gains, having enough I suppose.
 OTOH, I can see Trump attempting to juice the markets at all costs for the rest of his term, and how much gain does one miss before having some regret? 

How to allocate April’ ISA allowance then, hmm…

*I have left SIPP and DC pension contributions 100% equities and don’t even look at that

What will you do if there is no "pop" in 2026, and then similarly not one in 2027? If you have enough and it's to lock in gains, e.g. retiring soon, that makes sense - a strategy of de-risking in the 5 years up to retirement is advisable. However simply removing from equities completely because of an expected downturn can be counter productive if the crash doesn't happen for a couple more years.