US Markets Risk

kempiejon

@chiang_mai

My investment fund is a ring fenced play thing that I try to grow so I can leave it for my wife. Investing gives me pleasure, it's a challenge and its fun but what ever happens to that ring fenced pot, wont impact my retirement or my wifes eventual financial future, my income streams and financial assets are total separate.

Ah that helps. My investment pot is my and SO's retirement and financial future and financial assets. When I talk of investing it's not a separate play thing it's the whole long term plan. I've misunderstood your point of view entirely. I'd guessed when talking of investing around here it is the retirement pot and wealth accumulation strategy as a whole

chiang_mai

https://forums.moneysavingexpert.com/discussion/comment/81872999#Comment_81872999

My apologies if I appear to have misled anyone, I have said what I have several times previously but not everyone will have been aware.

I have several income streams from UK State pension, US Social Security, bank interest from time deposits plus a private pension. I first started to invest because there are so few opportunities to earn income where I live in Asia and I didn't want cash just sitting in a bank wasting away. And because I am not UK resident, the normal onshore investment channels are closed to me hence a SIPP was an obvious solution. I like to think if I had started earlier and my retirement income depended on my investing "skills" and good luck, that I would do everything exactly the same way. So whilst my current investment activity is fun and a good learning experience, I'm not sure that I'm doing anything differently to what I would chose to do anyway, if the stakes were higher.

kempiejon

https://forums.moneysavingexpert.com/discussion/comment/81873039#Comment_81873039

No sweat, thanks for clarification, I didn't know your history so jumped to a conclusion. I too earmark an amount of money to take a punt with; your 12% and the rest of your comments in context might even feel conservative for money one can afford to play fast and lose with. Thanks for clearing it up.

chiang_mai

The US markets Fear Indicator…..it's slightly gimmicky but it also contains some useful pointers to consider.

https://edition.cnn.com/markets/fear-and-greed

Momentum is slowing whilst the put/call ratio is at an extreme level….interestingly volatility is neutral.

Make of it what you will.

sheenas

Why my view of US so called performance is basically hype when you consider ROW performance. Many better and/or safer places. Please note this is not investment advise, just an observation.

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/81878901#Comment_81878901

I don't understand how your chart supports your view that US performance is hype? It shows technology (almost entirely US based) has outperformed a more general US market between I'm guessing 2019 and 2025.

OldScientist

https://forums.moneysavingexpert.com/discussion/comment/81878901#Comment_81878901

I am also struggling to see how your graph provides evidence that the values of US equities are hyped?

The past 10 years have been very good for US equities with annualised returns of 15.9% (in GBP) compared to 13.5% for FTSE world, 9.1% for UK, 10.9% for Europe (ex-UK), 9.8% for Japan and 10.4% for emerging markets (a good portion of that in the last year or so having essentially been flat from the beginning of 2021 to 2025). Anyone underweighting the US for the last decade (and people have talking about overvaluation in the US stock market for at least that long) would have reduced their returns.

Of course, the future is unknown and it may be that US equities will perform poorly compared to other regions over the next 5 or 10 years. Alternatively, they may perform better. Narratives can be constructed that support either of those outcomes.

If you're talking about other asset classes (e.g., fixed income, commodities, etc.) as safer places then, again, future performance over the next 5 or 10 years may or may not be better than equities, but fixed income of short enough duration is likely to have lower volatility. For those craving certainty (absent debt default), a 10 year gilt held to maturity will have an annualised return of roughly* 4.5% (nominal) or 1.6% (inflation linked) which may (or may not) exceed equity returns over the same period.

*The exact total return will depend on the prices at which coupons are reinvested

chiang_mai

I don't presume to speak for the poster, nor to explain the graph, but I do agree with the sentiment expressed. Most of my managed funds have performed far in excess of my US holdings this year. Japan returned 40%, the EU 54% and the UK 40%. On the other hand, the L&G US Index returned 5%, which was why it was subsequently discarded. I believe that's the sort of comparison that the poster is making.

sheenas

https://forums.moneysavingexpert.com/discussion/comment/81879700#Comment_81879700

I have one of my funds as Asia (non Japan) but as you have pointed out even Japan has been performing very well. Not had a UK or US fund for many years now.

chiang_mai

Thinking about the average investor holding period….the AI summary has this to say:

"Average Holding Periods: As of 2024, the average holding period for an equity mutual fund investor is approximately 4.79 years. This is a significant drop from historical peaks of around 8 years in the late 1950s.

Portfolio Inertia: While a segment of investors (estimated at over 20% in some markets like the UK) manages assets passively with holding periods exceeding 10 years, almost no active individual investors maintain a "zero-change" stance for three decades".

So whilst statistically speaking, the average 30 year US returns may have been better than those from other regions, practically speaking, almost nobody ever realised them, especially holders of passive tracker funds. I think this demonstrates the usefulness of statistics that are capable of being derieved, versus those that are practically relevant.

Note: my apologies for posting an AI summary rather than doing any meanigful research but it's late here.