Spooked by ongoing sharp decline in value of investments - should I cut my losses?

chiang_mai

https://forums.moneysavingexpert.com/discussion/comment/81937842#Comment_81937842

Nope, my posture feels just fine, I sleep well but as always am constantly looking to learn from these episodes. But I have zero doubt there are many others who aree reading this posts who are not, which once again is why I posted the article and the BR comments. And let us not forget the title of the thread because it might just be that in the OP's case, the correct answer is yes!

masonic

https://forums.moneysavingexpert.com/discussion/comment/81937871#Comment_81937871

For the avoidance of doubt, that wasn't directed at you specifically, but to any other readers who are feeling uncomfortable right now. I know you've spent a great deal of effort balancing your portfolio to your current needs and risk appetite.

talexuser

A lot of interesting points of view in this thread. Let me add another one. My ISA is about 40k down since Feb and the unwrapped around the same. Am I bothered?….. no.

1 to 2% up and down every day is just the noise of markets even in normal, stable times.

There is now more than enough for any care home fees we may eventually need, and enough to fill the ISA and for the yearly 3k IHT exemption give aways on April 6th and any number of £250s to other relatives.

If the market tanked 50% there would still be enough. If you can keep investing for the long term (in my case now 40 years) and can save into the ISA for most of that time you can end up in this situation. It just needs the idea to stick it out, not put money in you need to take out short term, and not be tempted to sell up in a crash, just rebalance and change funds when they no longer suit or fall behind. I have been pretty lucky with active funds overall but there are so few outright winners now (eg Fundsmith) trackers seem the safest way to go, with some long term consistent performers as satellites.

Maybe this is the difference between the older long term investor and the newbie who is worried that his money is now lower than a few weeks ago. But selling up means you will never be that long term investor.

Baldytyke88

They were discussing this uncertainty on radio four, when there may well be shortages of goods worldwide and the war is still unresolved, why is the FTSE higher than it was 6/12 months ago.

They are even asking Trump if he will press the red button and use nuclear weapons; he did say no, but Netanyahu is old and fully committed to this war. I was going to invest a little this week, but I am not sure if the markets are still heading downwards.

masonic

The market climbs a wall of worry.

If someone presses the red button, it probably won't matter whether you invest this week or not.

chiang_mai

https://forums.moneysavingexpert.com/discussion/comment/81953540#Comment_81953540

Why is the FTSE higher?

The FTSE100 and the US Index are highly correlated, because of the US earnings element inside FTSE companies.

The VIX is the US markets fear indicator, it uses a quantifable means to measure market volatility and risk. The VIX is currently at 26 and rising, in "normal" times it might sit under 15.

The slightly less quantifable Fear/Greed indicator is heavily into "Extreme Greed".

US Exchange volumes remain very high.

Those things tell me at least that the FTSE, and other exchanges performance, is driven at least in part, by US buying activity, which is driven by fear and greed, mostly I suspect FOMO.

https://www.investopedia.com/terms/v/vix.asp

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

https://www.cmegroup.com/market-data/browse-data/exchange-volume.html

PS: I'm 76 and don't live in the UK.