Investing in current times

Exodi

chiang_mai

How long term do you think the investing future is of a 76 year old

Should you not have mentioned this in your first post? It's understandable that someone would alter their allocation in line with their investment horizon, as you have done. No-one is suggesting 76 year olds should be all in on equities.

But it's important to represent that in this context, instead of general doom-mongering about equities, e.g. "consistent downwards trend with no indication that things will do other than remain the same or get worse".

Most people anticipate short term dips but appreciation over the long term. As a long term investor myself, I expect that give it a decade or two, I could look back at my portfolios performance and not remember what the relatively minor dip in early 2026 was.

There's nothing to suggest the OP is not investing for the long term either, so I don't think we should encourage a pivot to day-trading.

I think fortunately the OP is wiser than many others we see, as they suggest about further investment (despite novice investors tending to instinctively want to sell when asset prices are down, and buy when they're up).

chiang_mai

https://forums.moneysavingexpert.com/discussion/comment/81942687#Comment_81942687

Whoosh! Your're looking backwards, not at present day and the future.

Exodi

https://forums.moneysavingexpert.com/discussion/comment/81942725#Comment_81942725

Please don't be rude.

I don't make day-to-day investing decisions based on current world events. Let's not forget, this time last year, Trump was in the midst of wagering a tariff war with the world - you can look back at the chart I linked to see what happened following that (though I expect you know as you mentioned "the Nikkei, for example, was up over 41% over the past twelve months and I had the good fortune to partipiate in that rise"). Then before that there was the war in Ukraine, Covid, etc. During each of these events people were prophesying a stock market crash like you are now, yet the opposite happened.

As I said before, I anticipate short term dips but appreciation over the long term.

No-one knows for certain what the long-term future will hold, but while 'past performance does not guarantee future results', it is at least one indicator. I trust that more than my irrational perspective skewed by current events.

dunstonh

Attitude to risk doesn't change with timescale. However, the assets you use to reflect that risk could do.

You could have an 80-year-old high-risk investor with 30% in equities and another with the same risk profile at 100% in equities. Both have the same risk profile. However, different timescales can exist. And how they hold their defensive money can differ. Some may hold large cash amounts outside of the investments. Others hold it within the investments.

chiang_mai

https://forums.moneysavingexpert.com/discussion/comment/81942687#Comment_81942687

The fact has been mentioned on numerous occiaisons in many threads that I've either started or particpitaed in, one hates to keep repeating the point.

chiang_mai

Attitude to risk changes with age. It also changes relative to the scale and nature of the risk and the likelhood that the risk will be realised. How many retail investors constructed their portfolio's, in anticipation of market falls, it is likely that many have. But how many constructed them in anticpation of nucleur war, not many I would suggest. And I'm not sure that many will have formulated their allocations in anticipation of the worlds oil supply being choked off and war in the ME. My entire point here is that risk is a variable that investors must adapt to, just as major market investors and Fund Managers do.

The other point to make is, what type of risk are we talking about, markets, risk, economic risk, emotional risk, personal liquidity risk, because they are all very different? Many people refer to risk as a single all encompassing entity whereas it can be very different things at different times.

chiang_mai

I am not trying to be rude, it's just thast you missed the points that were being made and instead chose to look backwards at what has happened in history.

Exodi

chiang_mai

How many retail investors constructed their portfolio's, in anticipation of market falls, it is likely that many have. But how many constructed them in anticpation of nucleur war, not many I would suggest. And I'm not sure that many will have formulated their allocations in anticipation of the worlds oil supply being choked off and war in the ME.

But it's not for investors to predict the specific events that might unfold, it's just expecting 'bad events' will happen.

Twice you've mentioned 'nucleur[sic] war', I'm not sure why as it's not as if we're engaged in one even now. If the UK is involved in a nuclear war or cataclysmic event in our lifetimes, I think what we are invested in will be of little importance. My investment strategy certainly isn't to hoard gold in the off-chance a nuke gets dropped on us.

You've also cited "the worlds oil supply being choked off". This may be a tad of an exaggeration as only around 20% of the world's oil and gas is shipped from producers in the Gulf through the Straight of Hormuz. Likewise war in the ME… just in the last decade you've had war in Iraq, Syrian Civil War, Yemini Civil War, the Gaza-Israel conflict… in fact I'm not giving it credit, if you look at a timeline of conflicts you'll see conflict in the ME has been near enough constant since you were born.

I'm interested why it's this particular bad event that has you decided that the good days are behind us, and not one of the myriad of other, equally serious, world events you've experienced recently.

I'd be careful at the content you consume online, as some people make a living off of peddling doom-mongering content.

chiang_mai

https://forums.moneysavingexpert.com/discussion/comment/81942829#Comment_81942829

I haven't decided that the good days are behind us, but I have decided that there is now an economic risk that is of a magnitude that requires some form of mitigation, for me at least. Subsequently the discussion has moved on to define different types of risk and whether or not risk and risk tolerance are fixed or dynamic….I maintain that both are the latter. And I'm sorry if I have indeed mentioned nuclear war twice but I wanted to use an extreme as an example, I have no reason to believe nuclear war is likely.

I live in Asia and the impact of that 20% choke on Gulf supplied oil is dire, the country I live in has less than a 30 day supply of fuel remaining and the price of it has now gone far beyond the reach of most rural farmers and workers…the impact on the econonmy will be dire and the same story is being repeated throughout the entire region. The governement Fuel Fund can no longer support the increased costs, the governement coffers will not withstand losses on that scale. You ask me what it is that makes me think this is a particularly serious event, the answer is at least partially, because of what I see around me.

Sorry, to add…I disagree that it is not for investors to predict economic events, this investor for one believes that personal views and knowledge of events plays a key role in investing. How else is an investor to decide their asset allocation and risk tolerance, if they don't use their knowledge as an input!

Exodi

chiang_mai

I'm sorry if I have indeed mentioned nuclear war twice but I wanted to use an extreme as an example

You can appreciate that there's a big difference between planning around events that might cause 20% losses one year, and existential events. Most expect and plan around the former, not the latter.

chiang_mai

I live in Asia and the impact of that 20% choke on Gulf supplied oil is dire

I think that is something that would have been worth mentioning earlier as it provides useful context to your responses. As this is a UK based forum, responses are often provided assuming UK investors. It makes me understand your position a little more, though no reason to suspect the OP is not based in the UK.

chiang_mai

Sorry, to add…I disagree that it is not for investors to predict economic events, this investor for one believes that personal views and knowledge of events plays a key role in investing. How else is an investor to decide their asset allocation and risk tolerance, if they don't use their knowledge as an input!

You've misquoted me… you previously said "I'm not sure that many [investors] will have formulated their allocations in anticipation of the worlds oil supply being choked off and war in the ME" to which I responded "it's not for investors to predict the specific events that might unfold, it's just expecting 'bad events' will happen".

That's obviously completely different to now suggesting I said that it's not for investors to predict economic events happening at all…