Time to retreat to cash?

hedger

The big question for a lot of investors. Sure we are all told investing is long term but with every man and his dog predicting carnage for the next few years is it time to get out and into cash (even to re-buy at much lower prices)

LongTermLurker

hedger wrote: »

The big question for a lot of investors. Sure we are all told investing is long term but with every man and his dog predicting carnage for the next few years is it time to get out and into cash (even to re-buy at much lower prices)

There are various levels of risk in terms of investments and some will continue to do well in a downturn. Add to that the fact that buying cheap and selling high is the ultimate goal, I see sense in the suggestion of investing wisely now. You just need to pick the right funds :rolleyes:

It depends what your timescales are - if you want money in the next few years then the markets may prove too volatile, but for anyone looking to the future - and who has already increased their "cash comfort zone" - the next few months could be a good time to invest.

If you've got the money available, it makes sense to save and invest in whatever proportions feel right at the time.

As to following the sheep (or every man and his dog), I made that mistake in 1999/2000 - I think it's fair to say I woke up after that little episode.

purch

is it time to get out and into cash

Sometimes doing nothing is just as risky as doing something :eek:

LongTermLurker

purch wrote: »

Sometimes doing nothing is just as risky as doing something :eek:

Very philosophical, Purch.

I'm trying to figure out which way you mean that.

tradetime

hedger wrote: »

The big question for a lot of investors. Sure we are all told investing is long term but with every man and his dog predicting carnage for the next few years is it time to get out and into cash (even to re-buy at much lower prices)

Depends a lot on what you are invested in, and where you got in, as I said in response to a previous post of yours on another thread, you could hedge (well actually said from your nick I assume you are hedged). If it were feasable you could take partial profits and hedge. Often times when every man and his dog are predicting something that is precisely the time to do the opposite, though I must confess I'd have a hard time keeping a straight face and telling anyone to buy the market right here.

gfplux

In June 2007 I sold some of my funds and became 79% cash or nearly cash, 21% funds spread over many sectors and regions.
Today 12 months later I now wonder if I should have gone 100% cash.
While my cash and nearly cash have grown my funds are down on average 9.4% (best up 2.4% worst down 17%)
At the moment I am sitting on my hands but leaning towards going more liquid.
I have never have or ever expect to buy at the bottom or to sell at the top but today I don't know whether we are heading to the bottom or on our way up!!!!
I certainly do not wish to put any more of my capital at risk in such volatile times.

ad44downey

hedger wrote: »

The big question for a lot of investors. Sure we are all told investing is long term but with every man and his dog predicting carnage for the next few years is it time to get out and into cash (even to re-buy at much lower prices)

If you hold HBOS, Bradford and Bingley, A&L, etc. then most definitely sell

grebbo

The trouble is that cash doesn't make you a return - at best it keeps up with inflation.

Lokolo

grebbo wrote: »

The trouble is that cash doesn't make you a return - at best it keeps up with inflation.

Not entirely true. Inflation is 3.3% (or 4.3% for RPI) which you can easily get this rate + more in a savings account.

neil324

Lokolo wrote: »

Not entirely true. Inflation is 3.3% (or 4.3% for RPI) which you can easily get this rate + more in a savings account.

yeh right 3.3%:rotfl:

jem16

Lokolo wrote: »

Not entirely true. Inflation is 3.3% (or 4.3% for RPI) which you can easily get this rate + more in a savings account.

Highest rate is 6.5% gross

Basic rate taxpayer = 5.2% net
Higher rate taxpayer = 3.9% net

Not great and inflation in real terms is higher.