Time to retreat to cash?

purch

Isn't 'buy and hold' what fund managers are essentially trying to persuade small investors to do ?

Sure, cos it's suits the Industry....the last thing they want is those 'pesky' amateurs buying and selling......and maybe actually thinking about their Investments.

It always makes me smile when they trot out the old mantra...'If you missed the 10 best days etc etc'.............conveniently forgetting to mention you also will get the 10 worst days when the markets falls 300 points as well !!!

It's the same as the 'drip feed....cost averaging' nonsense.....apparantly, so the brainwashing goes.....you are supposed to be 'glad' that the units you bought last month are lower this month, cos now you can buy more of them (whoooop whooop :T )....thats the way to make money.

The last thing the Industry wants is the man/woman in the street actually thinking too much, and maybe making decisions for him/herself.

black_taxi_2

bear---worse than a sharp drop--is a slow drip---over 2/5 years

i see cramer kept his cool breakfast tv--"SELL EVERYTHING YOU GOT"funny thing is--im sure he called the low over the weekend

hedger

black_taxi wrote: »

bear---worse than a sharp drop--is a slow drip---over 2/5 years

i see cramer kept his cool breakfast tv--"SELL EVERYTHING YOU GOT"funny thing is--im sure he called the low over the weekend

but was he BUYING when everyone was selling - a classic trick

GeorgeHowell

purch wrote: »

The last thing the Industry wants is the man/woman in the street actually thinking too much, and maybe making decisions for him/herself.

Indeed. Because if the small investor thinks enough then he/she will come to conclusion that equities and other capital-at-risk investments are largely bad news for the small investor. The myth has surely been exploded now, and unless stock markets experience a large, unexpected, and unlikely recovery soon I can see the fund management and financial advice industry being the next one to suffer a big downturn.

hedger

Simple Question:
What Wud U Do In My Situation - Take The Hit And Get Out (losing £20,000) Or Stay In For A Recovery In A Few Years Time (with The Risk Of Losing More)?

dkmax_2

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)

Cash has no inherent value and so you are more readily exposed to the mercy of inflation. This is going to go through the roof so all those cheering their secure savings will find that the purchasing power will plummet - nothing comes for free. Diversity is always key in investing - cash, equities and commodities. If everything really goes pear shaped then its game over.

wombat42_2

dkmax wrote: »

Cash has no inherent value and so you are more readily exposed to the mercy of inflation. This is going to go through the roof so all those cheering their secure savings will find that the purchasing power will plummet - nothing comes for free. Diversity is always key in investing - cash, equities and commodities. If everything really goes pear shaped then its game over.

Commodity guru Jim Rogers makes the point that in general commodities go up if stocks go down and vice versa. But it isnt hapenning at present except for gold. But if you are generally bearish on stocks, commodities may be a good bet.

StevieJ

hedger wrote: »

Simple Question:
What Wud U Do In My Situation - Take The Hit And Get Out (losing £20,000) Or Stay In For A Recovery In A Few Years Time (with The Risk Of Losing More)?

I would

---

Buy more.

StevieJ

wombat42 wrote: »

Commodity guru Jim Rogers makes the point that in general commodities go up if stocks go down and vice versa. But it isnt hapenning at present except for gold. But if you are generally bearish on stocks, commodities may be a good bet.

I think commodities are the here and now, whereas stocks tend to look forward, so, moving into a recession you expect commodities to fall and stocks start to rise (looking past the recession). Does that make sense?

gfplux

Hedger started this thread on 23 June 2008 when the FTSE closed at 5667.
Yesterday the FTSE closed at 4605 a drop of over 18% since.
Hopefully those wanting to retreat to cash have already done so.
No one knows where we go from here but it may take a long, long time to recover to 2007 levels or we could be there in 6 months or less.
HOWEVER
I learnt my lesson (I think)
During the tech crash I hung on to a tech fund that lost a lot of value (a lot) 4 years later, yes 4 years later I finally sold still heavily under water. probably today it would not have recovered it's value.
Sorry the figures are rather unclear as I no longer have the paperwork and have done my best to forget my folly.
In fact having finished typing I looked up the FTSE Techmark and at the end of Feb 2000 it stood at 5132 and yesterday it closed at 1228 WOW!