Your correction strategy?

Let's assume, for the sake of this thread, that the current market wobble becomes a larger correction and let's assume you have some 'cash' waiting to be invested in the market. What is your strategy for investing and why? All in now (time in the markets)? Drip feed it in (cost averaging)?? Wait until an xx% pullback and then all in (buy low, sell high)??? Curious as to people's investment strategies at such a time!
"For every complicated problem, there is always a simple, wrong answer"
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  • If it does become a larger correction, then my next scheduled rebalance will see me buying equities to restore my target asset allocation.

    Now, I might miss an opportunity if the dip proves to be short-term, but I don't really trust myself to know that. So as far as possible I want to follow the rules that I've set for myself in advance.

    Odysseus tying himself to the mast, or something :)
  • k6chris
    k6chris Posts: 738
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    If it does become a larger correction, then my next scheduled rebalance will see me buying equities to restore my target asset allocation.


    So are your rules based on a fixed time thing (rebalance every Jan 1st) or a price thing (rebalance every xx% of a pullback)??
    "For every complicated problem, there is always a simple, wrong answer"
  • Fixed timing. I rebalance the overall equity vs non-equity allocation quarterly, but not necessarily each individual fund. I do that fund-level rebalance only annually, to save some trading costs.

    I don't have a price trigger per se. But that said I wouldn't bother doing a small rebalancing trade, so in a sense, prices must have moved by X on my quarterly date for me to take action.
  • ariarnia
    ariarnia Posts: 4,225
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    We've just invested around 10% of the value of our portfolio which has temporarily reduced our cash fund so the next step will be to build that back up over the next quarter.

    I don't consider it timing the markets so much as investing in areas we want to invest in which are now better value than they were before the recent dip.

    Our strategy is to identify what we would like to invest in, consider it's worth vs it's potential and, when it's good value, buy in according to our longer term preferred asset allocation (all sounds very professional but only achieved as a result of excellent independent advice annually and a little attention to detail during the year).

    If what we've purchased continues to drop, well I'm happy that we've got a good price at todays price. If it's still low next month we might drop in another 5% but I'm not expecting it as that would make our cash uncomfortably low and emergencies do happen...
    Almost everything will work again if you unplug it for a few minutes, including you. Anne Lamott

    It's amazing how those with a can-do attitude and willingness to 'pitch in and work' get all the luck, isn't it?

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  • cjv
    cjv Posts: 513
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    Is it an ok strategy for an inexperienced investor with long term outlook to just ignore everything the market does? I have a SIPP in which i hold 50/50 VLS 80 and HSBC 80.

    My current plan is to just set and forget for 20'ish years, then reduce some risk.

    Also now have a NEST pension for employer contributions (zero balance currently) which I have set to the Higher Risk Fund. with the same plan to just set and forget.
  • ColdIron
    ColdIron Posts: 8,901
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    cjv wrote: »
    Is it an ok strategy for an inexperienced investor with long term outlook to just ignore everything the market does? I have a SIPP in which i hold 50/50 VLS 80 and HSBC 80.
    Yes, it's an OK strategy. Let Vanguard and HSBC look after it
  • cjv
    cjv Posts: 513
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    ColdIron wrote: »
    Yes, it's an OK strategy. Let Vanguard and HSBC look after it

    Thanks. One day if I decide to educate myself more I may pluck up the courage to get a bit more hands on, but for now as you say I will let them look after it! saves worrying about the ups and downs along the way.
  • Alexland
    Alexland Posts: 9,653
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    You don't want to be too hands on as the research suggests most people get it wrong. You are doing fine.
  • Audaxer
    Audaxer Posts: 3,506
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    cjv wrote: »
    Is it an ok strategy for an inexperienced investor with long term outlook to just ignore everything the market does? I have a SIPP in which i hold 50/50 VLS 80 and HSBC 80.
    If you are still accumulating, the best strategy would be to still keep adding to the funds as you will be buying more units at cheaper prices.
  • cjv
    cjv Posts: 513
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    Audaxer wrote: »
    If you are still accumulating, the best strategy would be to still keep adding to the funds as you will be buying more units at cheaper prices.

    I plan my monthly contributions to continue, no matter what happens in the markets. I did top up with some extra units in Feb, just some spare change I had lying around nothing significant.
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