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  • FIRST POST
    • BrockStoker
    • By BrockStoker 5th Feb 18, 8:32 PM
    • 200Posts
    • 87Thanks
    BrockStoker
    Correction in progress!
    • #1
    • 5th Feb 18, 8:32 PM
    Correction in progress! 5th Feb 18 at 8:32 PM
    I've just seen the largest (single day) spike in volatility I've ever experienced (currently @ 106%). Certainly it's looking like this is going to be the largest correction since 2015!

    https://uk.investing.com/indices/volatility-s-p-500-chart

    Time to look at what to buy with the cash I've been holding!

    More inclined to look at overseas assets/equities, but I have been thinking about buying some UK micro-cap for a while, and possibly some Chinese equities. Any one else shopping right now?
Page 11
    • Cotta
    • By Cotta 9th Feb 18, 9:35 AM
    • 2,658 Posts
    • 1,097 Thanks
    Cotta
    No sooner do I say that Bitcoins were stabilising only to find out they've dropped a further £200, I honestly don't get it.
    • Glen Clark
    • By Glen Clark 9th Feb 18, 9:58 AM
    • 4,111 Posts
    • 3,139 Thanks
    Glen Clark
    No sooner do I say that Bitcoins were stabilising only to find out they've dropped a further £200, I honestly don't get it.
    Originally posted by Cotta
    There is no underlying value in Bitcoin so the price depends on sentiment - which is impossible to predict.
    At least with diversified equities you have underlying value to stop the price falling to zero.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • Glen Clark
    • By Glen Clark 9th Feb 18, 10:08 AM
    • 4,111 Posts
    • 3,139 Thanks
    Glen Clark
    I'd agree with most of that. The sell off has been pretty indiscriminate so far. Good companies with strong Q4 results getting thrashed.
    Originally posted by BrockStoker
    Yes but their share prices have been inflated by QE. Perversely the stronger global economy is the reason for falling share prices. QE has distorted asset prices to the point where the tail is wagging the dog. Like the 'Taper Tantrums' of previous years, Investors fear QE will be withdrawn. Previous times it didn't happen, so equity prices rebounded This time it might happen, so equity prices don't rebound. Who knows what Central Banks will do?
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • Zola.
    • By Zola. 9th Feb 18, 10:24 AM
    • 1,209 Posts
    • 479 Thanks
    Zola.
    This is the first time as a young investor that I have seen my investments getting close to the barely breaking even figures. Only a month ago I was sitting at 8% up in my VLS, now down to 1%.

    Not panicking, another £300 plonked this month as normal into it. Getting shares on sale, which is nice, hopefully it picks up again soon...
    • jamei305
    • By jamei305 9th Feb 18, 10:24 AM
    • 318 Posts
    • 379 Thanks
    jamei305
    I don't know about bitcoin but gold certainly hasn't responded to the stock markets over the last week
    • hutman
    • By hutman 9th Feb 18, 10:48 AM
    • 94 Posts
    • 29 Thanks
    hutman
    this is a great time for those who want to 'time the market' to come out of their closets.
    • Economic
    • By Economic 9th Feb 18, 10:52 AM
    • 229 Posts
    • 208 Thanks
    Economic
    this is a great time for those who want to 'time the market' to come out of their closets.
    Originally posted by hutman
    Maybe give it a while longer?
    • A_T
    • By A_T 9th Feb 18, 10:55 AM
    • 396 Posts
    • 247 Thanks
    A_T
    this is a great time for those who want to 'time the market' to come out of their closets.
    Originally posted by hutman
    now is as good a time as any
    • Temrael
    • By Temrael 9th Feb 18, 11:16 AM
    • 347 Posts
    • 79 Thanks
    Temrael
    I'm not sure everyone should get too excited, this only just qualifies as a correction (a 10% fall from recent highs).

    As of right now this represents no more of a buying opportunity than September/October last year did (that's about the levels we are back to). If you weren't liquidating other assets and piling in to equities 4 or 5 months ago, why would you now?

    Wake me up when we are 40% down.
    Temrael

    Don't use a long word when a diminutive one will suffice.
    • economic
    • By economic 9th Feb 18, 11:59 AM
    • 2,932 Posts
    • 1,574 Thanks
    economic
    I'm not sure everyone should get too excited, this only just qualifies as a correction (a 10% fall from recent highs).

    As of right now this represents no more of a buying opportunity than September/October last year did (that's about the levels we are back to). If you weren't liquidating other assets and piling in to equities 4 or 5 months ago, why would you now?

    Wake me up when we are 40% down.
    Originally posted by Temrael
    This is exactly what i have been saying. Its just shocking to see how quick it has been thats all. Apart from that all it is is markets going back to levels seen in october.
    • BananaRepublic
    • By BananaRepublic 9th Feb 18, 12:11 PM
    • 1,191 Posts
    • 871 Thanks
    BananaRepublic
    Down Jones on 9th November 23,461.
    Dow Jones on 9th Feb 23,860.

    Ftse 100 on 1st December 7300.
    Ftse 100 0n 09th Feb 7142.

    Of course this could be the start of any correction; as could have happened a month ago, or will happen at a point in the future.

    Let's not let the facts get in the way of any internet based hysteria now, eh!
    Originally posted by mollycat
    Some people here do not understand what a correction is:

    https://www.investopedia.com/terms/c/correction.asp

    • BananaRepublic
    • By BananaRepublic 9th Feb 18, 12:14 PM
    • 1,191 Posts
    • 871 Thanks
    BananaRepublic
    now is as good a time as any
    Originally posted by A_T
    Are you sure? I suspect you have not been investing for long, less than 10 years anyway. This is at the moment no more than a wobble.
    • bowlhead99
    • By bowlhead99 9th Feb 18, 12:27 PM
    • 7,695 Posts
    • 14,075 Thanks
    bowlhead99
    Down Jones on 9th November 23,461.
    Dow Jones on 9th Feb 23,860.

    Ftse 100 on 1st December 7300.
    Ftse 100 0n 09th Feb 7142.

    Of course this could be the start of any correction; as could have happened a month ago, or will happen at a point in the future.

    Let's not let the facts get in the way of any internet based hysteria now, eh!
    Originally posted by mollycat
    Right, it is always worth putting movements into a longer term context, but it's quite factual that the market has corrected downwards since the euphoria around US tax cuts etc that came to a head subsequent to the 9 November or 1 December dates you picked. The FTSE hasn't dropped from 'just' 7300 but from almost 7800, in under a month.

    You could say "it's not really a correction just perhaps the start of a correction", or whatever else, but the reality is that is has pulled back from where it was and corrected to a level that the market feels a bit happier with than the previous heady heights.

    If you look at Bitcoin, one coin was about six thousand quid in November and it is still about six thousand quid now. But it would be pretty laughable to say to anyone in bitcoin circles that there hadn't been a recent extreme correction (given the price went to about £15k not long ago)

    With hindsight in a few years time we might be saying that today is a temporary and artificially wrong price and actually the price a few weeks ago was more correct. Who knows what we'll see in the meantime...
    • mollycat
    • By mollycat 9th Feb 18, 12:45 PM
    • 1,035 Posts
    • 2,052 Thanks
    mollycat
    Some people here do not understand what a correction is:

    https://www.investopedia.com/terms/c/correction.asp

    Originally posted by BananaRepublic
    Okay, technically a correction in US markets, with regard to FTSE 100 maybe you need to get your calculator out again

    Not seeking an argument, (with a total stranger on t'internet), puzzled by the enthusiasm of you "filling my SIPP" on the basis of markets being where they are just a few months ago, (post #194).

    As others have said, this is no big deal, (?yet).
    • Audaxer
    • By Audaxer 9th Feb 18, 12:56 PM
    • 1,019 Posts
    • 590 Thanks
    Audaxer
    You could say "it's not really a correction just perhaps the start of a correction", or whatever else, but the reality is that is has pulled back from where it was and corrected to a level that the market feels a bit happier with than the previous heady heights.
    Originally posted by bowlhead99
    Whether markets fall further or start to rise again soon, I assume markets will eventually get back to and surpass the previous highs, as over the long term markets should continue to rise. Is the reason for the correction just the fact that they had risen so fast over the last couple of years?
    • bowlhead99
    • By bowlhead99 9th Feb 18, 1:14 PM
    • 7,695 Posts
    • 14,075 Thanks
    bowlhead99
    Whether markets fall further or start to rise again soon, I assume markets will eventually get back to and surpass the previous highs, as over the long term markets should continue to rise.
    Originally posted by Audaxer
    That's always been the case in the past so no reason to think that capitalism is suddenly broken. The definition of 'long term' will of course vary from person to person.

    Is the reason for the correction just the fact that they had risen so fast over the last couple of years?
    It is as simple as, based on all current known, and projected, and unknown but anticipated events, and all the estimates of profits and growth and asset values at various future dates for a whole set of different businesses and industries, and the pricing of all the other alternative asset classes adjusted for risk (and people's appetite to save their money and defer investment or buy different types of things with their money, etc) the value of things in a particular market as determined by the weighted average way the money is currently deployed in the market, is now 'x".

    If last week or last month or last year, that value was some higher number: "y" , then the market price will need to correct downwards to get there.

    In any given hour, day, week, month, year, decade, there can be a lot of different triggers or catalysts for the prevailing market price to move to a different price. Certainly if a price has moved rapidly in one direction it is possible that it might move particularly rapidly in the opposite direction if investors determine a mistake had been made and the new consensus indicates there are some significant reasons why the price should only be X instead of Y. Generally when the market has figured out a price on which it's confident, it will try to get there as quickly as possible. Whereas if the market is not very confident that a price of "y" is wrong, it won't move very quickly towards "x".
    • BananaRepublic
    • By BananaRepublic 9th Feb 18, 1:32 PM
    • 1,191 Posts
    • 871 Thanks
    BananaRepublic
    Okay, technically a correction in US markets, with regard to FTSE 100 maybe you need to get your calculator out again

    Not seeking an argument, (with a total stranger on t'internet), puzzled by the enthusiasm of you "filling my SIPP" on the basis of markets being where they are just a few months ago, (post #194).

    As others have said, this is no big deal, (?yet).
    Originally posted by mollycat
    Without meaning to be confrontational - you're a perfectly polite person - several market indices are down by more than 10% including the Nikkei and the Hong Kong Hang Send, so we are certainly seeing a significant correction. You are of course correct about the FTSE 100, although only just. However, saying this this is only the start of a correction is, dare I say, and I don't mean to be a meany mean meany, not entirely accurate? Perhaps?

    Yes I have said several times that this is not yet a big deal, time will tell if this is a ripple or a tsunami.

    Regarding my SIPP contributions, I am putting large sums in to my SIPP each year to get back as much tax as possible, so for me a market dip is good news. Yes of course as the markets stand it's not a big deal, but it might be helpful, depending on how it pans out.
    • BananaRepublic
    • By BananaRepublic 9th Feb 18, 1:33 PM
    • 1,191 Posts
    • 871 Thanks
    BananaRepublic
    That's always been the case in the past so no reason to think that capitalism is suddenly broken. The definition of 'long term' will of course vary from person to person.



    It is as simple as, based on all current known, and projected, and unknown but anticipated events, and all the estimates of profits and growth and asset values at various future dates for a whole set of different businesses and industries, and the pricing of all the other alternative asset classes adjusted for risk (and people's appetite to save their money and defer investment or buy different types of things with their money, etc) the value of things in a particular market as determined by the weighted average way the money is currently deployed in the market, is now 'x".

    If last week or last month or last year, that value was some higher number: "y" , then the market price will need to correct downwards to get there.

    In any given hour, day, week, month, year, decade, there can be a lot of different triggers or catalysts for the prevailing market price to move to a different price. Certainly if a price has moved rapidly in one direction it is possible that it might move particularly rapidly in the opposite direction if investors determine a mistake had been made and the new consensus indicates there are some significant reasons why the price should only be X instead of Y. Generally when the market has figured out a price on which it's confident, it will try to get there as quickly as possible. Whereas if the market is not very confident that a price of "y" is wrong, it won't move very quickly towards "x".
    Originally posted by bowlhead99
    They are saying it is because of the expected interest rate rises. But a Google will find the views of the experts, I'm just a bystander.
    • bostonerimus
    • By bostonerimus 9th Feb 18, 1:44 PM
    • 1,686 Posts
    • 1,086 Thanks
    bostonerimus
    A 10% fall is generally defined as a correction, so the DOW is there now. There was massive selling by funds at the close yesterday which is being interpreted as 'capitulation'. I don't buy it. Economic fundamentals have to kick in soon and the level of US debt, QE, BREXIT, inflation, rising interest rates etc are going to mean bigger falls...........call me Dr Doom. So maybe that DB pension option is looking a bit more tempting today?
    Misanthrope in search of similar for mutual loathing
    • LHW99
    • By LHW99 9th Feb 18, 1:51 PM
    • 1,245 Posts
    • 1,139 Thanks
    LHW99
    Are you sure? I suspect you have not been investing for long, less than 10 years anyway. This is at the moment no more than a wobble.
    Originally posted by BananaRepublic
    Yes, I keep looking hopefully, but its not been enough of a drop to enthuse me about moving any of my relatively small cash balance yet. It may come, or not.
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