Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • 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 13
    • Glen Clark
    • By Glen Clark 9th Feb 18, 10:19 PM
    • 4,111 Posts
    • 3,139 Thanks
    Glen Clark
    Historical data about previous corrections may be interesting but I doubt if its relevant. This time it really is different, because we didn't have QE then - certainly not the current level of QE where good economic news has precipitated a fall in share prices because it might lead to QE being unwound.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • Thrugelmir
    • By Thrugelmir 9th Feb 18, 10:31 PM
    • 58,196 Posts
    • 51,567 Thanks
    Thrugelmir
    There will be many 10% drawbacks in any stock market portfolio, and several 20% or 30% crashes in a lifetime.
    Originally posted by bostonerimus
    In no one's previous lifetime has there been such a decade of financial stimulus. Simply to allow banks globally to maintain normality and provide the liquidity to unwind their balance sheets. In this sense "this time is different". As the impact of cold turkey has never been witnessed before. There's a generation that only have every seen stocks go up, never down. Perhaps investors chased the markets too high. Although interest rates were already rising. Bonds will become more attractive. Reducing the appeal of equities.

    Speed of change is much quicker than people expected. Which has created nervousness. Confidence waning impacts sentiment. People are herd animals by nature. Once the stampede starts then money head for the exits. Taking profits and looking for a safer home.
    Last edited by Thrugelmir; 09-02-2018 at 10:35 PM.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • srbenjo7
    • By srbenjo7 9th Feb 18, 11:05 PM
    • 6 Posts
    • 2 Thanks
    srbenjo7
    I know it's always difficult to call theses things... but how close to the bottom of the market are we? Does anyone think there are still significant falls to come in the stock market or is the worst over? The US market dipped agian today but recovered to finish up, most other markets fell.

    I feel we have another 5% max to go to the downside but the worst is over imo.
    Volatility is back though!
    Last edited by srbenjo7; 09-02-2018 at 11:15 PM.
    • Thrugelmir
    • By Thrugelmir 9th Feb 18, 11:15 PM
    • 58,196 Posts
    • 51,567 Thanks
    Thrugelmir

    I feel we have another 5% max to go to the downside but the worst is over imo
    Originally posted by srbenjo7
    That's comforting to know.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • srbenjo7
    • By srbenjo7 9th Feb 18, 11:17 PM
    • 6 Posts
    • 2 Thanks
    srbenjo7
    That's comforting to know.
    Originally posted by Thrugelmir
    Nobody knows anything!!
    • takesyourchances
    • By takesyourchances 9th Feb 18, 11:18 PM
    • 597 Posts
    • 357 Thanks
    takesyourchances
    To be honest who knows and what the next noise will be that wobbles them. I would not even concern myself over a 5% drop, who is going to remember a 5% drop next week in 10 years.

    As long as you have enough cash for your needs there is no point trying to time the markets, I am letting the markets do their thing while injecting cash as normal as my investments I plan to hold for a very long time.
    • aroominyork
    • By aroominyork 9th Feb 18, 11:19 PM
    • 423 Posts
    • 123 Thanks
    aroominyork
    Then I'll buy at -4.5% in case I'm having a cup of tea when it touches -5%.
    • srbenjo7
    • By srbenjo7 9th Feb 18, 11:26 PM
    • 6 Posts
    • 2 Thanks
    srbenjo7
    Then I'll buy at -4.5% in case I'm having a cup of tea when it touches -5%.
    Originally posted by aroominyork
    That's very British of you supping your cup of tea, lol!

    I have added some investments to my porfolio this week but was never tempted to sell, it's a long term thing for me, 15-20yrs.
    • Thrugelmir
    • By Thrugelmir 9th Feb 18, 11:40 PM
    • 58,196 Posts
    • 51,567 Thanks
    Thrugelmir
    To be honest who knows and what the next noise will be that wobbles them. I would not even concern myself over a 5% drop, who is going to remember a 5% drop next week in 10 years.
    Originally posted by takesyourchances
    Market corrections of 10% historically occur every 18 months. Though not normally at the speed seen in the past week. Computer trading and nervous investors account may account for this. As global markets are for once all highly aligned. The news is the public domain. Just a question of when and how fast. Like a game of pass the parcel will you have a chair when the music stops.

    Makes investing far more interesting again. With the opportunity to find value.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • takesyourchances
    • By takesyourchances 9th Feb 18, 11:54 PM
    • 597 Posts
    • 357 Thanks
    takesyourchances
    Market corrections of 10% historically occur every 18 months. Though not normally at the speed seen in the past week. Computer trading and nervous investors account may account for this. As global markets are for once all highly aligned. The news is the public domain. Just a question of when and how fast. Like a game of pass the parcel will you have a chair when the music stops.

    Makes investing far more interesting again. With the opportunity to find value.
    Originally posted by Thrugelmir
    I totally agree with you, it does make investing far more interesting again and the opportunity for some value in the dips. At the moment, I am investing weekly so I hope to catch some value along the way and have been adding during some of the recent dips.
    • cjv
    • By cjv 9th Feb 18, 11:57 PM
    • 199 Posts
    • 99 Thanks
    cjv
    I started investing back In May last year, only a modest amount around £7000 total currently. I am showing a small loss (on top of losing all my gains) overall, but I am continuing to invest my regular amounts and trying not to let the news encourage me into any knee jerk reactions.

    I may have a shot at a new Job this month, which will result in a large pay rise and bringing forward my plans to get on the property ladder.. from 4-5 years down to 1 year! I am thinking it will probably be sensible to move my Nutmeg LISA into a Skipton Cash LISA, if I get the job. I will find out over the next few weeks if I have new employment.

    That is my sensible head talking, the rebel in me wants to just continue to invest my house deposit, even if just for a year.
    • jamei305
    • By jamei305 10th Feb 18, 7:26 AM
    • 319 Posts
    • 379 Thanks
    jamei305
    In no one's previous lifetime has there been such a decade of financial stimulus. Simply to allow banks globally to maintain normality and provide the liquidity to unwind their balance sheets. In this sense "this time is different". As the impact of cold turkey has never been witnessed before. There's a generation that only have every seen stocks go up, never down. Perhaps investors chased the markets too high. Although interest rates were already rising. Bonds will become more attractive. Reducing the appeal of equities.

    Speed of change is much quicker than people expected. Which has created nervousness. Confidence waning impacts sentiment. People are herd animals by nature. Once the stampede starts then money head for the exits. Taking profits and looking for a safer home.
    Originally posted by Thrugelmir
    Every time is different. The financial crisis was the end of capitalism. In 2010 Greece was going to crash out of the Euro and lead to the currency falling apart. The dotcom bubble wasn't a bubble because the internet heralded a new order of things. The Asian financial crisis was the end of emerging markets. There was consensus among top economists that the brief 1987 crash now known as black Monday would lead to the worst depression since the 1930s.
    • Sea Shell
    • By Sea Shell 10th Feb 18, 7:50 AM
    • 675 Posts
    • 894 Thanks
    Sea Shell
    The main problem in times like these is that you MAY have been investing in the long term...but time waits for no man and now what was your long term, is now your short term, as you need the money sooner.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Glen Clark
    • By Glen Clark 10th Feb 18, 8:56 AM
    • 4,111 Posts
    • 3,139 Thanks
    Glen Clark
    Speed of change is much quicker than people expected.
    Originally posted by Thrugelmir
    Nothing much has changed yet except sentiment - they haven't unwound QE.
    They may never unwind QE in our lifetime because they have massive debts they won't want to pay more interest on. They would rather see their masive debts reduced by inflation first. So this could be just another 'Taper Tantrum' (false alarm.)
    But they might do so, and its this possibility that has spooked markets again.
    Last edited by Glen Clark; 10-02-2018 at 9:01 AM.
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
    • Thrugelmir
    • By Thrugelmir 10th Feb 18, 9:04 AM
    • 58,196 Posts
    • 51,567 Thanks
    Thrugelmir
    Every time is different.
    Originally posted by jamei305
    Nothing new in financial mismanagement. Eight centuries of history provides the backdrop.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • k6chris
    • By k6chris 10th Feb 18, 9:10 AM
    • 209 Posts
    • 360 Thanks
    k6chris
    Then I'll buy at -4.5% in case I'm having a cup of tea when it touches -5%.
    Originally posted by aroominyork
    There is an intersting psychology about buying pullbacks, namely that the price the S&P500 closed at on Friday is the same level you could have bought it less that 3 months ago on Dec 1st 2017. Then the price level was 'toppy' yet now people perceive it as 'value' because it was at higher price in between. It's the same thing as buying stuff at 20% off in the sales because your are 'saving'. The question should be, does the current price represent good value to meet my needs? Looking at Shiler PE ratio, which for the S&P500 is around 32 at the moment, the expected real returns over the next 10-15 years look to be somewhere between +/- 2%?

    https://static.seekingalpha.com/uploads/2016/7/7/47560766-14678846689217908_origin.jpg

    So not sure the current levels make a good buying opportunity based on this view of the world? Maybe a correction of 30-40% would make valuations look interesting for the long term?? I still think that with people seeing a 5-10% pull back as a buying opportunity is a sign that we still have a lot of market complacency? But, yes, if was that easy we would all be millionaires!!
    EatingSoup
    • Audaxer
    • By Audaxer 10th Feb 18, 9:36 AM
    • 1,019 Posts
    • 590 Thanks
    Audaxer
    So not sure the current levels make a good buying opportunity based on this view of the world? Maybe a correction of 30-40% would make valuations look interesting for the long term?? I still think that with people seeing a 5-10% pull back as a buying opportunity is a sign that we still have a lot of market complacency?
    Originally posted by k6chris
    It may be not a great buying opportunity, but it is still a better buying opportunity than it was just a few weeks ago.
    • Cash-Cows
    • By Cash-Cows 10th Feb 18, 9:38 AM
    • 197 Posts
    • 147 Thanks
    Cash-Cows
    My equity property tracker was hit hard although the drops started before this weeks general falls. They dropped to the point where I might need to consider a rebalance.
    • Thrugelmir
    • By Thrugelmir 10th Feb 18, 9:41 AM
    • 58,196 Posts
    • 51,567 Thanks
    Thrugelmir
    Then the price level was 'toppy' yet now people perceive it as 'value' because it was at higher price in between. It's the same thing as buying stuff at 20% off in the sales because your are 'saving'.
    Originally posted by k6chris
    When looking at markets in a broad sense. Then one is buying is buying the bad as well as the good. Without rhyme or reason. At least in the sales it's possible to find value in a single item. Once gone , the bargain no longer exists. Same applies to individual stocks. Buy it while it offers good value. Or somebody else will get there first.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Glen Clark
    • By Glen Clark 10th Feb 18, 10:21 AM
    • 4,111 Posts
    • 3,139 Thanks
    Glen Clark
    There is an intersting psychology about buying pullbacks, namely that the price the S&P500 closed at on Friday is the same level you could have bought it less that 3 months ago on Dec 1st 2017. Then the price level was 'toppy' yet now people perceive it as 'value' because it was at higher price in between. It's the same thing as buying stuff at 20% off in the sales because your are 'saving'. The question should be, does the current price represent good value to meet my needs? Looking at Shiler PE ratio, which for the S&P500 is around 32 at the moment, the expected real returns over the next 10-15 years look to be somewhere between +/- 2%?

    https://static.seekingalpha.com/uploads/2016/7/7/47560766-14678846689217908_origin.jpg

    So not sure the current levels make a good buying opportunity based on this view of the world? Maybe a correction of 30-40% would make valuations look interesting for the long term?? I still think that with people seeing a 5-10% pull back as a buying opportunity is a sign that we still have a lot of market complacency? But, yes, if was that easy we would all be millionaires!!
    Originally posted by k6chris
    In value terms, stocks are probably worth more than they were at their peak because they have since posted good results.
    The price has only fallen because investors have got the wind up about withdrawing QE - again.
    Rightly or wrongly most of my money is on them not withdrawing much QE anytime soon, because the major players are in too much debt to want a rise in interest rates. Its in their interest to keep interest rates below inflation, which is stopping me holding much cash.
    But who really knows?
    So of course I could be wrong
    “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

94Posts Today

1,501Users online

Martin's Twitter
  • RT @mmhpi: Third time lucky? After being delayed twice, tomorrow MPs are due to debate our #RecoverySpace proposals in parliament. @helen_u?

  • Just a quick note. I've been overwhelmed by the strength of support by my campaign to stop facebook fake ads today? https://t.co/KexhjVVznY

  • RT @mmhpi: On the eve of tomorrow's #RecoverySpace debate in parliament, we just delivered our 10,000 letters to the Chancellor. People in?

  • Follow Martin