# Stock market correction or bear market/crash? Either way I bailed.



## landlord

I only started studying the stock market at the start of this year. So would still most definitely consider myself a rookie. I invested a large lump sum at the start of August and lost just over 10% within three weeks and about 12% when I sold last week. (Mid sept 2015).
After a six year bull run I believed when I started investing in early August that the equities market had a year or two to go before it peaked and this may still be true. My goal was a 15 year long term investment.
It is said that the long-term investor should not try to time the market and sure, had I left my funds alone for 15 years I probably would have beaten deposit rates by a descent margin. But it just doesn't make sense to me to continue investing at the top or close to the top of a 6 year bull run, especially when there are so many negative indicators, both politically and economically. Stocks are massively overpriced and there currently seems to be tremendous economic instability. Statistical history suggests that this bull market may end fairly soon, so it seems logical to wait for better value.
I would hope within a year or two my original chosen funds would have dropped in value to a point below or significantly below what they are at now. (But who knows).
As for the timing of my exit, I did consider hanging in for a bit longer to at least try to recover my losses and at best pull out closer to the peak of the current bull run. (Greed?)
However after several restless nights concerned over when exactly that peak will be, I started to think to myself what would I do if the market suddenly dropped 5 or 10% in one day, well probably the same as most investors and consider the drop to be a temporary blip and wait for the rally the following day, potentially suffering an even greater loss if it's a genuine crash. After all the volatility in the markets in the last few weeks has frequently seen 2 to 3% falls and rises in the main indices in a single day. However I suspect a true crash would likely catch many including myself by surprise.

As Rory Gillen says in his book 3 steps to investment success (A great book I have to say), "Avoid letting volatility interrupt your savings or investment plan. I personally psychologically couldn't handle this volatility even though I had a 15 year long term investment plan. I suspect I would have handled it much better at the end of a 6 year bear run as opposed to the end of a 6 year bull run.
I am aware that I have possibly made a stupid rookie mistake and converted what may have been a temporary loss into a permanent loss. However perhaps I have saved a small fortune. Only time will tell. But either way I would prefer to bail out a year or two early then a day too late.


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## RobFer

It would be worth calculating out in the event of a crash being on the horizon how soon would the crash have to be in order for keeping money out of the market to make sense.


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## Fella

Landlord I'm suprised you bailed but understand why, it's hard for people that are not used to losing money to suddenly start investing and watch as they value of their investment declines. 

one thing I have learnt through years of gambling trading etc is that markets are generally efficient , this really helps me when I view my positions the markets will correct themselves if they are over priced or under priced , I never ever worry or entertain anything I hear or read about bull bears or prices . I buy very liquid efficient products that should produce a positive expected value over time , forget opinions most importantly your own . I constantly have to block out my own opinions when gambling trading and and follow my set rules and this is what makes money for me long term , I use the same tactics with stock market ,
Buy and hold high liquidity low spread low cost and don't sell or rebuy , the stock market could go any way this next few months short term nobody knows. 

Glad you posted if nothing else it will open a discussion on stocks and the mental side of investing .


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## Gordon Gekko

Sadly all that probably happened is you turning a temporary loss of capital into a permanent one.

The key in my view is to take on a level of risk that you're comfortable. Take a medium risk balanced portfolio. If markets fall by 40%, you'd expect your portfolio to fall by around half that. In such circumstances, you'd probably feel okay about things. The behavioural side is all about the volatility and your ability to withstand it.


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## Bronte

You shouldn't invest in shares.


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## Boyd

Sorry to hear that. What's your plan for the remaining 90%?
Those large drops is one reason I'm using DCA approach rather than lump lump sum approach. TBH id welcome a 20% drop, means I'll be buying at discount next month....


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## Brendan Burgess

landlord said:


> But it just doesn't make sense to me to continue investing at the top or close to the top of a 6 year bull run, especially when there are so many negative indicators, both politically and economically. Stocks are massively overpriced and there currently seems to be tremendous economic instability.





landlord said:


> I invested a large lump sum at the start of August and lost just over 10% within three weeks and about 12% when I sold last week.



It is extraordinary that you have concluded that stocks are massively overpriced, yet you invested anyway. 

How much of your net wealth did you invest?   While the likes of "Dollar Cost Averaging" appears to make sense, it's complete nonsense from a rational, financial point of view. 

However, it might allow you to sleep better by dipping your toe in the water. 

Brendan


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## landlord

Brendan Burgess said:


> It is extraordinary that you have concluded that stocks are massively overpriced, yet you invested anyway.
> Brendan



Brendan you have miss read my post.....
I did not start investing after realising stocks were massively over priced. 
I said in my original post.....
It just doesn't make sense to me to "CONTINUE INVESTING" when stocks were massively over priced.
It took a few weeks of investing, a crash in China and futher research to appreciate just how over priced stocks were/are.

Talk about kicking a man when he's down!!!!
I wrote this post with my hands up saying yes I have potentially made a mistake. I did mention at the start of this post that I considered myself a rookie stock market investor.


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## landlord

username123 said:


> Sorry to hear that. What's your plan for the remaining 90%?
> Those large drops is one reason I'm using DCA approach rather than lump lump sum approach. TBH id welcome a 20% drop, means I'll be buying at discount next month....



Hi U123
I have seen this megaphone graph (of the DOW JONES) now used by several economists to describe the next bear market or crash.

https://staticseekingalpha.a.ssl.fa...4418435388064744-Gregory-Mannarino_origin.png

No idea if it will come to fruition, but I will consider investing in smaller amounts (if only for peace of mind) on the down side of the next bear market. I am in no rush. Once bitten twice shy!!! so I am currently sleeping better with a strong cash position. (He says writing this at gone 1 in the morning ha ha).


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## Steven Barrett

Hi Landlord

It seems to me that you are trying to time the market. No one can time the market on a consistent basis. You may get lucky once or twice but that's all it is, luck.

If you have a 15 year investment horizon, you should stay with that view and not be looking at your portfolio on a daily basis. Once a year is enough. 

If the volatility of the stock market is too much for you, don't invest it all in equities. Spread your risk and look at the portfolio as a whole. 

Steven
www.bluewaterfp.ie


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## Brendan Burgess

landlord said:


> It took a few weeks of investing, a crash in China and futher research to appreciate just how over priced stocks were/are.
> 
> Talk about kicking a man when he's down!!!!



Hi landlord

My apologies. I didn't mean to kick you when you were down.  In fact, I admire you for admitting your mistakes. 

I am still confused though. You began studying the market at the start of the year. You waited until early August to invest.  Surely there must read other articles which suggested that the market was overvalued before you invested? 

I don't think you learned anything materially new about the market in those 6 weeks. You did learn something important about yourself, though. 

The big lesson is to invest a small amount of money early on in life and get used to wild gyrations of the stock-market.  I encourage young people, especially college students of business or finance who have some savings, to buy one share and watch how it rises and falls. That bring their academic studies to life. 

The way to long term wealth is by investing in shares for the longer term. A lot of people have been deprived of this wealth growing opportunity by sudden losses early in their investment career e.g. eircom investors. You should not let your loss put you off. 

Brendan


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## Boyd

Brendan Burgess said:


> It is extraordinary that you have concluded that stocks are massively overpriced, yet you invested anyway.
> 
> How much of your net wealth did you invest?   While the likes of "Dollar Cost Averaging" appears to make sense, it's complete nonsense from a rational, financial point of view.
> 
> However, it might allow you to sleep better by dipping your toe in the water.
> 
> Brendan


Hi Brendan,
Could you elaborate a little on your opinion about DCA above? Do you think it's nonsense due to fees, time taken to invest the lump sum or otherwise?
Thanks


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## Fella

Landlord you should watch some Warren Buffet he speaks a lot of sense when it comes to the stockmarket. He says if you buy a house or Farm you don't get it valued everyday , so don't go checking the value of your investments everyday, just check now and in 15 years ,everything inbetween doesnt matter! 
You'll just drive yourself mad checking, I automate it as best possible , to avoid charges I have to invest every 90 days with saxobank , so I have reminders by email to buy xxxx at 90 days from last purchase , don't care what price I buy at its an open market so i'm likely getting par value (-fees and spread) .


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## RobFer

I am trying to avoid market timing like a lot of new investors but I have to stay when one sees a respected stock like Volkswagen massively drop in price its so tempting to try to step in and grab a bargain.  I have never felt the same when a stock I hold drops in price but maybe its due to the fact that I have a pretty small portfolio. Perhaps that is is an major advantage of starting small.


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## Sarenco

Hi Landlord

I think Brendan is absolutely right when he says that you have learned something about yourself from this experience - you have learned that you actually have a very low risk tolerance. 

History tells us to expect a stock market correction of 10%+ roughly every 12 months on average.  If a 10% drawdown is causing you to lose sleep, then it seems obvious to me that you are not a good candidate for having a significant proportion of your liquid assets invested in equities while carrying large amounts of property-related debt.

By bailing out at the first sign of trouble you have crystallised a permanent, irrecoverable loss but in the long run it may prove to be a small cost to pay for this valuable lesson regarding your own psychology.

When you say that equities are over-priced, I would make the point that all valuations are relative.  Are stocks over-priced relative to bank deposits, bonds, real estate, gold?  Staying in cash while waiting for stocks to become "cheap" is market timing, pure and simple.

Fair play to you for reporting back to us and do let us know once you decide your next move.


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## galway_blow_in

SBarrett said:


> Hi Landlord
> 
> It seems to me that you are trying to time the market. No one can time the market on a consistent basis. You may get lucky once or twice but that's all it is, luck.
> 
> If you have a 15 year investment horizon, you should stay with that view and not be looking at your portfolio on a daily basis. Once a year is enough.
> 
> If the volatility of the stock market is too much for you, don't invest it all in equities. Spread your risk and look at the portfolio as a whole.
> 
> Steven
> www.bluewaterfp.ie




timing is the key difference between great investors and the majority , there are thousands of great companies out there , getting them at the right price is the trick , take VW , its still a great company but anyone who bought last week or worse three months ago , has made a horrible call 

OP , perhaps you might be better investing a small amount every month on an ongoing basis , that way over the long term you are going to be buying at a decent average , you might also find it easier to ignore price movement , say someone began such an approach in the year 1999 and maintained that system to this day , they would have bought when stocks were very expensive in 1999 , saw a severe drop from 2000 - the end of 2002 , then a very strong run up from 2003 - 2007 , then the mother of all bear markets from that top to early 2009 , only to see one of the largest ever bull markets since early 2009 , overall they would be doing fine since 1999 

some might try and incorporate such an investment plan into a tax efficient pension plan

to summarise , it sounds like you went in with a lump sum at a bad time 

could be worse , 10% is not enormous , how do you think someone who bought VW shares at 260 euro in march feels ? ( not me by the way , i just noticed today the stock was at that price only six months ago )


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## galway_blow_in

RobFer said:


> I am trying to avoid market timing like a lot of new investors but I have to stay when one sees a respected stock like Volkswagen massively drop in price its so tempting to try to step in and grab a bargain.  I have never felt the same when a stock I hold drops in price but maybe its due to the fact that I have a pretty small portfolio. Perhaps that is is an major advantage of starting small.




VW is being massively shorted right now , the kind of fall we have seen in the companies share price since yesterday only happens to penny stocks ( which are scams to begin with and are hyper volatile ) and with once in a generation global market crashes like in 1929 , 1987 or 2008 

VW could continue to fall for another few weeks or months before it bottoms but a stock doesnt fall 40% plus in two days without manipulation


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## Brendan Burgess

username123 said:


> Could you elaborate a little on your opinion about DCA above? Do you think it's nonsense due to fees, time taken to invest the lump sum or otherwise?



Hi username

I believed it myself until a few years ago when someone on askaboutmoney pointed out the nonsense that it is.

Loads of articles online to show that it's complete bunkum. 
 This is a fairly good one:  

*Myths and Fallacies of Dollar Cost Averaging*

http://ddnum.com/articles/dollarcostaveraging.php

http://ddnum.com/articles/dollarcostaveraging.php


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## Sarenco

Dollar cost averaging is just market timing by another name.  

By having less assets "on risk" for longer, your risk of suffering a loss is obviously lower but, critically, so is your expected return.  

There is a consistent and immutable link between investment risk and expected return and nobody can consistently time the market.


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## Jim2007

landlord said:


> It just doesn't make sense to me to "CONTINUE INVESTING" when stocks were massively over priced.



And what calculations did you use to arrive at the conclusion?  Because a quick look at some average P/E ratios would suggest reasonable prices rather than 'massively over priced' as you seem to think.


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## Boyd

Brendan Burgess said:


> Hi username
> 
> I believed it myself until a few years ago when someone on askaboutmoney pointed out the nonsense that it is.
> 
> Loads of articles online to show that it's complete bunkum.
> This is a fairly good one:
> 
> *Myths and Fallacies of Dollar Cost Averaging*



Interesting they split discussion into DCA (where you have option to lump sum or average in) and regular investing (where you are investing monthly from salary with no lump sum). I am planning on doing both.

I have a lump sum and want to invest. While not trying to time the market, I am conscious of investing in one go (first time investor) on the back of a 6 year bull run. I like the slight piece of mind DCA gives in this regard (be it real or not!). I'm happy to accept lower returns versus lump sum if it helps me sleep easier until the lump sum is in the market and forgotten about!

Once lump sum is invested, I plan on doing regular investing from salary (pension contributions already maxed)


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## Brendan Burgess

If you think that the market is overvalued, then you should not really invest 100% of your lump sum, or 1% of your lump sum. 

If you are investing for the first time, then you should probably invest an amount, which if it falls, won't cause you to lose sleep. As of now, you have no idea what that amount is.  I would say invest around 5% of your total assets in one go. If they fall by 50% the following day, you will have lost 2.5% of your wealth.  

You should not invest again for a few months until you feel comfortable with the idea. 

Brendan


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## Boyd

Funnily enough I'm at exactly that stage... I've invested 5% of the lump sum. It's down 5%. I haven't lost any sleep so far.


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## monagt

Jim2007 said:


> Because a quick look at some average P/E ratios would suggest reasonable prices rather than 'massively over priced' as you seem to think.



Where in Europe, UK or USA?  Commodities?


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## joe sod

I dont see where the massive overvaluation is, maybe some of the US tech companies were. Its not 2000 or even 2008. I think there is alot of fear with the Chinese shenanigans before that the Greek crisis and now the refugee crisis. I think the political instability is the backround to the big stock market swings. Also the there is much more money now trading in the markets and exagerating the volatility. I think 20 years ago you would not have seen such big daily movements and you probably would not have been able to view them minute by minute.


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## Steven Barrett

galway_blow_in said:


> timing is the key difference between great investors and the majority , there are thousands of great companies out there , getting them at the right price is the trick , take VW , its still a great company but anyone who bought last week or worse three months ago , has made a horrible call



Who can get the timing right all the time. Warren Buffet, the greatest investor there has been doesn't engage in it. 

VW is a great example of luck...or bad luck. They could have looked like a great value stock but who was to know they were rigging the diesel tests on their cars? There's no timing in that, it's illegal activity. 


Steven
www.bluewaterfp.ie


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## Fella

I really don't understand why all these people you read that say the stock market is over valued don't just short sell the stock market and after the crash they can buy back at a fair price and make a killing. The stock market is there for buyers and sellers. The weight of money will decide the price of VW and other stocks , my guess would be it is not value to buy it now and it was not a bad buy last week , it's going to incur a significant loss now so the weight of money has valued it now at a fair price. 
VW stock price might come back to what it was within a year or so (nobody knows) but people will probably say it was great value after it lost 40% and everyone should of bought it , but I be more inclined to think its now a high risk stock likely to be volatile if you buy it your taking on a risky asset  so rewards but also losses should be greater.


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## landlord

Sarenco said:


> Hi Landlord
> I think Brendan is absolutely right when he says that you have learned something about yourself from this experience - you have learned that you actually have a very low risk tolerance.



Agreed!



Brendan Burgess said:


> Hi landlord
> I don't think you learned anything materially new about the market in those 6 weeks. You did learn something important about yourself, though.Brendan



One of the areas I researched over that 6 weeks was the potential collapse of the dollar. The change from the "Gold standard" to the "Dollar standard" by Nixon in 1971 and how that had un-pegged the dollar from gold. All other Fiat currencies are now pegged to the dollar and as they are printed again and again and again, they are gradually floating further and further away from gold. QE 1, QE2, QE3....where will it end.....
I watched a enlightening set of videos from Michael Maloney on the hidden secrets of money. There are 5 episodes....
https://www.youtube.com/watch?v=DyV0OfU3-FU
Before anyone criticizes......please watch the videos. Perhaps this is all Doomsday stuff, but if nothing else its a fantastic monetary history lesson. Much of what Michael says made sense to me anyway and yes the potential of a general currency collapse was a consideration in my decision making. Perhaps some of you more experienced investors can explain if his theory's are fact or fiction.


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## galway_blow_in

joe sod said:


> I dont see where the massive overvaluation is, maybe some of the US tech companies were. Its not 2000 or even 2008. I think there is alot of fear with the Chinese shenanigans before that the Greek crisis and now the refugee crisis. I think the political instability is the backround to the big stock market swings. Also the there is much more money now trading in the markets and exagerating the volatility. I think 20 years ago you would not have seen such big daily movements and you probably would not have been able to view them minute by minute.



long term PE average for the likes of the S+P is 15 , we are a good bit above that , plus the longer a bull market lasts , the less time it has to run , we are currently in the third longest ever


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## galway_blow_in

SBarrett said:


> Who can get the timing right all the time. Warren Buffet, the greatest investor there has been doesn't engage in it.
> 
> VW is a great example of luck...or bad luck. They could have looked like a great value stock but who was to know they were rigging the diesel tests on their cars? There's no timing in that, it's illegal activity.
> 
> 
> Steven
> www.bluewaterfp.ie



VW is an extreme example but great investors can spot trends which are outside the basic rules of thumb when it comes to valuations ( PE , BV , PEG ) , its how full time traders are able to make a living , they sell great companies with tremendous growth prospects all the time , they would have sold apple @ $134 earlier this year and bought it back in the mid nineties august 24 th ( the day markets had a ten minute huge dip )

in the short term , the markets are rigged and regular people cannot make money due to stocks being shorted etc , take bank of ireland , its currently around 14% below where it was at peak in early summer , this despite a great set of results a few months ago and the irish economy going from strength to strength , an average investor might have bought it @ 38 cents in jun , a good investor would have waited for a pull back to where it is now 

if you have enough patience ( ten years plus ) , everyone will do fine in the markets but the key to real riches is timing 

as for buffet , he doesnt always practice what he preaches , he espouses buying low cost index funds yet made his billions targeting specific individual companies , buffet is a once off


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## galway_blow_in

Fella said:


> I really don't understand why all these people you read that say the stock market is over valued don't just short sell the stock market and after the crash they can buy back at a fair price and make a killing. The stock market is there for buyers and sellers. The weight of money will decide the price of VW and other stocks , my guess would be it is not value to buy it now and it was not a bad buy last week , it's going to incur a significant loss now so the weight of money has valued it now at a fair price.
> VW stock price might come back to what it was within a year or so (nobody knows) but people will probably say it was great value after it lost 40% and everyone should of bought it , but I be more inclined to think its now a high risk stock likely to be volatile if you buy it your taking on a risky asset  so rewards but also losses should be greater.



the real money is buying stocks when they sell off in a major way , no different to property in dublin circa 2011 , by the time VW has done its penance and paid its fine , the stock will have long recovered from where it bottomed , its too late to buy when the bad news is out of the way

those who are highly risk averse shouldnt buy stocks like this but VW is a blue chip company , should be a great buy by the end of this month as all the bleeding will likely be over , will take a year to get back to where it was last week however and several to make all time highs , amazing considering those all time highs were made in march of this year


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## demoivre

If you are diversified across asset classes and within asset classes then short term fluctuations should make little difference to any investor.


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## joe sod

galway_blow_in said:


> VW is an extreme example but great investors can spot trends which are outside the basic rules of thumb when it comes to valuations ( PE , BV , PEG ) , its how full time traders are able to make a living , they sell great companies with tremendous growth prospects all the time , they would have sold apple @ $134 earlier this year and bought it back in the mid nineties august 24 th ( the day markets had a ten minute huge dip )
> 
> in the short term , the markets are rigged and regular people cannot make money due to stocks being shorted etc , take bank of ireland , its currently around 14% below where it was at peak in early summer , this despite a great set of results a few months ago and the irish economy going from strength to strength , an average investor might have bought it @ 38 cents in jun , a good investor would have waited for a pull back to where it is now
> 
> if you have enough patience ( ten years plus ) , everyone will do fine



Therefore the average investor should just ignore all the drama then. I read that the huge sell off on August 24 where the dow dropped 1000 points within minutes of opening was caused by computers all doing the same thing, basically they were all programmed to sell when the market opened, computers dont go drinking at the weekend so none of them knew that they were all going to do the same thing monday morning. This software was created by smart people but they all ended up doing the same thing like a herd jumping off a cliff.


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## galway_blow_in

joe sod said:


> Therefore the average investor should just ignore all the drama then. I read that the huge sell off on August 24 where the dow dropped 1000 points within minutes of opening was caused by computers all doing the same thing, basically they were all programmed to sell when the market opened, computers dont go drinking at the weekend so none of them knew that they were all going to do the same thing monday morning. This software was created by smart people but they all ended up doing the same thing like a herd jumping off a cliff.



during a stampede of selling like happened august 24th , many big institutions will have been shorting the market like hell , only to then buy back with the same vigour


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## Sarenco

galway_blow_in said:


> during a stampede of selling like happened august 24th , many big institutions will have been shorting the market like hell , only to then buy back with the same vigour



So, the take away is simply that retail investors should only invest for the long term and ignore the noise in the intervening period.  Market timing is a fool's game.


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## Jim2007

galway_blow_in said:


> during a stampede of selling like happened august 24th , many big institutions will have been shorting the market like hell , only to then buy back with the same vigour



Which institutions would those be and how are they 'shorting the market'?


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## cremeegg

SBarrett said:


> Who can get the timing right all the time. Warren Buffet, the greatest investor there has been doesn't engage in it.
> Steven
> www.bluewaterfp.ie



I think this shows a fundamental misunderstanding of Buffett's approach. 

His most enduring maxim is "buy great companies at a good price". Trying to buy a company when the price is good is what timing is all about.


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## galway_blow_in

Sarenco said:


> So, the take away is simply that retail investors should only invest for the long term and ignore the noise in the intervening period.  Market timing is a fool's game.



its ha


Jim2007 said:


> Which institutions would those be and how are they 'shorting the market'?



how would i know which institutions specifically are shorting the market but institutions dictate the movement of the market ( not retail )

take your pick , morgan stanley , goldman sachs , jp morgan , barclays , each  employ thousands of people , do you think none are employed to go short on certain securities ?

bill ackman has made much of his fortune shorting certain companies


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## landlord

Guys one of the reasons I bailed was I correctly/incorrectly? came to the conclusion that this blip might turn out to be more than just a correction. I know most on here would disagree, however if one did have a bearish view on the stock market would gold be the way to go? I have specifically been looking over the last couple of weeks at investing a SMALL amount into a gold royalty company like Royal Gold RGLD or a gold mining company like Goldcorp GO5.DE or possibly the SPDR gold ETF ......GLD.  I have even also been considering physical gold, but you seem to have to pay a 5% premium on buying and then on selling. Anyone any experience with gold?


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## Sarenco

To quote Mr Buffett:

_"Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head"._

_"What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As 'bandwagon' investors join any party, they create their own truth - for a while."_

My advice is to steer clear of gold bugs at all times - they are simply fear merchants.  Anyway, this chart should give you some sense of the long term performance of various asset classes.

_



_


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## KOW

landlord said:


> Guys one of the reasons I bailed was I correctly/incorrectly? came to the conclusion that this blip might turn out to be more than just a correction. I know most on here would disagree, however if one did have a bearish view on the stock market would gold be the way to go? I have specifically been looking over the last couple of weeks at investing a SMALL amount into a gold royalty company like Royal Gold RGLD or a gold mining company like Goldcorp GO5.DE or possibly the SPDR gold ETF ......GLD.  I have even also been considering physical gold, but you seem to have to pay a 5% premium on buying and then on selling. Anyone any experience with gold?



Landlord,
            Would you not end up repeating the process that you have just been through. Gold goes up and down. Chill out and be honest with yourself regarding your attitude to risk.


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## Sarenco

galway_blow_in said:


> its ha



Sorry?


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## galway_blow_in

Sarenco said:


> Sorry?



typo

sorry


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## Sarenco

No problem.  Do you agree with the sentiment?


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## galway_blow_in

landlord said:


> Guys one of the reasons I bailed was I correctly/incorrectly? came to the conclusion that this blip might turn out to be more than just a correction. I know most on here would disagree, however if one did have a bearish view on the stock market would gold be the way to go? I have specifically been looking over the last couple of weeks at investing a SMALL amount into a gold royalty company like Royal Gold RGLD or a gold mining company like Goldcorp GO5.DE or possibly the SPDR gold ETF ......GLD.  I have even also been considering physical gold, but you seem to have to pay a 5% premium on buying and then on selling. Anyone any experience with gold?



gold is a far riskier buy than equities , it also pays no income , gold has no intrinsic value whatsoever 

maybe you just invested too much , the markets trend is not up in the short term right now , technically its pretty horrible on nearly every index


a good way to manage risk is to use your age as an investment guide , if someone is twenty five years old , they invest 25% in bonds and 75% in equities , if someone is forty , they invest 40% in bonds and 60% in equities


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## galway_blow_in

Sarenco said:


> No problem.  Do you agree with the sentiment?



yes , if your investing a set amount every month or year over decades 

you wont make a fortune or anything close to it however , you would probably do as well investing a lump sum in a house today , provided its in a reasonably good location , it is likely to be worth more in twenty years , just like equities 

not everyone can afford a house of course but for lump sum investors , its a less risky asset in my opinion ( if you have to borrow to buy a house , thats a different matter )


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## Sarenco

Of course, the safest investment of all is simply to pay down debt - totally free of commissions, fees and taxes with a guaranteed rate of return equivalent to the interest that would otherwise have to be paid on the loan.


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## Jim2007

galway_blow_in said:


> its ha
> how would i know which institutions specifically are shorting the market but institutions dictate the movement of the market ( not retail )
> 
> take your pick , morgan stanley , goldman sachs , jp morgan , barclays , each  employ thousands of people , do you think none are employed to go short on certain securities ?
> 
> bill ackman has made much of his fortune shorting certain companies



Exactly, so here is the thing, the financial institutions are not heavily involved in shorting as you seem to think, simply because most of them are not allowed to do.  Take for instance the insurance companies - they are almost always restricted to bonds and equities.  Then there are the pension funds, who while being allowed to hold more equities than insurance companies are still restricted when it comes to shorting as well.  And as for the asset managers you mentioned, they are for the most part exactly that, they do very little trading on their own account - if you take the time to read over their financial statements for say the last 5 years you will see very little profits coming from trading on their own account.  Which leaves the funds and while may funds are allowed to leverage their holdings, very few except the hedge funds are allowed to undertake shorting on the scale you are suggesting.  You mentioned Bill Ackman, who is of course a hedge fund manager of sorts, so no surprises there either.

When it comes to shorting, you short equities - not the market.  And for a big fund or institution it is a very risky exercise because you need an incredible short to make it worth your while and there is always the danger of a short squeeze as for example in the case of VW back in 2008 or Corn in 2010.  Which is exactly why most institutions do very limited shorting if at all.

Furthermore, if shorting was as rampant as you suggest, then one would expect to see large blocks of shorted equities being bought by there institutions on a major down turn and this is not the case, in fact if you look at the order books most often you will see the opposite, as fund managers try to dump a dog before they have to report to the fundholders.  So yes of course shorting can and does impact certain equities from time to time, it is not nearly as rampant as you would have us believe.


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## landlord

DCD said:


> Landlord,
> Would you not end up repeating the process that you have just been through. Gold goes up and down. Chill out and be honest with yourself regarding your attitude to risk.



Possibly/probably. To be honest I don't think I am ready to invest in anything at the moment, but I am enjoying exploring options if only to track the upward learning curve.
I have to admit I am feeling quite satisfied with myself knowing that my original chosen funds have dropped by another 5 ish% in the last few days. I am fully aware of course that that could completely reverse by next week.
It's probably not appropriate to talk about a game of gambling, but for those who have played Texas Holdum poker.........I feel like I am prepared to go "All in" again at some stage but not till I have a better hand. For those that never bet (invest), there stake will eventually get eaten away on the "blinds" (or inflation!!)


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## galway_blow_in

landlord said:


> Possibly/probably. To be honest I don't think I am ready to invest in anything at the moment, but I am enjoying exploring options if only to track the upward learning curve.
> I have to admit I am feeling quite satisfied with myself knowing that my original chosen funds have dropped by another 5 ish% in the last few days. I am fully aware of course that that could completely reverse by next week.
> It's probably not appropriate to talk about a game of gambling, but for those who have played Texas Holdum poker.........I feel like I am prepared to go "All in" again at some stage but not till I have a better hand. For those that never bet (invest), there stake will eventually get eaten away on the "blinds" (or inflation!!)



you really didnt loose that much , 10% isnt a huge scalp at a time like this, the s+p alone is down not far off that this year 

did you buy individual stocks or a broad market etf


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## joe sod

"maybe you just invested too much , the markets trend is not up in the short term right now , technically its pretty horrible on nearly every index"

so is technical analysis a self fulfilling prophesy, for example if  event x happens then the market should do y, therefore market participants do y because the prophecy says thats whats supposed to happen. Then you have all these computers programmed to do y if x happens.


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## landlord

galway_blow_in said:


> you really didnt loose that much , 10% isnt a huge scalp at a time like this, the s+p alone is down not far off that this year
> 
> did you buy individual stocks or a broad market etf



This was my portfolio, 4 EU UCITS ETFs and 2 US stocks......


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## landlord

My Big Bang theory......

(I actually went to the same school as Stephen Hawking.....but you would never know it from my grades ha ha)

Firstly I have absolutely no background in economics or business and until the start of this year new nothing about the stock market.
I guess the consensus of opinion on this thread is that you cannot time the stock market.  But I wonder if timing the stock market on a macro time scale is becoming more predictable. Take the "doomsday" chart below for example.......






The dot com bubble in 2000, (8 years later) the credit/housing bubble in 2008 and (8 years later approaching 2016) the debt bubble.
I guess I'm saying if the markets were left alone to their own devices the volatility would be much reduced and the trends would be flatter and more linear.
However Markets are massively interfered with.
At a national level are own government interfered with the housing market for years, with property incentives, Section23, allowing banks to lend at 5 times ones salary, 0% deposit mortgages etc. This contributed to the property price bubble in Ireland before the crash in 2008
This interference is now happening more and more on a global scale with the ECB and FED...Quantitive easing 1, 2 and 3 has pumped trillions into the economy, I believe artificially inflating the markets. I keep asking myself where is all this new currency coming from and where is it going? Is it not just adding to the already huge global debt burden? Any time this century there has been any economic downturn the solution always seems to be "ah sure we will just print more money" and simply borrow our way out of the problem.
It's almost like the "Double or Quits game", where every time there is an economic downturn (I.e. Loosing a game) governments just double the amount of money they print until they win!!! And we all know how that game ends!!! Could potentially monetary policy over the last few years not just be contributing to this boom and bust cycle but amplifying it.
Timing the stock market on a micro scale as in minutes, hours or even weeks to me does sound ridiculous, but I would like to place my head above the parapet and suggest that due to global government policy (interference), inflating the bubble and using statistical trends, that there may very well be a downward turn in the economy within the next couple of years. I'm not saying that megaphone chart above is going to be 100% accurate, but I would like to think for me it could be used as a rough guide as to when to re-enter the stock market.


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## RobFer

One might argue that there is always some undervalued market. So why not invest in one now. Russia and Greece are cheap. But most stay away as there are compelling arguments against it. Yet there are always reasons to stay out of the markets. One might wait for next bear but I think its a very hard strategy to stick to in the long term.


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## joe sod

If you are worried about quantitive easing and central banks creating money surely then the riskiest asset to hold is cash. Surely in that scenario despite the market shenanigans it is better to hold shares in real companies. Im no expert Ive been invested in all the wrong sectors this time oil and commodities. Despite the money printing assets like these are falling rather than rising as if we are in a deflationary rising interest rate environment. I think there is more of a herd like movement in markets now than ever before. The natural ebb and flow of the markets is being exagerrated by computer trading so the markets seem to be moving more in sync rather than randomly. I think the gyrations in the oil price are almost divorced from the actual real life supply/ demand situation.


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## landlord

joe sod said:


> If you are worried about quantitive easing and central banks creating money surely then the riskiest asset to hold is cash. Surely in that scenario despite the market shenanigans it is better to hold shares in real companies. Im no expert Ive been invested in all the wrong sectors this time oil and commodities. Despite the money printing assets like these are falling rather than rising as if we are in a deflationary rising interest rate environment. I think there is more of a herd like movement in markets now than ever before. The natural ebb and flow of the markets is being exagerrated by computer trading so the markets seem to be moving more in sync rather than randomly. I think the gyrations in the oil price are almost divorced from the actual real life supply/ demand situation.



Thanks Joe, yep I am looking at gold and other asset classes that might hold their value in a downturn.  But it's inflation and potentially hyper inflation that I am concerned about. Seems crazy to suggest that when the FED seem unable to stimulate inflation. All this money being printed is not spurring inflation, so I guess it's just being given to the banks who aren't lending it out.


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## Steven Barrett

landlord said:


> Possibly/probably. To be honest I don't think I am ready to invest in anything at the moment, but I am enjoying exploring options if only to track the upward learning curve.
> *I have to admit I am feeling quite satisfied with myself knowing that my original chosen funds have dropped by another 5 ish% in the last few days.* I am fully aware of course that that could completely reverse by next week.
> It's probably not appropriate to talk about a game of gambling, but for those who have played Texas Holdum poker.........I feel like I am prepared to go "All in" again at some stage but not till I have a better hand. For those that never bet (invest), there stake will eventually get eaten away on the "blinds" (or inflation!!)




Those who look at their portfolio once a month see it below their initial investment 2/3 of the time. Those who look at the same portfolio once a year see it in profit 2/3 of the time. 

One of your biggest problems landlord, is that you are looking at the funds all the time. You're even looking at them now to justify to yourself that you made the right decision. You had a 15 year investment period. Looking at the portfolio once a year is enough. 

Steven
www.bluewaterfp.ie


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## landlord

SBarrett said:


> Those who look at their portfolio once a month see it below their initial investment 2/3 of the time. Those who look at the same portfolio once a year see it in profit 2/3 of the time.
> 
> One of your biggest problems landlord, is that you are looking at the funds all the time. You're even looking at them now to justify to yourself that you made the right decision. You had a 15 year investment period. Looking at the portfolio once a year is enough.
> 
> Steven
> www.bluewaterfp.ie



Agreed!!
In fact my biggest downfall was downloading those stock tracking apps for the iPhone.   If there is a next time they will be deleted from my phone.


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## landlord

Sarenco said:


> To quote Mr Buffett:
> 
> _"Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head"._
> 
> _"What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As 'bandwagon' investors join any party, they create their own truth - for a while."_
> 
> My advice is to steer clear of gold bugs at all times - they are simply fear merchants.  Anyway, this chart should give you some sense of the long term performance of various asset classes.
> 
> _
> 
> 
> _



Sarenco,  your chart which you used to highlight the lack of any real return from gold over the last 200 years actually demonstrates very well what I was concerned about in an earlier post.  In 1971 President Nixon took the dollar off the gold standard and changed it to the dollar stand.   As can be seen from your chart,  from approximately 1971 ( due to deficit spending) the dollar has  massively devalued which has had a significant impact on the price of gold (up and down).  Yes the true value of gold is generally only realised when there is fear in the market, but with another potential round of quantitive easing on the way,  I believe the continuous devaluation of worldwide currencies and the huge worldwide debt is going to ignite the next gold rush!! 
I read about Glencore last week before it crashed and the potential domino effect from its fall.  I am now reading about the huge impending derivative (particularly  Deutsche bank) and bond market crash.  I have to admit I don't fully understand everything I'm reading as I have no background in economics.  However the implications for the markets seem incredible.


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## Sarenco

Well, all I'll say is that equities always have to climb a wall of worry - there is no particular reason to believe that this time is different.

You could (and I would) argue that bearishness on financial markets is particularly elevated at the moment (there have been massive outflows from equity funds and ETFs in recent weeks), which is itself a contrarian buy signal.

Successful long-term investing is largely about managing your own fears.  If holding a small pile of gold coins helps you invest in productive assets, then fire ahead.

To me gold, is nothing more than a useless, shiny rock.  I'll pass.


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## Sarenco

Incidentally, if you are genuinely concerned about an imminent bout of hyper-inflation, then you should brace yourself for a corresponding uptick in interest rates.  I recall from a previous thread that you have significant property-related debt and I would suggest that this is where you should really be directing your fears.


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## joe sod

Sarenco said:


> Well, all I'll say is that equities always have to climb a wall of worry - there is no particular reason to believe that this time is different.
> 
> You could (and I would) argue that bearishness on financial markets is particularly elevated at the moment (there have been massive outflows from equity funds and ETFs in recent weeks), which is itself a contrarian buy signal.
> 
> Successful long-term investing is largely about managing your own fears.  If holding a small pile of gold coins helps you invest in productive assets, then fire ahead.
> 
> To me gold, is nothing more than a useless, shiny rock.  I'll pass.



As far as i can see the only real worrying thing that happened in the last few months was the chinese market shocks. But there has been huge outflows of money from emerging markets, commodities, now european markets because of VW. It seems that any small thing is causing markets to move hugely way more than you would logically calculate the effect of each bit of news. It seems that there is hypersensitivity so a small move causes a cascade of momentum trading. But when you look at it there was no reason for it. I think it is impossible for the average investor to decipher anything from it. The whole of august we were told that the markets were worried about the fed raising interest rates in september so markets fell because of this. Then when interest rates did not rise there was a big drop because they did not rise, now they are falling because they are worried of interest rate rise in december. Therefore there is no real logic to it


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## Fella

There's probably always going to be good reasons not to invest , I really don't think it's worth reading too much , if you google it you will get thousands of result and arguments on why the stock market will crash now or rise now. That's because nobody knows for sure. 

I just look at the facts of what we know for sure , the stock market has proven to be one of the better places to keep your cash , this is because companies make profit and pay dividends they increase prices so you don't lose out to inflation , I don't give any time to megaphone charts,  humans are terrible decision makers and look for patterns , I've read some good books on why we suck at decisions " thinking fast and slow " and some other book "fooled by randomness " I think it was called .
I don't think the majority of people are cut out for investing as I think dealing with losses and losing money is a skill in itself , as I say humans are terrible at these things and have an obsession with charts and looking for patterns , I see it in gambling , people are fooled by random events , 10 reds  in a row on roulette get on black next , the mega phone chart is perfect for human mind as it's simple they can see clearly oh yeah this is going down now , the stock market crashed 8 years ago and another 8 years and another 8 years these are all random events , it's hard but block out the chart from your mind , I personally don't view charts of anything I but I don't care what price it was last month or last year or 5 years ago , I find it easy to let others decide the price in general any time you buy a liquid asset your not going to be too far off the true price this saved me a lot of time trying to value everything myself , short term volitility means checking your prices daily will drive yourself mad and your as likely to see a stock down as up but over the long term the stock market should have a positive return. 

I don't think you should think of gold or equities or properly Or cash , you can have them all as part of a balanced portfolio. 

The experts say gold goes up when equities go down as it is a safe haven but I'm not sure that had happened of late , I would not be keen on gold myself for similar reasons buffet mentioned and sarenco.


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## Jim2007

landlord said:


> I read about Glencore last week before it crashed and the potential domino effect from its fall.  I am now reading about the huge impending derivative (particularly  Deutsche bank) and bond market crash.  I have to admit I don't fully understand everything I'm reading as I have no background in economics.  However the implications for the markets seem incredible.



What exactly are you talking about????  Glencore is not something you invest in for a start...  DB is involved in many different derivative products, so which ones in particular are you concerned about????


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## Sarenco

Fella said:


> The experts say gold goes up when equities go down as it is a safe haven but I'm not sure that had happened of late , I would not be keen on gold myself for similar reasons buffet mentioned and sarenco.



The long term correlation of gold and equities is basically zero - it's not significantly negative - so you generally can't rely on gold to ride to the rescue if your stocks are tanking.  The diversification benefits of holding gold are hugely overstated IMO.


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## landlord

Sarenco said:


> Incidentally, if you are genuinely concerned about an imminent bout of hyper-inflation, then you should brace yourself for a corresponding uptick in interest rates.  I recall from a previous thread that you have significant property-related debt and I would suggest that this is where you should really be directing your fears.


Thanks Sareno.....good point.
I woulnt say I am worried about "imminent" hyper inflation, but I beleive it could be on the horizon. Fortunately I like to think that I have a hedge against rising ECB rates affecting my ECB tracking investment mortgages, in that when ECB rates rise, my currently massive (rental) tax bill will reduce (75% of the mortgage interest can be offset.....) 
However I do appreciate what you said in an earlier post regarding the benefits of paying off debt.


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## Sarenco

Fair enough but don't forget that, currently, 25% of you interest payments are non-deductible.  Also, there is no guarantee that this tax treatment will not be changed to your detriment in the future - look at the recent changes introduced by Mr Osbourne in the UK on the tax treatment of BTLs for example.


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## Fella

Whats your end game landlord? Get as rich as possible or retire early or preserve your wealth from inflation. If you have a few buy to lets your probably well set up for the future. My goal is save to 1 million by 40 then relax ( probably not going to happen!) . I really don't think it should be an either or decision about stock market you probably just went in too hard , maybe dollar cost average just for peace of mind is the way to go you , you could start buying every couple of months and let it grow that way.


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## landlord

Fella said:


> Whats your end game landlord? Get as rich as possible or retire early or preserve your wealth from inflation. If you have a few buy to lets your probably well set up for the future. My goal is save to 1 million by 40 then relax ( probably not going to happen!) . I really don't think it should be an either or decision about stock market you probably just went in too hard , maybe dollar cost average just for peace of mind is the way to go you , you could start buying every couple of months and let it grow that way.



Hi Fella....I got your PM the other week and did reply to it...not sure if you saw my reply?
My goal is to most efficiently handle the debt on my ECB tracker mortgages.  I am paying off capital on two of them at quite a high rate, 4 are on interest only and I have no mortgage on the last. There is approximately 16 years left on the term of the mortgages. My negative equity situation has improved in the last year due to property price rises and paying down capital. However I am conscious of the fact that I will be liable for the remaining capital in 16 years time, which is a long enough window to invest a portion of my savings. I have most definitely not been put off by this recent experience and would definitely go in again when I see better value. Not sure about dollar cost averaging (for someone with a lump sum)...makes perfect sense if you havnt quite reached the bottom, but not if you are at the start of a bull run. But for my own sanity maybe it's worth while!!


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## landlord

Sarenco said:


> Fair enough but don't forget that, currently, 25% of you interest payments are non-deductible.  Also, there is no guarantee that this tax treatment will not be changed to your detriment in the future - look at the recent changes introduced by Mr Osbourne in the UK on the tax treatment of BTLs for example.



I am concerned about our own budget and the impact of possible residential rental price controls. I am hoping that there will be some kind of rental tax relief, for those who do not raise rents for a period of time.


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## Fella

Just seen your pm now sorry ! Cheers landlord


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## joe sod

Maybe October could be a good month with a big reversal back up, after all there has been huge selling over the last 2 months. Oil seems to have stabilised for now. Maybe money will now move into emerging markets after the relentless selling


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## landlord

I DON'T GET IT.........

The last couple of days has seen a huge rally on the stock markets. 

You would think this is a reflection of improved world growth, employment and fiscal confidence. 

BUT NO.......

The Fed reported on Friday the September jobs report, which said the economy created a disappointing 142,000 new jobs last month, following an even meagre increase in August. Wall Street had been expecting a gain of 200,000. This was seen apparently as a very "ugly" report. 

A downgrade from the World Bank for China was reported. Amongst other general economic bad news. 

Yet as far as I can tell all this bad news for world growth is great news for the stock market because it potentially means a delay on the Fed rate rise and possibly more world central bank stimulus/QE-Quantitive Easing

Surely a possible analogy to this would be a long term drug addict (The stock market), desperate for his (practically free 0--interest rate) injections of methadone. (QE). The drug addict's health is gradually getting worse and worse and his addiction to this free methadone has become insatiable and has fuelled a mega high. So much so that extra stimulus is required, HEROINE or (a new super sized QE). 

How long can this high continue? 

(For what it's worth due to the stock market rally over the last couple of trading days I am now worse off for bailing!!)


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## Sarenco

Yep, the "bad news is good news" dynamic for equity markets has been with us for some time now.  Your drug addict analogy is spot on but don't forget that bonds and real estate should tank (at least in the short term) when rates do eventually rise.  All valuations are relative - money has to flow somewhere.

Incidentally, if you are interested in the behavioural aspects of investing I would recommend reading pretty much anything written by Jason Zweig (Wall Street Journal).  

http://www.jasonzweig.com


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## Fella

But I see the problem again that your trying to time the market or predict what will happen nobody can do that , your better off been pure ignorant and admit you know nothing like me  , the stock market could rally now for 10 years while your waiting for this next crash. Remember everything you know and read the market knows also and is factored in , it is what it is it is a fair value now based on all known information and there will be fed increases rates potential factored in also. Your goal is 10year investment plan and to me your trying to find the bottom of the market for all we both know you have may have missed it.


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## landlord

Fella said:


> But I see the problem again that your trying to time the market or predict what will happen nobody can do that , your better off been pure ignorant and admit you know nothing like me  , the stock market could rally now for 10 years while your waiting for this next crash. Remember everything you know and read the market knows also and is factored in , it is what it is it is a fair value now based on all known information and there will be fed increases rates potential factored in also. Your goal is 10year investment plan and to me your trying to find the bottom of the market for all we both know you have may have missed it.



Hi Fella...
Actually I think I am just trying to avoid the top of the market (not find the bottom), but you are correct there is definitely an element of timing the market involved in my approach and yes I probably should just admit that what I understand about the stock market I could write on the back of a postage stamp.
Also to be fair, since I have bailed, I am probably devoting more time to looking for the bear than the bull!!


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## Fella

Haha you could fit what I know on that same stamp! I just don't think there is anyone else that knows any more or there is any more to know!


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## joe sod

I think you make good points fella about the need to able to handle losses, but also to actually sell at a loss. I was lucky back in 2006 in that the investments I made were the ones that recovered strongly after the initial crisis. The thing that is different now compared to 2007 is that everyone was very optimistic then, there was little doom mongering, you really had to search for it. Now there is so much pessimism, everyone is waiting for the big crash .Therefore if everyone believes the same thing it's usually wrong


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## joe sod

Ive made the point here about computer algorithms distorting the underlying normal movements in stock markets especially in the last month. From an article I read today I learned that the average holding period for stocks in 1965 was 7 years, in 1995 it was 2 years, now it is months. The reason for this computer trading and algorithms programmed to follow trends thereby reinforcing a small and maybe insignificant trend that without computers would have just petered out. Therefore computers in themselves may have caused a huge move like in august which was not justified by fundamentals.


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## He-Man

When you were selling your equities, I was piling fresh cash into mine, delighted by the discounted price. It is perfectly normal for markets to hit new highs every so often. You are wrong to conclude that there's little to no value in equities, especially European and Emerging equities.


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## landlord

I am quietly cowering in a sewer at the moment completely disillusioned !!


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## galway_blow_in

you only lost 10% and it was your first time investing in the markets proper , if you take enough time out and work out which strategy suits you , you have plenty of time to do well out of the market in the coming years

you might be better with half your money in fixed income , not only is it less volatile , when equities tanked in 2008 , bonds rose ( though not to the extent which stocks dropped ) , the stock market is rigged in the short term , anyone who thinks otherwise is deluding themselves , only 50% of americans own stocks and americans own more stocks than anyone , most stocks are in the hands of the 1% , thats not a paul murphy style call for revolution but the big guys are always making money , even when they were on the brink in 2008 , they were handed tax payers money to continue their game some more 

all the talk this past three or four months was ultra bearish , when greece happened , it looked like contagion would spread and markets dropped , then china appeared to be slowing down in a dramatic fashion and european markets gave back everything they had gained since draghi announced QE , nothing has changed since the first of october in terms of china , a sluggish europe or greece , yet the s+p is now possitive for the year and the german dax is up 16% in the space of four weeks despite being technically in a bear market 

the market is rigged , only way money can be made is by becoming a trader ( which means giving up your day job and learning how to read technical charts of all kinds ) or to have a buy and hold strategy in a well diversified etf , take a look at the s+p statisitcs this past century , since 1985 , the market is up about eight times where it was in october of that year , from 1955 to 1985 , the returns were not far off that either , this despite the market being lower in early 2009 than it was in late 1996 at one point , if you have a short term view of even three years , you are very likely to make nothing , majority of people will never get rich in the market as either they are not smart enough or dont have enough capital to start out with , have modest goals and accept that everything is beyond your own control bar your refusal to hit the sell button everytime wall st decides to hold the little guy by the ankles and shake him for cheap stocks


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## galway_blow_in

forgot to add land lord , maybe you would be better not investing all in one go , maybe invest every quater or so , even in years like 2013 , there was a 5% pullback every few months

my hunch is that the markets are going to continue rising in the coming year or two , the fed in america is completely toothless and QE is only really beginning in europe , the big guys didnt like the 30% run up from january to march off the back of draghis announcement so it was all given back , new highs in europe should be seen in the next six months , especially the FTSE as energy appears to have bottomed and mining was as bad as it could possibly be


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## settlement

landlord said:


> I only started studying the stock market at the start of this year. So would still most definitely consider myself a rookie. I invested a large lump sum at the start of August and lost just over 10% within three weeks and about 12% when I sold last week. (Mid sept 2015).
> After a six year bull run I believed when I started investing in early August that the equities market had a year or two to go before it peaked and this may still be true. My goal was a 15 year long term investment.
> It is said that the long-term investor should not try to time the market and sure, had I left my funds alone for 15 years I probably would have beaten deposit rates by a descent margin. But it just doesn't make sense to me to continue investing at the top or close to the top of a 6 year bull run, especially when there are so many negative indicators, both politically and economically. Stocks are massively overpriced and there currently seems to be tremendous economic instability. Statistical history suggests that this bull market may end fairly soon, so it seems logical to wait for better value.
> I would hope within a year or two my original chosen funds would have dropped in value to a point below or significantly below what they are at now. (But who knows).
> As for the timing of my exit, I did consider hanging in for a bit longer to at least try to recover my losses and at best pull out closer to the peak of the current bull run. (Greed?)
> However after several restless nights concerned over when exactly that peak will be, I started to think to myself what would I do if the market suddenly dropped 5 or 10% in one day, well probably the same as most investors and consider the drop to be a temporary blip and wait for the rally the following day, potentially suffering an even greater loss if it's a genuine crash. After all the volatility in the markets in the last few weeks has frequently seen 2 to 3% falls and rises in the main indices in a single day. However I suspect a true crash would likely catch many including myself by surprise.
> 
> As Rory Gillen says in his book 3 steps to investment success (A great book I have to say), "Avoid letting volatility interrupt your savings or investment plan. I personally psychologically couldn't handle this volatility even though I had a 15 year long term investment plan. I suspect I would have handled it much better at the end of a 6 year bear run as opposed to the end of a 6 year bull run.
> I am aware that I have possibly made a stupid rookie mistake and converted what may have been a temporary loss into a permanent loss. However perhaps I have saved a small fortune. Only time will tell. But either way I would prefer to bail out a year or two early then a day too late.



Not to sound rude but had you studied sufficiently you would have known one of the most basic rules of investing: don't invest unless you are willing to leave the money alone for 5 years at least. You were not willing to leave it alone.


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## joe sod

even the best investors can get it wrong Warren Buffet is not having a great run lately. He got Tesco badly wrong and then he sold it at its rock bottom last year, he also has big investments in Walmart and IBM which are doing badly. He invested in Intel a few years ago then quickly sold it before Intel appreciated by 65% reasonably quickly afterwards. Buffet was right about technology stocks back in 2000 but maybe he is wrong now as technology is a huge part of the global economy, can a huge fund like Berkshire continue to ignore it


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## galway_blow_in

joe sod said:


> even the best investors can get it wrong Warren Buffet is not having a great run lately. He got Tesco badly wrong and then he sold it at its rock bottom last year, he also has big investments in Walmart and IBM which are doing badly. He invested in Intel a few years ago then quickly sold it before Intel appreciated by 65% reasonably quickly afterwards. Buffet was right about technology stocks back in 2000 but maybe he is wrong now as technology is a huge part of the global economy, can a huge fund like Berkshire continue to ignore it



its strange how devoted to IBM buffett is , tech has a trendy vibe about it in terms of drawing investors , facebook and google are cool , apple no longer has the cool factor and IBM is a grand dad , the definition of old tech , i guess buffett is a hold forever investor so he probably thinks facebook is a short term success story and that IBM will be there when trends come and go


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## Fella

I was in a position yesterday where I could sell all my ETF's at no loss so I took it , got tired of the tax treatment and the 8 year roll up , I made a few thousand. I've learned a lot from the experience mostly that all shares seem to be rise and fall together . 

Over yeseterday and today I bought 100k in investment trusts using the AIC website (thanks sarenco) I went with the cheapest trusts from a management cost and bought 10 of them , I went with a mix of global / uk / Japan a property fund and a biotech. These where all purchased with Saxo bank in gbp but my account is in Euro the fees where reasonable . 
I had ~ 170k left in Saxo I picked 15 companies at random in different sectors and bought 10k worth of shares in each , they are large companies household names . My shares are all losers at the moment I think I'm -3000 or so that's just spread and currency costs and fees I reckon . Anyway I feel a lot better that I don't have to worry about the 8 years , I'm going to continue to maybe spend 5k a month on a random blue chip share for the next few years and with a bit of luck I should come out up.


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## Brendan Burgess

Hi Fella

Overall a good strategy, but don't buy completely at random.  Make sure that you are not overexposed to a particular sector or a particular currency.  Randomness might achieve this, but it might also result in concentration by accident. 



Fella said:


> I'm going to continue to maybe spend 5k a month on a random blue chip share for the next few years and with a bit of luck I should come out up.



With a pot of €250k, €10k represents only 4% of your invested money. Assuming you have a home and an income, then you do not need to be that diversified.  When investing new money, it might be administratively easier to buy more shares in one of the companies you already own.

Brendan


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## Fella

Thank you Brendan , 

I am buying in different sectors , because I bought all the trusts in GBP I bought the individual shares in euro and dollars , I am very long term buy and hold , I have been reading about dividend income as I have never dealt with it before , I am a low tax payer so from my reading I basically have to do nothing as dividends are withheld at source. It seems complicated on revenue website , double taxation agreement etc depending on what exchange you bought the shares , I understand Irish dividends are taxed at source. I will wait and see what I do re dividends when I get paid I'll see what saxo deduct and contact revenue . 

If there is much admin in the paying tax on the dividends then I will just top up on what I have. I have no real belief in stock market value I am happy to believe in efficient market and just top up monthly. I continue to save ~10k every month and have no real need for the money now I could deal with a 100k loss on my investment should the worst happen its only numbers on a sheet , i'm early thirties still so can give these shares 20 or 30 years .


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## joe sod

I am going in that direction myself towards investment trusts. I have been investing for over 10 years now and this has been my worst year. I had a big proportion in energy stocks also spain, portugal, poland and russian etfs. The thing is Im giving back some of the gains I made before so its not as bad as losing new freshly invested capital. The gains I made previously probably made me a bit over confident. This year has made me lose confidence in my own judgement. Im still up alot on investments I made back in 2012 but everything I bought in the last 18 months has been going down.


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## joe sod

Well 2016 has really started horribly and sentiment is terrible. From my understanding the only big thing that really happened was the lifting of selling restrictions on some Chinese shareholders. Yet it resulted in a crescendo of selling throughout the world. It begs the question are markets really rational. I'm surprised nobody has been commenting on the situation now I know the Irish market has not been affected as much. Even on other blogs there is very little rational analysis of the situation now nobody seems to be making sense of it.


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## landlord

I still have the same fears in the direction of the markets that I had a few months back. 
My original portfolio has dropped by another 2% since I sold......and my new portfolio which includes gold related products including physical gold and gold/silver royalty companies like RGLD, FNV, SLW are doing well. I have taken a huge gamble on gold but I am able to sleep better at night, even when initially its value dropped fairly significantly.


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## Brendan Burgess

landlord said:


> I have taken a huge gamble on gold but I am able to sleep better at night,



Hi Landlord

This makes no sense to me.  If you have taken a huge gamble on anything, you should not be able to sleep very well. 

Brendan


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## joe sod

fair play to you at least you took decisive action. Maybe gold has bottomed, or nearing it along with commodities in general but they have been falling since 2011. Thats what has damaged my portfolio I had too much oil and emerging markets including emerging europe in my portfolio. I thought I was buying cheap unloved stocks.For example I bought a polish etf in 2014, the polish economy has been very strong but the stock market has declined by nearly 20%, because of russian concerns and banking concerns but nothing concrete. Also I bought with US dollars which makes it look worse, because the dollar appreciated by 20% in that time. So therefore on paper I am down 40% on this ETF even though the polish economy has continued to prosper. I thought I was acting rationally but the markets have made a fool out of me.


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## Jim2007

landlord said:


> I have taken a huge gamble on gold but I am able to sleep better at night, even when initially its value dropped fairly significantly.



I would suggest you are sleeping well because your portfolio is doing well, not because you are comfortable with the risks you are taking.


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## landlord

Brendan Burgess said:


> Hi Landlord
> 
> This makes no sense to me.  If you have taken a huge gamble on anything, you should not be able to sleep very well.
> 
> Brendan



What can I say except that I genuinely am able to sleep better? Perhaps I am using the word gamble more in my perception of how other investors might see it.



Jim2007 said:


> I would suggest you are sleeping well because your portfolio is doing well, not because you are comfortable with the risks you are taking.



As I said in my last post, initially my new portfolio went down, but this time round I didn't get that sinking feeling in my gut that I had made a bad choice. Gold may go down in the short time and equities bounce back, but I believe over a medium term investment 3-5 years that gold/silver has more upside potential than non precious metal equities. But who knows....I only invested a third of the amount I invested last time.  I am taking a cash is king approach this time. But I will be making monthly purchases of gold/silver related products, but will keep my ratio of cash 2/3s to 1/3 precious metals the same.


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## Fella

Good luck in your investments everyone. 

I deleted the app so never check if my investments are up or down I don't care , I am buying 5k a month now so if its down I am buying cheaper . As Warren Buffet says you don't buy a house/farm whatever and get it valued everyday. You can't control the markets history says I should be up but history also tells me I'm young now early thirties so i'm going to face a few crashes in my lifetime , no point beating myself up over each one. 

The key to me now is every penny I have invested I can afford to lose , I don't need the money , in fact I am starting to realise that I probably have more money than I will ever need in my lifetime, if your over thinking it you have probably invested too much IMO. 
I also think people shouldn't invest until they have all loans paid off (maybe with exception of very low trackers )and a decent few months worth of savings put away , but thats just my opinion.


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## Gordon Gekko

Very sensible advice. If you're buying quality, are sufficiently diversified, and you have a long-term time horizon, periods like this merely represent a temporary loss of capital. And as was rightly pointed out, if you are investing on a monthly basis for many years to come, you actually want markets to be volatile. The trick is not to panic and turn a temporary loss of capital into a permanent one by selling your portfolio.


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## galway_blow_in

joe sod said:


> Well 2016 has really started horribly and sentiment is terrible. From my understanding the only big thing that really happened was the lifting of selling restrictions on some Chinese shareholders. Yet it resulted in a crescendo of selling throughout the world. It begs the question are markets really rational. I'm surprised nobody has been commenting on the situation now I know the Irish market has not been affected as much. Even on other blogs there is very little rational analysis of the situation now nobody seems to be making sense of it.



vast majority of s+p components are deep in bear territory , the overall market was deceiving as a handful of winning stocks were keeping the market up , this is the worst start to a year ever yet markets are only 9% from all time highs which suggests there is plenty of room to fall , things are incredibly bearish right now , a very possitive jobs report in the usa done nothing for stocks today , an economy can be improving while markets chose to go the other way


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## galway_blow_in

joe sod said:


> fair play to you at least you took decisive action. Maybe gold has bottomed, or nearing it along with commodities in general but they have been falling since 2011. Thats what has damaged my portfolio I had too much oil and emerging markets including emerging europe in my portfolio. I thought I was buying cheap unloved stocks.For example I bought a polish etf in 2014, the polish economy has been very strong but the stock market has declined by nearly 20%, because of russian concerns and banking concerns but nothing concrete. Also I bought with US dollars which makes it look worse, because the dollar appreciated by 20% in that time. So therefore on paper I am down 40% on this ETF even though the polish economy has continued to prosper. I thought I was acting rationally but the markets have made a fool out of me.



not only has oil not yet bottomed , its inches away from another leg down


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## galway_blow_in

landlord said:


> What can I say except that I genuinely am able to sleep better? Perhaps I am using the word gamble more in my perception of how other investors might see it.
> 
> 
> 
> As I said in my last post, initially my new portfolio went down, but this time round I didn't get that sinking feeling in my gut that I had made a bad choice. Gold may go down in the short time and equities bounce back, but I believe over a medium term investment 3-5 years that gold/silver has more upside potential than non precious metal equities. But who knows....I only invested a third of the amount I invested last time.  I am taking a cash is king approach this time. But I will be making monthly purchases of gold/silver related products, but will keep my ratio of cash 2/3s to 1/3 precious metals the same.



i actually ( through blind luck ) made money on gold from 2010 to 2012 , id never invest in gold again , it has no intrinsic value so its impossible to value it objectively


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## joe sod

galway_blow_in said:


> not only has oil not yet bottomed , its inches away from another leg down


Yea betting on a falling oil price has been a winner the last 18months, and it looks terrible but Im invested in the oil majors. Unfortunately the falling oil and commodities has hit country specific etfs aswell and also emerging markets. So even though investing widely you are still getting caught in the terrible sentiment. The thing is if the US markets now look like turning, europe is aneamic and has not recovered from 2008. China is in freefall and emerging markets and commodities are 4 years into bear market. How do you diversify. Surely emerging markets and commodities must be close to the bottom


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## Gordon Gekko

The key is not to panic. Based on where price to book values are right now at the start of the year, never in history have values been down come the end of the year.

Speculating on oil and gold is a mugs' game. Buy a diversified basket of high quality companies (Nestle, Colgate, Coca-Cola, Diageo, Heineken, Unilever, etc) and don't panic when they fall in value.


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## galway_blow_in

joe sod said:


> Yea betting on a falling oil price has been a winner the last 18months, and it looks terrible but Im invested in the oil majors. Unfortunately the falling oil and commodities has hit country specific etfs aswell and also emerging markets. So even though investing widely you are still getting caught in the terrible sentiment. The thing is if the US markets now look like turning, europe is aneamic and has not recovered from 2008. China is in freefall and emerging markets and commodities are 4 years into bear market. How do you diversify. Surely emerging markets and commodities must be close to the bottom



europes markets  have  never managed to remain strong while the usa dropped , the european equity market is a follower , not a leader , the uk market is top heavy with energy and mining companies , germany is highly dependent on china , the other major countries in europe are teetering on recession ( italy , spain , france )

the irish stock market is truly astonishing in how it has managed to stay up ,its so small however , it could drop 20% overnight if a wave of selling came in 

i dont have an awful lot in the markets but im selling every stock i own this coming monday unless we get a turnaround , this is really bad as no black swan event has happened , it appears that markets were just too rich for too long , the usa market if it drops below 1830 ( august lows ) , wont stop until the highs it made pre crash in 2007 which is 1550 or thereabouts


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## galway_blow_in

Gordon Gekko said:


> The key is not to panic. Based on where price to book values are right now at the start of the year, never in history have values been down come the end of the year.
> 
> Speculating on oil and gold is a mugs' game. Buy a diversified basket of high quality companies (Nestle, Colgate, Coca-Cola, Diageo, Heineken, Unilever, etc) and don't panic when they fall in value.



what do you mean when you say values have never been down come the end of the year , values are above the average down the years


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## Gordon Gekko

galway_blow_in said:


> what do you mean when you say values have never been down come the end of the year , values are above the average down the years



The price to book for the market right now, today. At its current level, looking back over the history of markets, 365 days later the market has NEVER been lower. I read this in a piece of research this morning.


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## joe sod

Gordon Gekko said:


> The key is not to panic. Based on where price to book values are right now at the start of the year, never in history have values been down come the end of the year.
> 
> Speculating on oil and gold is a mugs' game. Buy a diversified basket of high quality companies (Nestle, Colgate, Coca-Cola, Diageo, Heineken, Unilever, etc) and don't panic when they fall in value.


I take your point and I agree largely. When I looked at those companies they were always trading at rich valuations the only one I bought was Coca Cola last year when it was out of favour and cheapish. I didn't think I was speculating I wasn't buying futures in oil or risky exploration companies I bought the oil majors and emerging markets etfs along with general european etfs. But in hindsight I weighed too heavily in that direction.


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## Gordon Gekko

joe sod said:


> I take your point and I agree largely. When I looked at those companies they were always trading at rich valuations the only one I bought was Coca Cola last year when it was out of favour and cheapish. I didn't think I was speculating I wasn't buying futures in oil or risky exploration companies I bought the oil majors and emerging markets etfs along with general european etfs. But in hindsight I weighed too heavily in that direction.



Yes, your strategy to buy high quality companies was correct, you just didn't buy enough of them. 

It's worth noting that people who bought these companies in 1999/2000 when they traded at 40 times earnings (essentially the worst time in history) continued to get their circa 3% dividends through those lost years after the dot.com crash, and that those companies subsequently hit new highs. It just took a while. They were and are great assets to hold, those people just overpaid for them. Overpaying for a great asset is not the end of the world.


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## Jim2007

joe sod said:


> I thought I was buying cheap unloved stocks. For example I bought a polish etf in 2014....



But you bought the market and not the unloved stocks!  The difference being that for your investment to do well the Polish economy has to do well, where as under valued stocks can do well or not  regardless of economic conditions.


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## joe sod

Thanks for the advice I can see now that I was putting too much money into volatile assets. I think 2015 was an extreme year in terms of the volatility in the assets I invested in. I think the oil market will recover and also emerging markets but it has really hurt my portfolio in the mean time. Of course if I had picked the right time to invest in these assets I would think I was a genius but I would really just have been lucky. However if I was coming to it with fresh capital and with the decimation in these markets now surely now especially emerging markets are compelling investments.


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## landlord

galway_blow_in said:


> vast majority of s+p components are deep in bear territory , the overall market was deceiving as a handful of winning stocks were keeping the market up , this is the worst start to a year ever yet markets are only 9% from all time highs which suggests there is plenty of room to fall , things are incredibly bearish right now , a very possitive jobs report in the usa done nothing for stocks today , an economy can be improving while markets chose to go the other way



Jobs reports are lagging not leading economic indicators of a declining economy. US manufacturing is majorly declining, U.S. GDP is being revised downwards and I believe this will be reflected in the jobs report soon.


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## galway_blow_in

joe sod said:


> Thanks for the advice I can see now that I was putting too much money into volatile assets. I think 2015 was an extreme year in terms of the volatility in the assets I invested in. I think the oil market will recover and also emerging markets but it has really hurt my portfolio in the mean time. Of course if I had picked the right time to invest in these assets I would think I was a genius but I would really just have been lucky. However if I was coming to it with fresh capital and with the decimation in these markets now surely now especially emerging markets are compelling investments.



timing is what seperates good investors from average ones , vast majority of people are average which is why taking a long term view is the only sensible approach , the smartest people in the world earned their fortunes in the financial markets which is why most people loose money in stocks


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## joe sod

i read an article yesterday on dealing in todays stock markets or stock markets over the last 20 years. Basically they made the point that there is no point in using statistics going back over 25 years as we are investing in todays market and not 25 years ago and the goal posts have changed. The biggest issue is electronic trading resulting in huge swings in volatility like we are currently experiencing. This did not happen before the 90s as it took a long time for a trend to establish and it was difficult to trade in shares so people would only commit to buying or selling if they were absolutely sure. Therefore trades that are happening now would not have happened 25 years ago. So bull and bear markets would play out over years. Going back over the last 15 years we have had 2 major crashes and maybe now entering a third and also 2 bull markets in between. In 2008 the crash started in september 2008 and was exhausted by march 2009. (Ireland is a different story as it was dominated by banks so its fate was tied to the financial sector). In those few months the dow lost almost half its valuation. Even in 1929 it took an awful lot longer for the bear market to play out and bottom. Another thing is the interconnectivity of world markets even if in reality there is little in common.


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## Jim2007

joe sod said:


> i read an article yesterday on dealing in todays stock markets or stock markets over the last 20 years. Basically they made the point that there is no point in using statistics going back over 25 years as we are investing in todays market and not 25 years ago and the goal posts have changed.



Yes this is commonly referred to as the "this time it's different" argument, I've heard it over and over again during the last 30 years, only it never it.  Fools who try to play the market will continue to loose money like they always do, while wise investors who buy good stocks at reasonable prices will continue to make money - in the short term the market is a voting machine, but in the long term it is a weighing machine (Benjamin Graham).


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## Gordon Gekko

I can see merit in that argument.

How is today's market, with robo-advisers, instant information exchange, quantitative easing, and an opaque but powerful China any way similar to the market of bygone eras?


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## Marc

Markets transfer wealth from the impatient to the patient


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## Fella

Marc said:


> Markets transfer wealth from the impatient to the patient



Marc I think I probably owe you an apology , I doubted a lot of what you said about people been no good with their own money and that people should let a financial advisor take control. I think your right , the reason most people can't make it work is because they can't stop fiddling around with things and sell when stocks drop etc etc. No matter how many times you type the same thing to people that they can't predict short term price movements people still try to and adjust their portfolios once more. I would be fairly certain that those that invest regularly probably stop or hold off during times of falling prices.


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## Fella

Marc said:


> Markets transfer wealth from the impatient to the patient



Marc I think I probably owe you an apology , I doubted a lot of what you said about people been no good with their own money and that people should let a financial advisor take control. I think your right , the reason most people can't make it work is because they can't stop fiddling around with things and sell when stocks drop etc etc. No matter how many times you type the same thing to people that they can't predict short term price movements people still try to and adjust their portfolios once more. I would be fairly certain that those that invest regularly probably stop or hold off during times of falling prices.


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## galway_blow_in

joe sod said:


> i read an article yesterday on dealing in todays stock markets or stock markets over the last 20 years. Basically they made the point that there is no point in using statistics going back over 25 years as we are investing in todays market and not 25 years ago and the goal posts have changed. The biggest issue is electronic trading resulting in huge swings in volatility like we are currently experiencing. This did not happen before the 90s as it took a long time for a trend to establish and it was difficult to trade in shares so people would only commit to buying or selling if they were absolutely sure. Therefore trades that are happening now would not have happened 25 years ago. So bull and bear markets would play out over years. Going back over the last 15 years we have had 2 major crashes and maybe now entering a third and also 2 bull markets in between. In 2008 the crash started in september 2008 and was exhausted by march 2009. (Ireland is a different story as it was dominated by banks so its fate was tied to the financial sector). In those few months the dow lost almost half its valuation. Even in 1929 it took an awful lot longer for the bear market to play out and bottom. Another thing is the interconnectivity of world markets even if in reality there is little in common.



shorting is a bigger factor today aswell , hedge funds are shorting for all they are worth right now


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## galway_blow_in

Fella said:


> Marc I think I probably owe you an apology , I doubted a lot of what you said about people been no good with their own money and that people should let a financial advisor take control. I think your right , the reason most people can't make it work is because they can't stop fiddling around with things and sell when stocks drop etc etc. No matter how many times you type the same thing to people that they can't predict short term price movements people still try to and adjust their portfolios once more. I would be fairly certain that those that invest regularly probably stop or hold off during times of falling prices.



unfortunatley most so called " financial advisors " ( the kind banks send out to meet you with a big smile ) are nothing more than salespersons who undertook a class to learn various financial jargon , might explain why four out of five funds fail to beat the market each year , long term approach combined with choosing the lowest costs fund is the key to returns


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## Gordon Gekko

I think that's a little harsh. There are some investment advisers in Ireland who adopt that type of long term approach with a focus on quality, and who don't railroad clients into their own products.

In an ideal world, someone would just buy a cheap MSCI World ETF, a basket of ETFs, or a basket of direct equities and leave it at that. Unfortunately, the behavioural side of things kicks in with investors, and they bail at the wrong time. Such an approach also ignores the identification of the right ETFs. For example, the UK market did very little last year and most people agree that the US is probably overvalued. Europe and Japan have been good places to be in recent times. A good investment adviser helps clients to overcome these issues.

Investors should look for transparency with regard to fees and charges, a lack of conflict with regard to how monies are invested, and appropriate investment resources.


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## joe sod

With regard to Japan that's true now but few people would have invested in Japan 2 years ago when they saw the horrendous performance of the Japanese stock market since 1990. There were many false dawns in that period also., The Japanese market was cheap for years so in 2007 you would think you were buying into a cheap unloved market only to see it decimated again in the financial crisis. The common talk about Japan for years was that it was an ageing very high debt market. It just shows you how difficult it is to stay the course when investing in out of favour sectors. It also shows that trends rather than fundamentals really drive stock markets eventually the fundamentals win out but you may have to wait years for this in the meantime watching your investment continue to decline.


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## galway_blow_in

Gordon Gekko said:


> I think that's a little harsh. There are some investment advisers in Ireland who adopt that type of long term approach with a focus on quality, and who don't railroad clients into their own products.
> 
> In an ideal world, someone would just buy a cheap MSCI World ETF, a basket of ETFs, or a basket of direct equities and leave it at that. Unfortunately, the behavioural side of things kicks in with investors, and they bail at the wrong time. Such an approach also ignores the identification of the right ETFs. For example, the UK market did very little last year and most people agree that the US is probably overvalued. Europe and Japan have been good places to be in recent times. A good investment adviser helps clients to overcome these issues.
> 
> Investors should look for transparency with regard to fees and charges, a lack of conflict with regard to how monies are invested, and appropriate investment resources.




european markets have never continued to gain while u.s markets were floundering , european markets are followers so if the u.s enters a full blown bear market , europe will do the same 

regarding investment advisors , a close relative of mine came into some money in 2006 having sold some farm land for nearly 20 k per acre , they planned on doing nothing for a few years and just put the money in savings for a year , one day they got a call from an irish life operative , this person then  actively pursued them for the following few months with endless phone calls and house calls  , encouraging them to invest in a fund etc , this relative of mine was fifty nine at the time , they got them to stick the money in an india and china fund which nine years later is worth less than it was in 2007 ( in the years prior to spring of 2007 , india and china funds had delivered huge returns ) , now luckily i had a chat with this person fifteen months into there investment with irish life  and they bailed ( a few months before the crash of 2008 really began in earnest )  and put everything back in cash , not only was there a 5% per anum managment fee on the fund for the fifteen months they were invested  , there was an exit fee of 5% on top of that  , this person invested 750 k and lost 50 k off the back of predatory banks but it wasnt just unethical , it was plain dumb , all they had to do when selling a product to someone near sixty was get them to put every penny in a bond fund 

my point is , not only are most investment funds very bad value , more often than not , the advice is not particulary valuable


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## galway_blow_in

joe sod said:


> With regard to Japan that's true now but few people would have invested in Japan 2 years ago when they saw the horrendous performance of the Japanese stock market since 1990. There were many false dawns in that period also., The Japanese market was cheap for years so in 2007 you would think you were buying into a cheap unloved market only to see it decimated again in the financial crisis. The common talk about Japan for years was that it was an ageing very high debt market. It just shows you how difficult it is to stay the course when investing in out of favour sectors. It also shows that trends rather than fundamentals really drive stock markets eventually the fundamentals win out but you may have to wait years for this in the meantime watching your investment continue to decline.



did you know that when the s+p closed yesterday , it was only 25% above where it closed in august of 2000 , excluding dividends , thats a capital gain of only 1.5% per anum since the turn of this century , i dont know if that says the markets were very overvalued in 2000 , that they are cheap today , that even fifteen and a half years is too short of a time to realise large gains , had someone invested in the s+ p in 1986 , they would be up an enormous amount


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## joe sod

galway_blow_in said:


> did you know that when the s+p closed yesterday , it was only 25% above where it closed in august of 2000 , excluding dividends , thats a capital gain of only 1.5% per anum since the turn of this century , i dont know if that says the markets were very overvalued in 2000 , that they are cheap today , that even fifteen and a half years is too short of a time to realise large gains , had someone invested in the s+ p in 1986 , they would be up an enormous amount


Yes I know I made that point earlier, it was more that the US market was way overvalued in 2000. But then is it the case that a lot of the business that US and western companies got before has shifted to China and emerging markets. Therefore maybe 2000 was the last big bull market in US stocks, so maybe the rise in the US markets is much slower now than before when the US had a much bigger share of the world market. I don't know I'm just thinking out loud. It would explain why the China Shenanigans is having such a big effect now. 2000 was a very optimistic time now the world is full of fear what with terrorism, flooding, and 2 financial crises. Maybe investors are obsessed with avoiding financial loss that the first sign of trouble they bail out.


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## galway_blow_in

joe sod said:


> Yes I know I made that point earlier, it was more that the US market was way overvalued in 2000. But then is it the case that a lot of the business that US and western companies got before has shifted to China and emerging markets. Therefore maybe 2000 was the last big bull market in US stocks, so maybe the rise in the US markets is much slower now than before when the US had a much bigger share of the world market. I don't know I'm just thinking out loud. It would explain why the China Shenanigans is having such a big effect now. 2000 was a very optimistic time now the world is full of fear what with terrorism, flooding, and 2 financial crises. Maybe investors are obsessed with avoiding financial loss that the first sign of trouble they bail out.



while the lot of the average american has declined relatively speaking this past forty years , american corporations have never been stronger , many of their employees now live in china etc and profits are recorded in places like ireland but they are not struggling , far from it


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## joe sod

galway_blow_in said:


> while the lot of the average american has declined relatively speaking this past forty years , american corporations have never been stronger , many of their employees now live in china etc and profits are recorded in places like ireland but they are not struggling , far from it



Thats true. So where in general where would you be investing I know you said you were staying out until turmoil ends. The US looks like it is on the way down for now. But you also point out that it has not gained much since the year 2000 and also that american corporations have never been stronger. Also  european stocks are alot cheaper than the US and emerging markets and commodities have been decimated last 3 years. When you lay it out like that there doesn't seem much justification for the big sell off when so many markets are cheap and when US not much higher than 2000.


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## galway_blow_in

joe sod said:


> Thats true. So where in general where would you be investing I know you said you were staying out until turmoil ends. The US looks like it is on the way down for now. But you also point out that it has not gained much since the year 2000 and also that american corporations have never been stronger. Also  european stocks are alot cheaper than the US and emerging markets and commodities have been decimated last 3 years. When you lay it out like that there doesn't seem much justification for the big sell off when so many markets are cheap and when US not much higher than 2000.



europe is looking terrible economically going forward , its a mess politically , completely divided on many issues , germany and the uk are the only major  economies which really  have a clue , the uk may leave  the eu and germany is too reliant on china , besides , european stocks are not near as cheap as many so called experts claim , they have always been cheaper historically than the u.s market , european equity markets have never continued higher while the u.s markets were heading lower , was the s+p to correct a further 10% , i think it would be a better buy than anywhere , i dont have much money in equities anymore full stop , il be making anual contributions gong forward in index funds , im not smart enough to spot terrific individual stocks , in the past ive either sold winners too early ( ryanair , glanbia , kerry , paddy power , smurfit kappa ) or bought stocks which were topping out ( ford , volkswagon )

i did do well by buying bank of ireland in 2012 however


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## joe sod

Yea but the point you made about the US not being much higher today than 2000 and other markets even cheaper than US. So 15 years have passed by where there have been bull markets and crashes especially in emerging markets but we are really at more or less same valuations as 15 years ago. I mean it's hardly the basis for all the over valuations of stock markets that we keep hearing. It seems that investors are going to have to deal with much more volatility than before even if investing in "safe" investments.


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## galway_blow_in

joe sod said:


> Yea but the point you made about the US not being much higher today than 2000 and other markets even cheaper than US. So 15 years have passed by where there have been bull markets and crashes especially in emerging markets but we are really at more or less same valuations as 15 years ago. I mean it's hardly the basis for all the over valuations of stock markets that we keep hearing. It seems that investors are going to have to deal with much more volatility than before even if investing in "safe" investments.



historically the average PE is 15 , its still above that as of yesterday , i dont think the s+ p has ever gone as long without a 20% correction either , bar perhaps the 1990,s


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## joe sod

Marc said:


> Markets transfer wealth from the impatient to the patient


But what do you mean by patient, I mean you could have to watch your investment drop by 50 percent . Is that being patient,or is sitting through a cyclical downturn lasting years being patient. There are a lot of catchy sound bites in investing but the trouble is when you try to apply them to specific situations.


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## Steven Barrett

galway_blow_in said:


> european markets have never continued to gain while u.s markets were floundering , european markets are followers so if the u.s enters a full blown bear market , europe will do the same
> 
> regarding investment advisors , a close relative of mine came into some money in 2006 having sold some farm land for nearly 20 k per acre , they planned on doing nothing for a few years and just put the money in savings for a year , one day they got a call from an irish life operative , this person then  actively pursued them for the following few months with endless phone calls and house calls  , encouraging them to invest in a fund etc , this relative of mine was fifty nine at the time , they got them to stick the money in an india and china fund which nine years later is worth less than it was in 2007 ( in the years prior to spring of 2007 , india and china funds had delivered huge returns ) , now luckily i had a chat with this person fifteen months into there investment with irish life  and they bailed ( a few months before the crash of 2008 really began in earnest )  and put everything back in cash , *not only was there a 5% per anum managment fee on the fund for the fifteen months they were invested  , there was an exit fee of 5% on top of that*  , this person invested 750 k and lost 50 k off the back of predatory banks but it wasnt just unethical , it was plain dumb , all they had to do when selling a product to someone near sixty was get them to put every penny in a bond fund
> 
> my point is , not only are most investment funds very bad value , more often than not , the advice is not particulary valuable



Not justifying the predatory advances of the advisor. One thing that really bugs me is the way the banks monitor people's bank accounts and if a large deposit is made, they have someone phoning to sell them an investment bond without even asking what they person's needs are. The factfind is a compliance document to them, not a method of finding out what is important to the client. 

Anyway, back to the charges! That 5% charge was the commission that the "advisor" got. it was a once off and not an annual fee. The India China fund is expensive though, you can expect to pay about 1.90% in annual fees for that fund. 

The early exit penalties are to protect the life company from people taking advantage of the bonus allocation rates they give and then transferring the money to another provider a week later. It should have been made clear to him at the time that while he can move funds within Irish Life, he cannot move his money out for the first 5 years. 


Steven
www.bluewaterfp.ie


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## galway_blow_in

well its pretty clear now that we are in a very significant downtrend , nothing is able to raise this market , europe rose strongly earlier off the back of potential chinese stimulus , the u.s opened up but is now negative , europe always follows the u.s so will sell off tomorrow morning


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## Gordon Gekko

joe sod said:


> But what do you mean by patient, I mean you could have to watch your investment drop by 50 percent . Is that being patient,or is sitting through a cyclical downturn lasting years being patient. There are a lot of catchy sound bites in investing but the trouble is when you try to apply them to specific situations.



Which is called turning a temporary loss of capital into a permanent one.

I can't remember the precise stat, but from memory a diversified investor in equities has never lost money EVER over a 15 year time horizon.


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## galway_blow_in

Gordon Gekko said:


> Which is called turning a temporary loss of capital into a permanent one.
> 
> I can't remember the precise stat, but from memory a diversified investor in equities has never lost money EVER over a 15 year time horizon.



true but anyone who sold out in 2006 and rebought as late as 2011 , was better off , buy and hold forever is the least clever way to grow wealth , thats not to say its dumb , dumb is selling and buying in a reactionary way depending on what the market is doing over a relatively short time


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## Sarenco

Gordon Gekko said:


> I can't remember the precise stat, but from memory a diversified investor in equities has never lost money EVER over a 15 year time horizon.



Well the total return of the DOW, with all dividends reinvested, was negative from 1929 to 1944 and that ignores investment costs and taxes.

More importantly, there have been 15 year periods where bonds (or even cash) outperformed stocks.  The first 15 years of this millenium is one example.

Don't get me wrong, I don't believe anybody can time the market with any accuracy.  The expected return on stocks is clearly higher than cash over any 15 year period but the risk is that this expected return may not materialise.


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## Gordon Gekko

The stats I'm referring to relate to the S&P...perhaps that accounts for the difference? I will post the exact stats tomorrow.


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## Fella

Why do people care so much if the price of their stocks are rising or falling ? If you are investing for a long time 10years + and you check price everyday and are happy because the price is rising all the time , the day before you take your cash out the market could crash and you lose all that happiness you gained! 
I can only think of a few reasons people care so much - they have put in too much money , they are trying to buy low sell high quick turnaround ( which is just gambling and likely you will lose ) or they are just not cut out for losing money . Most people are just terrible at losing money I see it all the time the difference between people who make it doing what I do and who don't is that most people can't take the mental side of losing. 
I'm losing tens of thousands I'm sure every time there is a drop in stocks but I was never taking the money out anyway till I retire or leave it to my children , but if my stocks treble in the morning I don't really care either , I have no use for the money that's why I invested it , I really think that's the key invest money you never plan on seen again if you need money for a new car or to pay your mortgage don't invest .


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## joe sod

Sarenco said:


> Well the total return of the DOW, with all dividends reinvested, was negative from 1929 to 1944 and that ignores investment costs and taxes.
> 
> More importantly, there have been 15 year periods where bonds (or even cash) outperformed stocks.  The first 15 years of this millenium is one example.
> 
> Don't get me wrong, I don't believe anybody can time the market with any accuracy.  The expected return on stocks is clearly higher than cash over any 15 year period but the risk is that this expected return may not materialise.



  so basically since 2000 bonds have outperformed stocks, So stocks are more not much higher than they were in 2000. Yet everybody is saying that stocks are way overvalued now after 15 years !! I know this point has been made already. The only answer that was given was that we are due a significant sell off because we have gone too long without one. So basically we have to have a sell off not because of mad overvaluation but because financial history decrees that a sell off must happen with a specified period of time (to fulfill the scriptures).


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## Sarenco

Well I'm certainly not saying that stocks are overvalued relative to any other investable asset class nor am I suggesting that it is inevitable that we are going to see a deeper drawdown than we have already over the coming months.

What I am suggesting is that nobody knows the future so the only logical thing to do is to try and determine your own need, willingness and capacity to hold risky assets and then stick to your guns over the medium to long term.  

Ignore the noise.


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## joe sod

Sarenco would you agree that investors today will have to deal with much more volatility and turbulence than before. I know the last few years were relatively calm. But we have had 2 big crashes in the last 15 years and now maybe a third one. With all the information people have access to its much more tempting to react to it especially when markets now frequently have above 3 percent daily moves which was a rarity before electronic trading.


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## Sarenco

I really can't predict the future Joe but, if history is any guide, I would be surprised if global stock markets were not more volatile over the next 5 years than has been the case over the most recent 5 years.  But I don't believe that should be a reason for anybody to change their investment plans.

If you are really worried about a sharp and prolonged drop in share prices then you shouldn't invest in equities in the first place.


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## TonyTT

joe sod said:


> Sarenco would you agree that investors today will have to deal with much more volatility and turbulence than before. I know the last few years were relatively calm. But we have had 2 big crashes in the last 15 years and now maybe a third one. With all the information people have access to its much more tempting to react to it especially when markets now frequently have above 3 percent daily moves which was a rarity before electronic trading.


 
The Gillen Markets Models have proven solid over time especially the model of investing in Low Price to Earnings equities on the FTSE 100 and his stock picks have proven very reliable except in the past two years where losses would likely have been incurred except fro the fall in the Euro against sterling. The question really is whether this is the time to take advantage of low prices and pile into the stocks he has picked or is value investing a useful model at all going forward?


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## joe sod

Japan, now negative interest rates, will the ECB be next to bring it in if they can't lift the euro economy. Where will people put their money now, it will cost you to hold cash.


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## galway_blow_in

joe sod said:


> Japan, now negative interest rates, will the ECB be next to bring it in if they can't lift the euro economy. Where will people put their money now, it will cost you to hold cash.



maybe they will invest in equities ( after equities have a very significant correction ) , the european financial index is now not far above where it was in the depths of the financial crisis , stocks in europe have not done much with QE or low interest rates , maybe pepople still think they are too expensive 

a repricing of assets might be on the cards , would tie in with this enviroment of deflation


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## joe sod

galway_blow_in said:


> maybe they will invest in equities ( after equities have a very significant correction ) , the european financial index is now not far above where it was in the depths of the financial crisis , stocks in europe have not done much with QE or low interest rates , maybe pepople still think they are too expensive
> 
> a repricing of assets might be on the cards , would tie in with this enviroment of deflation


So after all the money printing european equities are still overvalued after doing nothing for 10 years!! Surely the risky asset in that scenario is cash and not equities since cash has been consistently devalued but yet people still wish to hold onto cash. If equities are overvalued then what are they overvalued against hardly cash. Even the bond market has doubled in the last 10 years yet total equity capitalization has not changed in 10 years. If there is another sell off is it not ridiculous to dump equities for an asset that is being consistently devalued.


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## Sunny

The BOJ move is simply a copy of what the ECB has already done. The ECB already charges banks to deposit funds.


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## galway_blow_in

joe sod said:


> So after all the money printing european equities are still overvalued after doing nothing for 10 years!! Surely the risky asset in that scenario is cash and not equities since cash has been consistently devalued but yet people still wish to hold onto cash. If equities are overvalued then what are they overvalued against hardly cash. Even the bond market has doubled in the last 10 years yet total equity capitalization has not changed in 10 years. If there is another sell off is it not ridiculous to dump equities for an asset that is being consistently devalued.



Cash doesn't devalue in an era of deflation


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## joe sod

Now the US dollar reverses and weakens 4 percent in just 2 days. It doesn't look like they are going to raise interest rates after all. So now the US dollar is correcting , so where is the "next safe haven". If everything is correcting then maybe nothing is.


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## landlord

joe sod said:


> Now the US dollar reverses and weakens 4 percent in just 2 days. It doesn't look like they are going to raise interest rates after all. So now the US dollar is correcting , so where is the "next safe haven". If everything is correcting then maybe nothing is.





landlord said:


> and my new portfolio which includes gold related products including physical gold and gold/silver royalty companies like RGLD, FNV, SLW are doing well. I have taken a huge gamble on gold



Yesterday's results.....
RGLD up 12.84%
SLW up 4.68%
FNV up 3.09%
These are precious metal royalty companies. However they are extremely volatile.
and today's results...(5th Feb 2015)
RGLD up 9.13%
SLW up 5.29%
FNV up 2.67%


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## Agent 47

looks like you bailed at the right time Landlord, Gold at 1263$ yesterday dropping back slightly today


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## landlord

Minister Noonan phoned me the other day to ask advice on gold investments. 
He decided to follow my lead......

http://www.independent.ie/business/...n-euro-shares-to-invest-in-gold-31066811.html

Ha ha


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## joe sod

Does golds rise mean the dollar bull market is over for now and no interest rate rises, maybe relief for emerging markets and commodities. The world is really mixed up everyone talking about deflation yet a rush back into gold the traditional inflation hedge. Yet no real inflation as oil and commodities on the floor.


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## landlord

joe sod said:


> Does golds rise mean the dollar bull market is over for now and no interest rate rises, maybe relief for emerging markets and commodities. The world is really mixed up everyone talking about deflation yet a rush back into gold the traditional inflation hedge. Yet no real inflation as oil and commodities on the floor.



I believe the value of the dollar may strengthen slightly in the short term but will fall significantly in the medium to long-term.   Strength of the US economy relative to other economies is being greatly overstated at the moment. I have been closely following US fundamentals and apart from the labour market they do not look good at all.   The most bullish US economists are talking about three more rate rises,  most however believe one and done.  I believe ONE AND DOWN !  Negative rates and QE 4 will follow massively devaluing the dollar and the confidence in it.
Inflation is often described as an expansion of the money supply.  I believe QE 4 could potentially lead to serious inflation or hyperinflation. Great for gold!!

The trouble is as the US dollar collapses so does the value of my gold investments when converted back to euros.   I am continuing my gold investments however as a percentage of my complete portfolio of property and cash it is still fairly small.
At the moment it is fear that is driving gold upwards.


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## joe sod

Dont know why there has been such a big rise in stock markets the last few days on little news. It just shows you how ridiculous it is to try and put reason to it. Maybe things might calm down for a while now that they have got the hissy fit out of the way.


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## WorstPigeon

landlord said:


> Inflation is often described as an expansion of the money supply.



That's monetary inflation. If people are talking about it, they usually say "monetary inflation". Inflation as generally discussed is price inflation. Monetary inflation can cause price inflation (which is, when it comes to it, the usual purpose behind quantitive easing; central banks are trying to increase inflation to target levels), but it's not the only cause.



landlord said:


> I believe QE 4 could potentially lead to serious inflation or hyperinflation. Great for gold!!



Well, the Federal Reserve will no doubt be very happy if it causes some inflation; that's what they would be doing it for... No particular reason to think it would cause hyperinflation; previous rounds certainly didn't (US inflation has on average been below target rates since 2012).


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## galway_blow_in

joe sod said:


> Dont know why there has been such a big rise in stock markets the last few days on little news. It just shows you how ridiculous it is to try and put reason to it. Maybe things might calm down for a while now that they have got the hissy fit out of the way.



two reasons

1. market was very over sold , especially banks

2. likelihood of an oil production cut from saudi , russia and iran  , markets were in lockstep with oil since the start of the year


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## landlord

I lost about 11 grand on my original portfolio after I sold. (11% loss)
I reinvested only 40% of that original investment in gold mining stocks and am now up 11 grand (25% gain).  Myself and a colleague subscribe to a professional website for help on picking the right gold stocks.  I intend to keep making regular monthly payments in this asset class.
Although I fundamentally believe in the potential strength of gold I have to admit I do find it interesting if not a little surprising in that gold has maintained its shine despite the stock market rebounding in the last few weeks. There must be still an element of fear out there?  In fact it seems very unusual that recently most asset classes would all rise together, for example, equities, bonds, commodities and gold. What exactly is money coming out of ?...... Bank accounts (cash)?


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## joe sod

maybe commodities have finally bottomed, which is good for gold. Every central bank is printing money and devaluing their currency so why would any right minded person hold cash for any length of time, so thats good for gold and assets. They know the US cant raise interest rates very much very good for gold i suppose. And then there is negative interest rates so deflation will simply not be allowed. Everyone thought it was 2008 again so there was panic selling, so once the market got its technical sell off out of the way then things could go back to normal.


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## joe sod

you have had a good run with gold the last few months, but its tempting to stick with a winner but maybe you should be diversifying into other assets also. You did well to pick gold at a bottom but say you had  bought gold 2 years ago you would be just getting back some of your losses now, but would you have been prepared to watch your investment drop during those two years. Also your philosophy for investing in gold was it not true two years ago also but you would have been losing money, thats the hardest thing are you correct or is the market correct.


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## Fella

landlord said:


> I lost about 11 grand on my original portfolio after I sold. (11% loss)
> I reinvested only 40% of that original investment in gold mining stocks and am now up 11 grand (25% gain).  Myself and a colleague subscribe to a professional website for help on picking the right gold stocks.  I intend to keep making regular monthly payments in this asset class.
> Although I fundamentally believe in the potential strength of gold I have to admit I do find it interesting if not a little surprising in that gold has maintained its shine despite the stock market rebounding in the last few weeks. There must be still an element of fear out there?  In fact it seems very unusual that recently most asset classes would all rise together, for example, equities, bonds, commodities and gold. What exactly is money coming out of ?...... Bank accounts (cash)?



I think your going to drive yourself mad of the years and chop and change often , you had a great plan at the start imo, when your shares lost loads you bailed out and probably over read the Internet , Id really advise you to forget all the noise and just go back to your plan originally holding a basket of shares , top it up regularly and forget it . A lot of what I read from you sounds like your gambling , subscribing to a professiona website ( waste of money imo) . 
I say this not to offend you , you helped loads for me here and I think your a good guy but I can see you going demented trying to figure out how world works and why gold is worth x today , long term I fear you might look book and think if only I didn't sell at 11k loss, it be worth x more than my gold investments . 
All the best anyway


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## Joey101

Landlord, out of interest, can I ask what you subscribe to?


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## landlord

Point taken Fella, but every fibre in my being has been telling me the last few months that gold is on the way up and that we are in the dwindling stages of a 6 year equity bull run.
I am only 35% invested in gold stocks at the moment, the rest is cash.
I would most definitely reinvest in my original portfolio at some time when I see better value.  Yes this is gambling......and yes this is timing the market.  I might get lucky I might not but it just feels right.

Joey 101.......GSA    Gold Stock Analyst.


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## galway_blow_in

landlord said:


> Point taken Fella, but every fibre in my being has been telling me the last few months that gold is on the way up and that we are in the dwindling stages of a 6 year equity bull run.
> I am only 35% invested in gold stocks at the moment, the rest is cash.
> I would most definitely reinvest in my original portfolio at some time when I see better value.  Yes this is gambling......and yes this is timing the market.  I might get lucky I might not but it just feels right.
> 
> Joey 101.......GSA    Gold Stock Analyst.



i used to go with my gut quite a bit when i owned quite a sizeable value of stocks , i was nearly always wrong , maybe your smarter ( not being smart with that comment ) , your percentage in gold is higher than most recommend but gold might be in an upturn , its been in a bear market since 2011


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## joe sod

the worst performing sectors last year, gold, commodities and emerging markets have been the best so far this year. But then they were absolutely devastated last year. It just proves how irrational markets can become and when these markets form a bottom the doom and scaremongering accelerates and this has been proved yet again.


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## galway_blow_in

joe sod said:


> the worst performing sectors last year, gold, commodities and emerging markets have been the best so far this year. But then they were absolutely devastated last year. It just proves how irrational markets can become and when these markets form a bottom the doom and scaremongering accelerates and this has been proved yet again.



energy ( especially ) was shorted to an inch of its life all last year and until the middle of january of this year , while there might be a situation developing where production is capped to some degree , the rally in energy this year may be more about short covering than anything else , would not be surprised if energy has seen the highs of the year which isnt to say we drop lower either


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## joe sod

galway_blow_in said:


> energy ( especially ) was shorted to an inch of its life all last year and until the middle of january of this year , while there might be a situation developing where production is capped to some degree , the rally in energy this year may be more about short covering than anything else , would not be surprised if energy has seen the highs of the year which isnt to say we drop lower either



maybe but commodities and emerging markets have been going down since 2011, the panic in january actually made the market finally bottom is the view now. You are right it has been a big rally back up again but only because the shorts were wrong to keep shorting when oil was at one of its lowest prices historically (inflation adjusted). But surely even though volatile would you not be at least dipping into emerging markets now. Everyone was talking about emerging markets being the future 10 years ago, now nobody is saying this. I read a good analysis of market mentality being like a person that can only hold one thought in his head at any one time.


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## joe sod

what happened the bear market, i think talk of negative interest rates killed it off. Maybe should revisit the reasons for the january panic, (i dont mean the obvious stuff) now that things are calm again. But it was very extreme and very fast but now sort of forgotten about


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## galway_blow_in

joe sod said:


> what happened the bear market, i think talk of negative interest rates killed it off. Maybe should revisit the reasons for the january panic, (i dont mean the obvious stuff) now that things are calm again. But it was very extreme and very fast but now sort of forgotten about



well we could still very well be in a bear market , bear rallys happen during bear markets , while the usa didnt drop 20% , the bulk of european  countries did


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## joe sod

Ive had a pretty good year so far, Ive recovered a lot of losses as commodities and emerging markets have been leading the recovery. But Im still down compared to January 2015 but not by much. But Im steadily moving into investment trusts as I see now the mistakes I was making by putting too much money into risky and volatile assets.


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## landlord

joe sod said:


> Ive had a pretty good year so far, Ive recovered a lot of losses as commodities and emerging markets have been leading the recovery. But Im still down compared to January 2015 but not by much. But Im steadily moving into investment trusts as I see now the mistakes I was making by putting too much money into risky and volatile assets.



Just heard that the oil freeze/cut deal has collapsed (surprise surprise). To be honest I think just the month long talk about this deal has caused oil to rally. I suspect that the price of oil will fall heavily tomorrow and commodities and stocks will follow.
My gold stock portfolio has gained 36% !!!! I am now 50% invested.
I just hope people don't trade gold as a commodity.


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## joe sod

landlord said:


> Just heard that the oil freeze/cut deal has collapsed (surprise surprise). To be honest I think just the month long talk about this deal has caused oil to rally. I suspect that the price of oil will fall heavily tomorrow and commodities and stocks will follow.
> My gold stock portfolio has gained 36% !!!! I am now 50% invested.
> I just hope people don't trade gold as a commodity.


Yea there has been falls alright but thats commodities for you, they only fell back to where they were a week ago anyway. The bigger thing was the earthquake in japan that hit japanese stock market hard. But then there is good news from Brazil that they are going to impeach dilma roussef, who has been a disaster for the brazilian economy. So that is good for a big emerging market.


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## cremeegg

You have got to be kidding.

How can the collapse of the most stable democratic government Brazil has seen be a good thing.

What makes you think something better will replace Roussef. Many people had supported the Lula/Roussef governments on the basis of integrity and competence. Now that this is seen to be unfounded and there is a mass of angry voters. 

Turmoil and anarchy are more likely than any improvement.


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## joe sod

Brazil would have been in much better shape had aecio neves won the 2014 election rather than roussef. This has been borne out by events as roussef was using state companies like petrobras as a piggy bank. It doesn't matter anyway the market has been selling brazil ever since she was elected. I also have an ishares japan etf I was expecting to see a big sell off what with the earth quake and now the mitsubishi scandal. I was pleasantly surprised and dumbfounded to find that it is up strongly over the week. Maybe it is best to leave your brains outside when investing most of it makes no sense at all. Afterall with the volkswagon scandal the whole german market fell 4% yet with this scandal japan is up.


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## galway_blow_in

landlord said:


> I only started studying the stock market at the start of this year. So would still most definitely consider myself a rookie. I invested a large lump sum at the start of August and lost just over 10% within three weeks and about 12% when I sold last week. (Mid sept 2015).
> After a six year bull run I believed when I started investing in early August that the equities market had a year or two to go before it peaked and this may still be true. My goal was a 15 year long term investment.
> It is said that the long-term investor should not try to time the market and sure, had I left my funds alone for 15 years I probably would have beaten deposit rates by a descent margin. But it just doesn't make sense to me to continue investing at the top or close to the top of a 6 year bull run, especially when there are so many negative indicators, both politically and economically. Stocks are massively overpriced and there currently seems to be tremendous economic instability. Statistical history suggests that this bull market may end fairly soon, so it seems logical to wait for better value.
> I would hope within a year or two my original chosen funds would have dropped in value to a point below or significantly below what they are at now. (But who knows).
> As for the timing of my exit, I did consider hanging in for a bit longer to at least try to recover my losses and at best pull out closer to the peak of the current bull run. (Greed?)
> However after several restless nights concerned over when exactly that peak will be, I started to think to myself what would I do if the market suddenly dropped 5 or 10% in one day, well probably the same as most investors and consider the drop to be a temporary blip and wait for the rally the following day, potentially suffering an even greater loss if it's a genuine crash. After all the volatility in the markets in the last few weeks has frequently seen 2 to 3% falls and rises in the main indices in a single day. However I suspect a true crash would likely catch many including myself by surprise.
> 
> As Rory Gillen says in his book 3 steps to investment success (A great book I have to say), "Avoid letting volatility interrupt your savings or investment plan. I personally psychologically couldn't handle this volatility even though I had a 15 year long term investment plan. I suspect I would have handled it much better at the end of a 6 year bear run as opposed to the end of a 6 year bull run.
> I am aware that I have possibly made a stupid rookie mistake and converted what may have been a temporary loss into a permanent loss. However perhaps I have saved a small fortune. Only time will tell. But either way I would prefer to bail out a year or two early then a day too late.





landlord said:


> I only started studying the stock market at the start of this year. So would still most definitely consider myself a rookie. I invested a large lump sum at the start of August and lost just over 10% within three weeks and about 12% when I sold last week. (Mid sept 2015).
> After a six year bull run I believed when I started investing in early August that the equities market had a year or two to go before it peaked and this may still be true. My goal was a 15 year long term investment.
> It is said that the long-term investor should not try to time the market and sure, had I left my funds alone for 15 years I probably would have beaten deposit rates by a descent margin. But it just doesn't make sense to me to continue investing at the top or close to the top of a 6 year bull run, especially when there are so many negative indicators, both politically and economically. Stocks are massively overpriced and there currently seems to be tremendous economic instability. Statistical history suggests that this bull market may end fairly soon, so it seems logical to wait for better value.
> I would hope within a year or two my original chosen funds would have dropped in value to a point below or significantly below what they are at now. (But who knows).
> As for the timing of my exit, I did consider hanging in for a bit longer to at least try to recover my losses and at best pull out closer to the peak of the current bull run. (Greed?)
> However after several restless nights concerned over when exactly that peak will be, I started to think to myself what would I do if the market suddenly dropped 5 or 10% in one day, well probably the same as most investors and consider the drop to be a temporary blip and wait for the rally the following day, potentially suffering an even greater loss if it's a genuine crash. After all the volatility in the markets in the last few weeks has frequently seen 2 to 3% falls and rises in the main indices in a single day. However I suspect a true crash would likely catch many including myself by surprise.
> 
> As Rory Gillen says in his book 3 steps to investment success (A great book I have to say), "Avoid letting volatility interrupt your savings or investment plan. I personally psychologically couldn't handle this volatility even though I had a 15 year long term investment plan. I suspect I would have handled it much better at the end of a 6 year bear run as opposed to the end of a 6 year bull run.
> I am aware that I have possibly made a stupid rookie mistake and converted what may have been a temporary loss into a permanent loss. However perhaps I have saved a small fortune. Only time will tell. But either way I would prefer to bail out a year or two early then a day too late.




you must be doing nicely these days landlord , what with the way you diversified into precious metals before the current gold rally ?


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## landlord

galway_blow_in said:


> you must be doing nicely these days landlord , what with the way you diversified into precious metals before the current gold rally ?



Doing ok yes. Portfolio risen by 44%. 
I think gold (and gold stocks) might be in for a correction soon as they are overbought, but I am not selling anything. The volatility is extreme!! But I  still think we are just at the start of a new gold bull run. Time will tell. 
I am far more heavily invested in Irish rental property and am hoping the government will do something to address  the pressure on landlords to sell their properties due to the excessive taxes!!!


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## galway_blow_in

landlord said:


> Doing ok yes. Portfolio risen by 44%.
> I think gold (and gold stocks) might be in for a correction soon as they are overbought, but I am not selling anything. The volatility is extreme!! But I  still think we are just at the start of a new gold bull run. Time will tell.
> I am far more heavily invested in Irish rental property and am hoping the government will do something to address  the pressure on landlords to sell their properties due to the excessive taxes!!!



your not a trader so if there is a short term pullback , what of it , the sector was in a bear market since 2011 so its due a recovery , precious metals are not a very long term hold however , over a multi decade period , gold underperforms , a new bull market could run for a few years though

on a different note , id like your opinion on something , ive about thirty grand i could invest right now , rather than borrowing another thirty and buying a student village apartment near UL in limerick , im of mind to instead invest the 30 k in a REIT , i wont name the company - listed REIT as its against the charter but its a company which caters to the nursing home area in the usa so its dollar denominated , its a company worth around six billion presently so mid cap but has thousands of facilities in the usa and a good few in the uk  , the yield is currently 7.5% as its near its 52 week low ( the threat of the fed raising rates is negative for REIT,s but it might be priced in ) , my instinct tells me putting 30 k in this REIT is a better idea than borrowing another 30 k to buy actual bricks and mortar , i know my view is outside the box thinking but i can sell the position if i chose , as for dollar to euro considerations , could work against me but the dollar is not going to 1.75 or anything in the next number of years


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## joe sod

galway_blow_in i thought you were the expert. You were pointing out everyone else's mistakes I thought from superior knowledge. Surely at this stage investing in US specific assets in euros is a mistake after the big appreciation of the dollar against the euro. Many US investors are doing the opposite investing in europe, they see that europe has been in the doldrums for years and at that some stage especially with cheap euro, europe will finally get some sustained growth. They see it as a slam dunk buying cheap europe with expensive dollars. Afterall the reason why gold, emerging markets and commodities have rebounded is that investors have concluded that the big appreciation in the dollar is done. Would you not be better doing something simple like buying an emerging market or europe etf, or else simply an irish or maybe spanish reit.


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## galway_blow_in

joe sod said:


> galway_blow_in i thought you were the expert. You were pointing out everyone else's mistakes I thought from superior knowledge. Surely at this stage investing in US specific assets in euros is a mistake after the big appreciation of the dollar against the euro. Many US investors are doing the opposite investing in europe, they see that europe has been in the doldrums for years and at that some stage especially with cheap euro, europe will finally get some sustained growth. They see it as a slam dunk buying cheap europe with expensive dollars. Afterall the reason why gold, emerging markets and commodities have rebounded is that investors have concluded that the big appreciation in the dollar is done. Would you not be better doing something simple like buying an emerging market or europe etf, or else simply an irish or maybe spanish reit.



you might be kind enough to drag up some links to where i was busy "  pointing out everyone else,s mistakes "  but for now im happy to  focus on the content of my last post 

none of the irish REIT,s pay close to a half decent dividend , beit green , hibernian or the others , not even close to 3% , an emerging market etf does pay a decent dividend but most would view emerging markets as being higher risk than american REIT,s and besides a recovery in emerging markets is nearly always  tied to a weak dollar so  that sort of flies in the face of your warnings of not buying into dollar assets with euro right now  , can you point to any spanish REIT,s ? , sounds interesting but perhaps  quite niche


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## joe sod

galway_blow_in said:


> you might be kind enough to drag up some links to where i was busy "  pointing out everyone else,s mistakes "  but for now im happy to  focus on the content of my last post
> 
> none of the irish REIT,s pay close to a half decent dividend , beit green , hibernian or the others , not even close to 3% , an emerging market etf does pay a decent dividend but most would view emerging markets as being higher risk than american REIT,s and besides a recovery in emerging markets is nearly always  tied to a weak dollar so  that sort of flies in the face of your warnings of not buying into dollar assets with euro right now  , can you point to any spanish REIT,s ? , sounds interesting but perhaps  quite niche



Im not having a go at you galway because I think all contributions are good. In fact i think there is too little comment on this topic of investments in general. Im no expert but I think the big move in the dollar has already happened and I think it will gyrate around its current level for some time, afterall the dollar was as low as 1.50$ against the euro a few years ago. Therefore that was the time to invest in US specific assets, of course many US corporations are global so not such an issue with them. As for irish and spanish reits, they are in expansion mode in other words they are not paying dividends as they are buying properties in distressed markets. The Us reits are mature but they have also already benefited from the rebound in US propery market since 2008. As for emerging market etf, I think the risk is gone because they have already been crucified by the market and the appreciation in the dollar was a killer but that has already played out, therefore this is a low risk time I know because I was way too early and my investments really suffered last year. Maybe wait until after brexit vote as if that goes wrong way there will be another big hiccup


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## galway_blow_in

joe sod said:


> Im not having a go at you galway because I think all contributions are good. In fact i think there is too little comment on this topic of investments in general. Im no expert but I think the big move in the dollar has already happened and I think it will gyrate around its current level for some time, afterall the dollar was as low as 1.50$ against the euro a few years ago. Therefore that was the time to invest in US specific assets, of course many US corporations are global so not such an issue with them. As for irish and spanish reits, they are in expansion mode in other words they are not paying dividends as they are buying properties in distressed markets. The Us reits are mature but they have also already benefited from the rebound in US propery market since 2008. As for emerging market etf, I think the risk is gone because they have already been crucified by the market and the appreciation in the dollar was a killer but that has already played out, therefore this is a low risk time I know because I was way too early and my investments really suffered last year. Maybe wait until after brexit vote as if that goes wrong way there will be another big hiccup



did you know that the vanguard emerging markets etf ( VWO ) has a PE of 12.7   a PB of 1.43 and a price sales of 1.16  for the average holding

the german etf ( EWG ) with ishares  has a PE of 13.68 , a PB of 1.44 and a price sales of 0.74 for the average holding

maybe thats irrelevant , jim from switzerland told me a long time ago that the iseq having a PE of 20 is no more pricey than the DAX having a PE 25% lower than that so maybe im not comparing like with like

my instinct however tells me that germany is lower risk than emerging markets and thats ignoring the fact that germany uses the euro


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## joe sod

fair enough, germany is probably safe enough and has had a bit of a pullback with all the europe troubles. However Germany is very exposed to emerging markets and was particularly hit by the sanctions on Russia as German companies have big investments in Russia. So investing in Germany you are getting some exposure to emerging markets anyway. Im just giving my opinion its not an expert opinion or anything. I have some iShares country specific investments in Italy, Poland and Japan, none have been blockbusters or anything and I am a bit underwater with the Poland one, I also have VWO and I am actually most confident about that one. Its a pity more people would not join in this thread to give more opinion.


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## galway_blow_in

landlord said:


> Point taken Fella, but every fibre in my being has been telling me the last few months that gold is on the way up and that we are in the dwindling stages of a 6 year equity bull run.
> I am only 35% invested in gold stocks at the moment, the rest is cash.
> I would most definitely reinvest in my original portfolio at some time when I see better value.  Yes this is gambling......and yes this is timing the market.  I might get lucky I might not but it just feels right.
> 
> Joey 101.......GSA    Gold Stock Analyst.



how are you getting on landlord these days , gold took a surprising downturn since trump got elected , i guess the experts dont know as much as they think they do , they called the election for clinton and predicted gold would rise if trump did happen to wn 

massive sell off since mid week in precious metals


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## TheBigShort

Investing should be viewed from the perspective of gambling. No-one can tell the future. A simple strategy is to find a stock you believe is cheap, reasonably priced and has growth potential. Avoid all analysts and commentary. For each bull there is a bear. Go with your own instinct. Chances are, if you have done some homework on the stock , and you are of average intelligence, you will be ok long term.
I say this as someone who invested on the advice of brokers, followed commentary of 'experts' and ended up with -97% loss.
Nevertheless, it has been my greatest education (that, and alcohol does not hold the answers). 
Since then ive made some modest investments, all holding their own. Plenty of opportunities that I would have been interested in have passed me by (due to lack of funding). Food companies are of particular interest to me these days.


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## dub_nerd

I've heard some investors say they like it when there is volatility in the markets. Presumably because they can "buy the dips". This seems to be totally at odds with the mantra that "you can't time the market". Can anyone explain this disparity? I am pretty new to investing except for my pension, which I have seen performing fairly miserably for periods of years at a time.

Earlier this year I tried the "buy the dips" approach for myself. I have completely ignored the advice to spread risk over a large portfolio -- I've seen the entire market move with investor sentiment too often to believe in that. In fact, I like it that everything is much more sentiment driven than people seem to claim. A strongly rising market would be bad news for my approach.

I take short term punts on usually large cap stocks (although a couple of riskier ones too). I do a minimum of stock research although I do keep track of relevant news. The movements I am interested in have nothing to do with long term value. I stay invested for a few days or a couple of weeks at most. I have bought and sold the same small range of stocks repeatedly (although I am always on the lookout for more) but I only hold one or two at a time. I am up about 20% in six months, even though the stocks I have bought have gone pretty much nowhere overall in that period.

Would appreciate advice from anyone who can tell me why I'm likely to get burned in the long run. There's probably even a name for the approach (perhaps "the Fool's Errand" ). It's hardly likely I've hit on some magic formula that everyone else has missed. I can see all sort of reasons myself why my approach is risky, and a couple of individual buys have gone badly. But on the upside: a) I spend more time entirely out of the market than in; there's a corresponding chance I could miss any general market decline -- an infinitely better chance than with a buy-and-hold strategy, b) I invest a modest percentage of my assets (c. 10%) -- it seems less risky to aim for double-digit returns on this than low single digit returns on, say, 90% of my assets. At any one time I have less invested, and often nothing at all, compared to someone with a long term broad portfolio.


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## RichInSpirit

@dub_nerd.
You are the expert. Trust yourself.


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## Jim2007

dub_nerd said:


> I've heard some investors say they like it when there is volatility in the markets. Presumably because they can "buy the dips". This seems to be totally at odds with the mantra that "you can't time the market".



You can't time the market, but you can take advantage of opportunities the market throws up, if you are investing in individual stocks.  Value investors usually have a list of a half dozens stock or so that they have researched and valued.  They then wait until the stock prices is about 60% of their valuation before buying and volatility throws up those opportunities.  It's like buying groceries - you stock up when things are on sale.



dub_nerd said:


> Would appreciate advice from anyone who can tell me why I'm likely to get burned in the long run. There's probably even a name for the approach (perhaps "the Fool's Errand" ).



It's called day trading!  No one can tell you if or why you'll get burned.  You may be lucky and call enough deals correctly to make money over the long term or may be not.  At the end of the day it is your money.


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## dub_nerd

RichInSpirit said:


> @dub_nerd.
> You are the expert.


Definitely not!



Jim2007 said:


> You can't time the market, but you can take advantage of opportunities the market throws up, if you are investing in individual stocks.  Value investors usually have a list of a half dozens stock or so that they have researched and valued.  They then wait until the stock prices is about 60% of their valuation before buying and volatility throws up those opportunities.  It's like buying groceries - you stock up when things are on sale.



So: a) how does that work out for them in general? b) why doesn't everyone do it?

Indeed, why are there different approaches at all? Some people seem to think you should just buy continually because everything goes up in the long run. I was genuinely shocked to discover that some other people draw lines on squiggly stock history graphs and pretend to be identifying trends. (I've heard them called "chartists"?). Since it looks about as useful as reading chicken entrails I presume they make money by selling their prognostications to others.


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## Jim2007

dub_nerd said:


> Definitely not!
> 
> 
> 
> So: a) how does that work out for them in general? b) why doesn't everyone do it?
> 
> Indeed, why are there different approaches at all? Some people seem to think you should just buy continually because everything goes up in the long run. I was genuinely shocked to discover that some other people draw lines on squiggly stock history graphs and pretend to be identifying trends. (I've heard them called "chartists"?). Since it looks about as useful as reading chicken entrails I presume they make money by selling their prognostications to others.



[broken link removed] - a good starting point.  There are may approaches to investing, but ones based around the concept of value tend to work well.


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## galway_blow_in

dub_nerd said:


> Definitely not!
> 
> 
> 
> So: a) how does that work out for them in general? b) why doesn't everyone do it?
> 
> Indeed, why are there different approaches at all? Some people seem to think you should just buy continually because everything goes up in the long run. I was genuinely shocked to discover that some other people draw lines on squiggly stock history graphs and pretend to be identifying trends. (I've heard them called "chartists"?). Since it looks about as useful as reading chicken entrails I presume they make money by selling their prognostications to others.



many ( if not most )  would say charts are crucial if your a day trader , for example if a stock has been dropping for quite a while and appears to be in a downtrend , when a short term rally occurs , traders will often assume resistance will occur at either the 50 , 100 or 200 day moving average , on the downside they will try and identify where support is , again the moving averages are looked at , they will also be conscious of relative strength and volume of trade beit on an up day or down day , its not a sure fire way but its often relevant


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## dub_nerd

galway_blow_in said:


> many ( if not most )  would say charts are crucial if your a day trader , for example if a stock has been dropping for quite a while and appears to be in a downtrend , when a short term rally occurs , traders will often assume resistance will occur at either the 50 , 100 or 200 day moving average , on the downside they will try and identify where support is , again the moving averages are looked at , they will also be conscious of relative strength and volume of trade beit on an up day or down day , its not a sure fire way but its often relevant



I guess the question is _how_ often? Are there any objective analyses of these approaches, counting the times they are successful and the times they are not? That should be very straightforward to do with historical data. I'm not poking holes, I'm genuinely interested, but a big believer in solid objective evidence. My current skepticism is based on merely anecdotal evidence: I've seen people give incredibly detailed and technical sounding forecasts, along with caveats that they fall back on when they get it completely wrong; I've seen a ton of online technical analysis where the articles are clearly computer generated, and presumably just generating advertising clicks for some enterprising person; my main reason is that there's absolutely no _a priori_ reason to believe all this stuff about moving averages etc. It's the sort of thing that might be a self-fulfilling prophecy if enough people believe in it. But then it's unlikely to be a winning strategy, since  it seems to me you rarely want to be doing what everyone else is.


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## dub_nerd

Jim2007 said:


> [broken link removed] - a good starting point.  There are may approaches to investing, but ones based around the concept of value tend to work well.


That looks useful, will have a read, ta.


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## galway_blow_in

dub_nerd said:


> I guess the question is _how_ often? Are there any objective analyses of these approaches, counting the times they are successful and the times they are not? That should be very straightforward to do with historical data. I'm not poking holes, I'm genuinely interested, but a big believer in solid objective evidence. My current skepticism is based on merely anecdotal evidence: I've seen people give incredibly detailed and technical sounding forecasts, along with caveats that they fall back on when they get it completely wrong; I've seen a ton of online technical analysis where the articles are clearly computer generated, and presumably just generating advertising clicks for some enterprising person; my main reason is that there's absolutely no _a priori_ reason to believe all this stuff about moving averages etc. It's the sort of thing that might be a self-fulfilling prophecy if enough people believe in it. But then it's unlikely to be a winning strategy, since  it seems to me you rarely want to be doing what everyone else is.



objective evidence and fundamentals are not enough for day trading , often the market is in a risk off mood and the only way to make money is to short , this means even rock solid companies go down in price , ive tried trading in and out of stocks in the past and made money for a while but eventually i realised im not smart enough to beat the likes of a long term hold index fund 

i dont have much money in stocks these days so for fun i occasionally buy options , can be a white knuckle ride around earnings


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## Rory T Gillen

username123 said:


> Hi Brendan,
> Could you elaborate a little on your opinion about DCA above? Do you think it's nonsense due to fees, time taken to invest the lump sum or otherwise?
> Thanks


In my view, dollar or euro cost averaging is a powerful tool in stock markets, but it is best suited to the person who can save over time, the person who does not have a lump-sum. If you are earning and can save a portion of your earnings then consistently adding monies to an investment programme, in good times and bad, is akin to euro-cost averaging. But you must implement your plan consistently, both in down market conditions as well as up. As Brendan points out, euro-cost averaging is not much use if you have a lump-sum and cannot add to it over time. The lump-sum investor must understand how to value an asset, and buy at least reasonable value. If you are not comfortable valuing an asset then there's the option to buy a global equity index ETF and hold for the long-term. But you must take a 5-10 year view as what happens in between is unpredictable.


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## sunnydonkey

Jim2007 said:


> It's called day trading!  No one can tell you if or why you'll get burned.  You may be lucky and call enough deals correctly to make money over the long term or may be not.  At the end of the day it is your money.



Day trading is gambling, not investing. If you go to the casino and keep putting everything on red or black, someday your luck will run out. Daytrading, gambling on irrational market movements, is the same.


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## dub_nerd

galway_blow_in said:


> objective evidence and fundamentals are not enough for day trading , often the market is in a risk off mood and the only way to make money is to short , this means even rock solid companies go down in price , ive tried trading in and out of stocks in the past and made money for a while but eventually i realised im not smart enough to beat the likes of a long term hold index fund



I think you misunderstood me. I wasn't asking if day traders are using objective evidence, but whether there is objective evidence that the "chartist" approach works for them. That's just a matter of collecting data about people using it and how they fared. It seems to me that any approach that is not in some way "value-based" must be a zero-sum game for all market participants. So then it becomes an arms race to find the best algorithms. Even if you find them, somebody's eventually going to come along with better ones and eat your lunch.



sunnydonkey said:


> Day trading is gambling, not investing. If you go to the casino and keep putting everything on red or black, someday your luck will run out. Daytrading, gambling on irrational market movements, is the same.



I think that's the wrong analogy. There are two reasons why you might lose all your money by betting on red or black: 1) in a random sequence there will be arbitrarily long runs of any given value (i.e. wins or loses) so unless you have an infinite amount of money, you will be wiped out, 2) the odds are tipped against you because every now and again the result comes up green and everyone loses.

I think the first of these is the one covered by the adage that "the markets can stay irrational for longer than you can stay solvent". The second does not apply to markets -- they go up in the long run, otherwise even people who engaged in buy-and-hold would eventually lose. A roulette analogy would be if everyone _wins_ when green comes up, so there is a slight edge in staying in the game.

I guess people who do anything other than buy-and-hold are trying to extract more value from the market than just the average increase. Does anybody manage it, and how is it done? Even if we dismiss day traders, there must be people who believe it can be done, otherwise there would be no fund managers and people willing to buy into their funds. (I'm aware of the statistic that most fare no better than market indices).

One hypothesis I'm interested in is whether a less aggressive approach to finding value is possible. Day traders, according to the previous poster, have to short stocks if they can find nothing to go long on. Fund managers have to keep trading -- that, after all, is what they are paid for. I've even read about ones that know the markets are generally over-valued but "it's the only game in town". With one or two notable exceptions, none of them ever say "right, it's time to exit the market for the time being".

I, on the other hand, can take it or leave it. So far I've bought things that look to have dropped for reasons that have nothing to do with value. I wouldn't be an expert on valuing a stock, but I know when something goes down without any apparent associated bad news. I don't fixate on 50 day moving averages etc. If I can't find anything to trade, I'm happy to stay away completely and that's what I've done for 50% or more of the time. I'm in the lucky position of having low income requirements compared to my assets.

I feel more comfortable dipping in and out. If the market is -- as some people claim -- generally overvalued, isn't it the buy-and-hold approach that must suffer in the medium term for new entrants?  (For anyone who's read the whole thread, that brings us right back to where the OP began).


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## Firefly

TheBigShort said:


> I say this as someone who invested on the advice of brokers, followed commentary of 'experts' and ended up with -97% loss.



Sounds like some of the shares I've bought too in the past! Indeed the only shares that have done well for me are those I received for nothing as part of an IPO.


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## Fella

dub_nerd said:


> I think you misunderstood me. I wasn't asking if day traders are using objective evidence, but whether there is objective evidence that the "chartist" approach works for them. That's just a matter of collecting data about people using it and how they fared. It seems to me that any approach that is not in some way "value-based" must be a zero-sum game for all market participants. So then it becomes an arms race to find the best algorithms. Even if you find them, somebody's eventually going to come along with better ones and eat your lunch.
> 
> .



I've made my money on markets similar to stock markets, mostly it's a zero sum game but to make money you need to have an edge. I think there is value there for the quick minded who are up on the news constantly and understand the implications of world events on the stock market. I remember when I was trading sports I was constantly "on" watching for news trading future events and I had dedicated twitter feeds so I had all the information as quick as possible. I imagine day traders are doing similar and then you pick up skills by remembering what happened specific stocks at last opec meeting or last time interest rates rose in uk etc. You would have to constantly watch these things along with earnings reports and announcements from big companies and be ready to pounce ready to take the value early and then trade back in or out later when the information is known by all.
I sometimes think about the value im giving away , like when brexit was happening I haven't the inclination to trade so I just sit on all my holdings knowing they are going to crash in value , i'm sure the quickest traders made lots of money shortening stocks etc but they are ready they have systems in place. I don't and I don't want to put in that effort.


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## dub_nerd

Fella said:


> I've made my money on markets similar to stock markets, mostly it's a zero sum game but to make money you need to have an edge. I think there is value there for the quick minded who are up on the news constantly and understand the implications of world events on the stock market. I remember when I was trading sports I was constantly "on" watching for news trading future events and I had dedicated twitter feeds so I had all the information as quick as possible. I imagine day traders are doing similar and then you pick up skills by remembering what happened specific stocks at last opec meeting or last time interest rates rose in uk etc. You would have to constantly watch these things along with earnings reports and announcements from big companies and be ready to pounce ready to take the value early and then trade back in or out later when the information is known by all.
> I sometimes think about the value im giving away , like when brexit was happening I haven't the inclination to trade so I just sit on all my holdings knowing they are going to crash in value , i'm sure the quickest traders made lots of money shortening stocks etc but they are ready they have systems in place. I don't and I don't want to put in that effort.



Thanks Fella, I always pay attention to your posts as you sound like someone with a head for these things from previous postings. You've pretty much summarised what I've been doing for six months. I have a calendar of planned announcements from the Fed, the ECB and BoJ. I watch US jobs figures (even though I don't trade US stocks). I track OPEC meetings and EIA and IEA production and inventory forecasts. It's not that I'm especially interested in those things for themselves, but oil prices and the prospects for QE seem to be good guides to what the markets will do. I do a check on the Asian markets at 1 am each night, as a possible guide to sentiment for Europe. I also used Brexit volatility to get a good price on a UK Investment Trust that I wanted to hold for the longer term.

So far I have done just 13 reciprocal buys/sells in six months. One of them was a stupid trade that I didn't know much about, and even so it took an additional fat finger problem to lose me money on it. There was one other loss maker and eleven gains. The odds of 11 out of 13 gains happening by random chance are a hair under 1%. However, I'll continue to keep an eye on it and see how things go.

If this all sounds like a lot of work, bear in mind I only need to check anything when I'm considering getting into the market, and thereafter I only need to worry about one or two specific stocks that I have already got at a good price.


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## Fella

I whatsapped a good friend of mine last night , he was a day trader , he rented a desk in london for 6 years. He was given money and had to sit there and trade all day. I asked him about it, he said pretty much that yeah he was following news and constantly looking for edges , he said he picked up loads of tips and tricks and just got better from practice. He said he didn't rely on charts but was happy to get involved if he saw what he called an over reaction in market as he put it he said "he's happy to catch falling knives and wait for the bounce". When he got better and better the amount of money he was allowed trade increased and so did his earnings. He said it was stressful and not everyone is successful at it. One thing about this guy he is only about 32 now but extremely intelligent a very well read guy and has just a huge knowledge base , he could talk to you about Libya or soccer or a new mine in Mexico , anything the conversation is about on our whatsapp group he would have in depth knowledge on the subject. I don't have that broad knowledge of the world , I don't know what implications world events are going to have on individual stocks , he did and still does. Everything had a price also , he wouldn't get involved just for the sake of it , he might like a company but if he missed the price he would let it go. 

He left there very well off , he got a job with star lizard , that was his move into sports betting , Star lizard are basically a trading firm in sports gambling, spent a few years there and left and start betting on his own. You need an edge to make money in any zero sum games , when I met him in about 2009/2010 he was spending a lot of money on weather services , he would trade the draw in cricket or points market in NFL or Rugby based on weather conditions, he was aslo looking at the effect of humidity and altitude on kicking distances for field goals in NFL. He is now one of the wealthiest people I know and could retire comfortably in his early 30's. The main take from it is , information is key and having as much or more and better information gives you an edge even in a market that may seem impossible to beat.

I don't doubt you could make it trading , you've a good head on you and great knowledge of maths and statistics, even if it is a lot of work or maybe its not its possibly an enjoyable hobbie trading the markets once you don't over commit and lose more than you are willing to.


----------



## joe sod

What a year 2016 has been, 2015 ended badly with an awful lot of negativity then 2016 started with markets in panic and freefall. Alot of the extreme negativity was a result of anticipation of Fed hiking interest rates which they had to abandon due to the panic. Commodities and oil were also in freefall . Yet 2016 ends with fed hiking interest rates to barely a whimper, the stock markets and oil have had an incredible run and the dollar at a decade high. So 2016 would have been a horrible year to be uninvested even though nobody could have predicted that back in january


----------



## Gordon Gekko

Lest we forget, early in 2016 RBS were telling people that the end is nigh and exit doors would be thin on the ground.

Not being invested is the road to penury.


----------



## MrEarl

Gordon Gekko said:


> .....Not being invested is the road to penury.



Whereas investing badly, can get you to penury much quicker via helicopter 



... I do agree with the principal that a certain amount of carefully invested funds in the stock market is a good thing over long periods, btw.


----------



## PMU

landlord said:


> It is said that the long-term investor should not try to time the market and sure, had I left my funds alone for 15 years I probably would have beaten deposit rates by a descent margin. But it just doesn't make sense to me to continue investing at the top or close to the top of a 6 year bull run, especially when there are so many negative indicators, both politically and economically. Stocks are massively overpriced and there currently seems to be tremendous economic instability. Statistical history suggests that this bull market may end fairly soon, so it seems logical to wait for better value.


Few if any persons can consistently call market tops or bottoms. And what's overvalued to you may not be overvalued to someone else.  The original post was made on Sept 15 2015 by landlord who had bailed out of the stock market. Was that a wise decision?  The answer is NO.   Here are the returns of major indices in that period to date.
Iseq today 6,471.52; 21/09/15 6,182.62, i.e. you missed out on an 5 % gain.  Eurostoxx50 today 3,259.24; 21/09/2015 3,076.05, i.e. you missed out on a gain of 6%.  FTSE100 today 7,1001.64; 21/09/15 6,108.70; i.e. you missed out on a 16% gain.  S&P 500 today (i.e. at time of writing) 2,202.50; 21/09/15 1,966.97 i.e. you missed out on a 12% gain.  Commodities (i.e. CRNL.L) about a 12% increase. (Above prices from Yahoo and may not be in EUR.)

It's time in the market that counts; not market timing. If you have a certain investment horizon you need an asset allocation to match that; rebalance when appropriate; and accept the associated risk.


----------



## irish_investr

I think the gains listed above are not including dividends, in which case add on another 3-4%.


----------



## joe sod

If you are starting out and maybe have a small sum to invest maybe 10000 you can afford to be more focussed and take more risk. If for example your 10000 falls to 5000 it is actually tolerable and you can sit it out. However if you have built up a fund of 200000 from successful investments or other endeavours then you are much more risk averse. While it was tolerable to watch 10000 investment fall to 5000 it is intolerable for most people to watch 200000 of investments fall to 100000.


----------



## settlement

landlord said:


> It is said that the long-term investor should not try to time the market and sure, had I left my funds alone for 15 years I probably would have beaten deposit rates by a descent margin. But it just doesn't make sense to me to continue investing at the top or close to the top of a 6 year bull run, especially when there are so many negative indicators, both politically and economically. Stocks are massively overpriced and there currently seems to be tremendous economic instability. Statistical history suggests that this bull market may end fairly soon, so it seems logical to wait for better value.



And 20 months later the bull market continues to rage on. Shows the dangers of market timing or waiting for a crash/correction


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## galway_blow_in

anyone think the FTSE is a good bet right now , sterling 15% below where it was twelve months ago and the FTSE only about 15% above where it was in the year 2000 , only the u.s markets have had a raging bull market since 2009 , europe is still not much above where it was a good few year ago , germany being the exception


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## MrEarl

With regards to the FTSE much depends on your proposed investment period....

If you said 2-years for example, then I would personally be very reluctant to invest in the UK given the issues around BREXIT, but if you said 20-years then that is an entirely different story and you need to take a view on whether you think the British economy will do well in the long run after it leaves the EU.

When it comes to the US, I personally am still upbeat about the S&P500 because it would appear that the US Government will be progressing with their stated policies to create economic activity within the US so should benefit US companies. Furthermore US Government strategies surrounding protectionism, trying to encourage US companies to relocate their operations back to the US from other locations and their interest rate policies need to be considered (there are a few more interest rate hikes expected in the next 12-months so there should not be any surprises, with corporates having factored these increases into their projections etc.).

The Eurozone is the one I am struggling with most, when I look into my crystal ball... at one level, corporate results are relatively good, interest rates are particularly low and the Quantitative Easing (though buying bonds) has put a lot more cash in the EU economies. However, that said, the German's obsession with inflation and concerns about Spanish and Italian debt levels cannot be ignored - both remain significant geographical and economic areas within the EU. Then you throw the likely exit of the UK from the EU into the mix and it's a toss of a coin almost with the most likely outcome being little change one way or the other over the next couple of years.

All of the above is just my own view, definitely not financial advice and sometimes sourced from a person who might be related to Mystic Megg


----------



## Gordon Gekko

With a two year time horizon, I wouldn't invest at all!


----------



## PMU

galway_blow_in said:


> anyone think the FTSE is a good bet right now


(a) Do you have an investment plan? (b) Does you investment plan have an asset allocation strategy designed to meet your investment objectives? (c) Does your asset allocation strategy include the asset class 'foreign developed market equities'? (d) Are you under or overweight in this asset class? Now you can answer your question.


----------



## galway_blow_in

MrEarl said:


> With regards to the FTSE much depends on your proposed investment period....
> 
> If you said 2-years for example, then I would personally be very reluctant to invest in the UK given the issues around BREXIT, but if you said 20-years then that is an entirely different story and you need to take a view on whether you think the British economy will do well in the long run after it leaves the EU.
> 
> When it comes to the US, I personally am still upbeat about the S&P500 because it would appear that the US Government will be progressing with their stated policies to create economic activity within the US so should benefit US companies. Furthermore US Government strategies surrounding protectionism, trying to encourage US companies to relocate their operations back to the US from other locations and their interest rate policies need to be considered (there are a few more interest rate hikes expected in the next 12-months so there should not be any surprises, with corporates having factored these increases into their projections etc.).
> 
> The Eurozone is the one I am struggling with most, when I look into my crystal ball... at one level, corporate results are relatively good, interest rates are particularly low and the Quantitative Easing (though buying bonds) has put a lot more cash in the EU economies. However, that said, the German's obsession with inflation and concerns about Spanish and Italian debt levels cannot be ignored - both remain significant geographical and economic areas within the EU. Then you throw the likely exit of the UK from the EU into the mix and it's a toss of a coin almost with the most likely outcome being little change one way or the other over the next couple of years.
> 
> All of the above is just my own view, definitely not financial advice and sometimes sourced from a person who might be related to Mystic Megg




the ftse 100 is not all that reliant on the domestic uk economy


----------



## PMU

Scary stuff here: https://www.hussmanfunds.com/wmc/wmc170327.htm


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## willyfones

What happens to this graph over the next 3-5 years?


----------



## galway_blow_in

willyfones said:


> What happens to this graph over the next 3-5 years?




anyone who invested in the year 1999 or early 2000 would have expected to be where things are right now , i realise the gains in the nineties were exceptional but the trebling since march 2009 has to be looked at in context i think , that low had been last reached in the last quarter of 1996 which shows how bad things were in 2008 - 2009

if you look at the european markets bar germany , you would have done better leaving your money in savings since the end of the nineties , with regards europe , its incredibly overdue a long sustained bull market , europe is still below where it was in may of 2015 , the rising euro now looks like it might keep a lid on gains , japan is doing well but the yen is falling against the euro so no real benefit to owning japanese markets by the looks of things , shows how important currency is


----------



## Brendan Burgess

willyfones said:


> What happens to this graph over the next 3-5 years?



What would you have thought would have happened to this chart? 





You simply can't time the market. 

I sometimes think - "The market is overvalued I should get out" . But then what happens if it continues to rise? Worse, what happens if it falls? At what stage would I get in again. 

We have to keep repeating it - to make money timing the market you have to get two decisions right - you have to know when the top has been hit, and you have to know when the bottom has been hit.  Sorry Willy - but I doubt you can do either. 

Brendan


----------



## galway_blow_in

most people would consider twenty years to be a long time holding yet anyone who bought the S+P  at the end of 1999 ( price was 1425 )  , has only seen gains of about 4% per annum ( not including dividends )


----------



## Gordon Gekko

It's all about valuation. That person who bought in 1999 was investing at one of the worst times in history, and still he/she is in the money. Time in the market...


----------



## galway_blow_in

Gordon Gekko said:


> It's all about valuation. That person who bought in 1999 was investing at one of the worst times in history, and still he/she is in the money. Time in the market...



i know 1999 was towards the end of a bull market which began in 1982 but twenty years is still a very long time in the market , if you bought a house in the year 1999 anywhere in ireland , its worth more today , same in the uk or the usa , if you bought the s + p in 1960  , you were up nearly 100% by 1980 and that is considered a pretty poor period , the 1990  to 2000 period was exceptional in terms of gains but i dont think just because the market has more than trebled since march 2009 , this means a serious correction is overdue , that was a pretty unprecedented period


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## Sarenco

The real (inflation adjusted) annualised total return (with dividends reinvested) of the S&P500 from the start of 1999 to the start of this month was ~3.33%.  That's actually quite a bit lower than the (real) annualised return of the S&P since its inception.

That's not to suggest that I have the slightest idea what's going to happen to stock prices in the future.  I treat all predictions of future corrections or returns with the same degree of scepticism.

When it comes to the future, nobody knows nothin'!


----------



## galway_blow_in

Sarenco said:


> The real (inflation adjusted) annualised total return (with dividends reinvested) of the S&P500 from the start of 1999 to the start of this month was ~3.33%.  That's actually quite a bit lower than the (real) annualised return of the S&P since its inception.
> 
> That's not to suggest that I have the slightest idea what's going to happen to stock prices in the future.  I treat all predictions of future corrections or returns with the same degree of scepticism.
> 
> When it comes to the future, nobody knows nothin'!



 i have no clue whatsoever if markets will keep rising but i dont think a trebling of the market since a specific date ( march 6th 2009 ) means a single thing when assessing it 

been looking over historical prices of the S+P going back to the nineteenth century , the low reached in the great depression era of  1933 had not been visited in nearly forty years , had the same thing happened in the past decade , the market would have went back to levels not seen since the late seventies 

i find that fascinating


----------



## joe sod

galway_blow_in said:


> anyone who invested in the year 1999 or early 2000 would have expected to be where things are right now , i realise the gains in the nineties were exceptional but the trebling since march 2009 has to be looked at in context i think , that low had been last reached in the last quarter of 1996 which shows how bad things were in 2008 - 2009
> 
> if you look at the european markets bar germany , you would have done better leaving your money in savings since the end of the nineties , with regards europe , its incredibly overdue a long sustained bull market , europe is still below where it was in may of 2015 , the rising euro now looks like it might keep a lid on gains , japan is doing well but the yen is falling against the euro so no real benefit to owning japanese markets by the looks of things , shows how important currency is



i agree with your analysis with regard to europe it is long overdue a sustained bull market, therefore I think it is a good idea to invest more in europe and less in US market and I think this is what is happening now. Also we have had a very turbulent period in stock markets since 1999, but the period 1980 to 2000 was fairly calm with steady increases. Maybe we are back in such a period again after all the turmoil. People tend to put more emphasis on the events they have just experienced thinking that this is going to repeat and much less on events that may have happened in the distant past, this is always a mistake.


----------



## joe sod

I know this is an old thread but it is interesting nonetheless because it started in the stock market correction and then panic at the beginning of 2016. Its interesting that this period has been largely forgotten about now but it was a real fear in those first few weeks of 2016, I myself was scared because I did not know what was happening and why there was this panic. At this stage I have weathered 3 big panics, the 2002 crash, the 2008 financial collapse and then the 2015/2016 mini panic. In 2002 I had very little invested so not a big issue, in 2008 I actually gained from in following years, however 2016 was a big thing for me probably because I now had much more invested and was watching big sums being wiped from my investments daily and did not know why it was happening. Anyone else any thoughts and whats in store for coming years.


----------



## galway_blow_in

joe sod said:


> I know this is an old thread but it is interesting nonetheless because it started in the stock market correction and then panic at the beginning of 2016. Its interesting that this period has been largely forgotten about now but it was a real fear in those first few weeks of 2016, I myself was scared because I did not know what was happening and why there was this panic. At this stage I have weathered 3 big panics, the 2002 crash, the 2008 financial collapse and then the 2015/2016 mini panic. In 2002 I had very little invested so not a big issue, in 2008 I actually gained from in following years, however 2016 was a big thing for me probably because I now had much more invested and was watching big sums being wiped from my investments daily and did not know why it was happening. Anyone else any thoughts and whats in store for coming years.



bank of america has trebled in value since the low it reached in  february 2016 , financials and energy were the big winners this past two years , both seem likely to continue to do well under a trump presidency as both really done nothing for years since the crash , i know they were at deaths door in early 2009 but valuations were very low as recent as eighteen months ago 

interesting to see if european financials might too have a good run in the next few years , they have a lot less going for them of course


----------



## Brendan Burgess

Hi joe 

No one knows.  

Those who bailed out a year ago may well be regretting it now, but they could end up delighted with their decision if there is a big crash in the next year or two.  

It seems to me that stock market prices are too high. But what can I do about it? Sell off my portfolio and pay a lot of CGT? 


Where do I put the proceeds in the meantime? Irish property? Bank deposits? 

When would I buy in again? 

To time the stockmarket you have to be right twice. You have to sell at the top and buy back in again at the bottom. I have had no success in doing that in the past. 

If you invest in the stock market for the long term, it's best to brace yourself for the inevitable big crashes and big gains. 

Brendan


----------



## TheBigShort

Looking at some earlier posts here, offering advice and the mistakes, my experience in investing has been financially bad, got wiped out on a few stocks. My saving grace was that we sold our house pretty much at peak market prices in March 2008 and realised a tidy profit (this was luck, not strategy). The experience I believe has left me with an acute sense of following my own instincts rather than the advice of experts.
Notwithstanding that expert advice is of course to be taken on board, the point is to sound out as much expert advice as possible, the pro's and con's. Once its a case of two experts disagreeing, then you really need to pay attention to what is happening in your part of the world, or at least in the part of the world, or industry sector etc, where your investment will be producing its bread and butter.

I have small stock holdings now, food producing companies mostly, some goldmoney.com and some crypto.
Im a bear on the whole QE scheme. My understanding is that in a normal functioning monetary system as one asset class rises it can act as a draw of wealth from another asset class e.g. if stocks are falling, gold, art, may see rises as they can act as 'safe havens'.
What we have today is rising stocks, bonds, property, art & antiques etc, and even the emergence of cryptocurrency.
This is all on the back of very modest global growth. Coupled with rising political tensions, possible oil hikes, an increasingly unstable trade environment (Brexit, Trump = economic war?) someone is going to lose out big at some point, sooner rather than later. What the rammifications will be I dont know - lets hope its a speed bump. But history would probably indicate otherwise.


----------



## Brendan Burgess

TheBigShort said:


> my experience in investing has been financially bad, got wiped out on a few stocks. My saving grace was that we sold our house pretty much at peak market prices in March 2008 and realised a tidy profit (this was luck, not strategy). The experience I believe has left me with an acute sense of following my own instincts rather than the advice of experts.



I don't follow that. 

You got wiped out on a few stocks which you chose yourself - presumably by following your own instincts? 
The only profit you made was due to luck - not strategy. 

But you rely on your own instincts? 

It seems that luck has rescued you from your instincts and you should aim to be lucky rather than rely on your instincts. 

Brendan


----------



## cremeegg

TheBigShort said:


> What we have today is rising stocks, bonds, property, art & antiques etc, and even the emergence of cryptocurrency.



This is because interest rates are low, inflation expectations are low.

Art, antiques, gold, provide no yield. This hardly matters when interest rates are low as then deposits also provide no yield.

Bonds provide a known yield, when interest rates rise bond prices will fall creating a higher yield.

It costs more to hold shares when interest rates rise, this is true of all shares. Some shares benefit as a hedge against inflation, some suffer from a slowing economy. Who knows what the aggregate response of shares is.

Property, now that is a different matter.


----------



## TheBigShort

Brendan Burgess said:


> You got wiped out on a few stocks which you chose yourself - presumably by following your own instincts?
> The only profit you made was due to luck - not strategy.



To clarify, the stocks I got wiped on was from following the advice of others, and not using my own instincts. Hence;



TheBigShort said:


> The experience I believe has left me with an acute sense of following my own instincts rather than the advice of experts.



Apologies if I didnt convey that properly.


----------



## TheBigShort

cremeegg said:


> This is because interest rates are low, inflation expectations are low.
> 
> Art, antiques, gold, provide no yield. This hardly matters when interest rates are low as then deposits also provide no yield.
> 
> Bonds provide a known yield, when interest rates rise bond prices will fall creating a higher yield.
> 
> It costs more to hold shares when interest rates rise, this is true of all shares. Some shares benefit as a hedge against inflation, some suffer from a slowing economy. Who knows what the aggregate response of shares is.
> 
> Property, now that is a different matter.



Thks cremegg, I get all that. But all my indicators are telling me all is not well in economic theory land.


----------



## Brendan Burgess

TheBigShort said:


> the stocks I got wiped on was from following the advice of others, and not using my own instincts



OK, that makes sense now. 

The stock market is efficient.  With a few rare exceptions like Warren Buffet, people can't beat it. So this is one area where you can ignore the experts - stock brokers, journalists and investment managers. If you want to invest in the stock market, buy a fund or a portfolio of diversified shares. 

For example, this would worry me: "I have small stock holdings now, food producing companies mostly,". If the amounts are small, it doesn't matter. But if they are significant, owning a lot of one sector is not a good idea. 

Brendan


----------



## TheBigShort

Thanks Brendan

The sums arent insignificant (to me), but I havent bought any new stock for a few years now, so im happy to keep as is, acknowledging your advice for diversification all the same.
 In fact, diversification is the aim, but on my own terms and in my own time. 
I expect a market correction (at a minimum) at some point sooner or later and I have some (embryonic) ideas  to focus on tech stocks outside the giant tech companies now. Lot of research work required though.


----------



## Daddy Ireland

Speaking of instinct, I think there are several UK shares that come to mind that are cheap with good dividends of 5% plus , dividends that are well covered.  I like articles done by Seeking Alpha which are very, very informative.  E.G Refer to one they done on Bank Of Ireland some time ago.   Sterling might be over the worst of Brexit or already built into price.  The English are very resilient and if sterling falls another 5% it will bounce back.  So by my reckoning at worst Sterling may fall another bit but investing in solid UK shares with strong dividends is a good idea.  At least in doing this I don't think I could do any worse than deposit interest of pretty much zero,  I believe I could invest in the UK shares through my daughter who has a part time UK job and studying in UK and dividend income would be below the 5k threshold and therefore no tax payable by her.   This would be money I would be gifting her.


----------



## galway_blow_in

ive discovered in the past six months that only passive investing suits me , otherwise im constantly second guessing myself , i made some money on bmw in 2013 but wrongly thought it would go up more , made nice money on kerry and glanbia from 2009 to 2013 but that was only because my brother is a dairy farmer and i was familiar with both companies and from 2009 things could only go up  , luckily i had no money in stocks at all before the crash arrived but even since then more often than not ive chosen stocks which have lagged the market , they say a relatively small percentage of any index actually drives it so the chances of beating the market are even  smaller than most people think

my equity portfolio made up of  two etf,s is up nearly 6% since last july when i put in a six figure plus some  , it only needs to go up another 4% in the next six months for me to be more than happy

as regards instinct , mine told me last summer that energy was having a very temporary pull back and i had planned to buy two well known british energy giants , sarcenco then produced his video explaining how dividends are a fallacy so i changed my mind


----------



## Gordon Gekko

The greatest mistake any of us make is thinking too much about the short-term with regard to our investments.

My pension fund is invested in a global equity fund. The costs are reasonable. I don’t really care whether a correction comes or not; it might even be better as my ongoing contributions will get me more units.


----------



## Daddy Ireland

Hi Galway,   Can you direct me to Sarencos video on the fallacy of dividends.


----------



## galway_blow_in

Daddy Ireland said:


> Hi Galway,   Can you direct me to Sarencos video on the fallacy of dividends.



not sure im allowed , it wasnt his video but he put it up and repeatedly stated that dividends were inferior to capital gains


----------



## Sarenco

galway_blow_in said:


> he put it up and repeatedly stated that dividends were inferior to capital gains


Not quite - I actually said that many investors had an irrational preference for dividends as a source of return.

I posted a link to a video on the free dividend fallacy on this thread:

https://www.askaboutmoney.com/threads/the-free-dividends-fallacy.204136/


----------



## Daddy Ireland

But how did you see the video Galway was it sent to you privately if not referred to on a forum ? I would agree that dividends are inferior to capital gains but I think most people investing expect both to happen really over time.  Don't personally like ETFs.  Very complicated as per Rory Gillen and I like things straightforward.  Britain is on sale per Seeking Alpha and is being treated tough with Brexit but there are currently excellent companies that will outperform once this whole Brexit thing blows over.  Think energy, insurance, utilities as examples in not naming names.  They will grow dividends plus a capital gain over time.  Just a case of being patient.  When a market crash comes I believe many UK stocks won't fall to the same degree.


----------



## Daddy Ireland

Thanks Sarenco


----------



## galway_blow_in

Daddy Ireland said:


> But how did you see the video Galway was it sent to you privately if not referred to on a forum ? I would agree that dividends are inferior to capital gains but I think most people investing expect both to happen really over time.  Don't personally like ETFs.  Very complicated as per Rory Gillen and I like things straightforward.  Britain is on sale per Seeking Alpha and is being treated tough with Brexit but there are currently excellent companies that will outperform once this whole Brexit thing blows over.  Think energy, insurance, utilities as examples in not naming names.  They will grow dividends plus a capital gain over time.  Just a case of being patient.  When a market crash comes I believe many UK stocks won't fall to the same degree.



energy stocks are up about 25% since last july , as are mining stocks , that ship has left the harbour , whatever about having sailed off

the etf,s i own are american domiciled so as to avoid the eight year rule , i hear irish citizens wont be able to purchase these anymore so i wont be selling mine anytime soon


----------



## Daddy Ireland

Energy stocks in UK up 25% since last July ?   Care to back that up Galway with some examples !


----------



## galway_blow_in

Daddy Ireland said:


> Energy stocks in UK up 25% since last July ?   Care to back that up Galway with some examples !



well i over egged it

of the two british ( one anglo dutch ) oil majors in the ftse 100 , the anglo dutch one is up nearly 24 % since july , the other one which rhymes with GP is up 19%

the two anglo aussie mining giants are up between 20 and 25% each as well


----------



## Daddy Ireland

I can name energy stocks SSE, CENTRICA, NATIONAL GRID all down significantly since July to name but a few.  National Grid yields 5.5% and dividend cover greater than 4. Better than money in the bank. Yes BP and SHELL have risen a lot but yield over 6% and oil price relatively stable at 60 dollars.


----------



## Daddy Ireland

Apologies if I have crossed the line in naming stocks but was merely showing opposition to Galways assertion.


----------



## galway_blow_in

Daddy Ireland said:


> I can name energy stocks SSE, CENTRICA, NATIONAL GRID all down significantly since July to name but a few.  National Grid yields 5.5% and dividend cover greater than 4. Better than money in the bank. Yes BP and SHELL have risen a lot but yield over 6% and oil price relatively stable at 60 dollars.



yields on those oil major  stocks were 8% last july


----------



## Daddy Ireland

Yes 8% last July dividend on BP when share price was depressed now a lower yield with price higher.  You would have done very good with BP too rather than your ETF and in fact much better with BP had you invested your six figure sum there. But hey nothing wrong with 6% return on ETF.


----------



## Gordon Gekko

Hindsight Capital - Outperforming the market since 1928


----------



## Fella

I love Buffet , some of my favourites .The great thing is I know nothing about investing couldn’t read a balance sheet, have no idea of individual companies or sectors and don’t follow what’s going on in the world , but I’ve listenned to the best and just bought the market and have maybe 30-40% ROI , still buying into F&C and a couple of other trusts ( thanks Sarenco ) every few months , I’ll revisit this thread every 10 years and see how far behind stock pickers and market timers I am.

_“If past history was all that is needed to play the game of money, the richest people would be librarians.”_
_
“There seems to be some perverse human characteristic that likes to make easy things difficult.”

“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”_


----------



## joe sod

Fella said:


> I love Buffet , some of my favourites .The great thing is I know nothing about investing couldn’t read a balance sheet, have no idea of individual companies or sectors and don’t follow what’s going on in the world , but I’ve listenned to the best and just bought the market and have maybe 30-40% ROI , still buying into F&C and a couple of other trusts ( thanks Sarenco ) every few months , I’ll revisit this thread every 10 years and see how far behind stock pickers and market timers I am.



in fairness fella you are not the typical average investor in that you have developed a large tolerance for losses from your betting experience which is crucial. Lots of people say that they will just buy the market and sit tight until a year like 2008 rolls around and then they panic. Even diversified etfs were sold in 2016 so diversification does not stop people from panicing. The average investor has the worst performance of all, time and time again they sell the lows and buy the highs. More information and ease of buying and selling will only exaggerate this phenomenon.


----------



## Brendan Burgess

Gordon Gekko said:


> Hindsight Capital - Outperforming the market since 1928



That's brilliant. 

Brendan


----------



## Dan Murray

joe sod said:


> The average investor has the worst performance of all....



Joe,

This is a little tongue in cheek - but when I challenge Brendan on his understanding of probabilities, etc. - it would be a little remiss of me if I did not highlight the paradox in the above as well!


----------



## joe sod

Dan Murray said:


> Joe,
> 
> This is a little tongue in cheek - but when I challenge Brendan on his understanding of probabilities, etc. - it would be a little remiss of me if I did not highlight the paradox in the above as well!



I dont mean "average" in the mathematical sense, i mean the "average joe" was the worst performer of all much worse performance than the much maligned fund managers. I think alot of "average joes" have stayed out of the markets for years now and are only now getting back in. So not many people actually just buy the market through the ups and downs, loss aversion is the key reason for this


----------



## LoveTrees

I started investing part of my savings into shares via execution only brokers roughly 4 years ago. I was so naive that I kept them idle (only action: reinvested dividends every x months, of course I paid my taxes on the dividends/whatever) until a month ago when I started swapping shares (calculating CGT on each trade) every 4/more than 4 weeks periods after finally learning (thanks to AAM as well) of the FIFO, 28 days rule, etc. Also I also started availing of the 1270 Eur/year CGT allowance.

In 4 years of shares-investments kept mainly idle (all blue chips) my shares now could drop 30% and I would reach the original invested capital amount.

I am wondering if there is a perception of how strongly the upcoming bear will hit... As I read around it statistically comes back at least every 8 years and this is the 9th year of growing share markets (and that's in my opinion also because people have lost faith on banks as safe heaven for cash amounts+interest rates are too low)... FT Weekends and Sunday Times are still quite vague on this, imo...

As I learned with the big crisis of 2008/2009 main shares dropped in value my even more than 50% correct? And f I look at the Dow Jones graph imo we should consider a drop at least from 26K to 20K (trajectories) i.e. roughly 22% before the cycle starts again.

I mean: this kind of heaven cannot keep going forever... We must get ready psychologically... And anyway myself I'm not planning any cashing in for another 20 years at least but just periodical few shares-swapping...

Any thought?


----------



## settlement

landlord said:


> But it just doesn't make sense to me to continue investing at the top or close to the top of a 6 year bull run, especially when there are so many negative indicators, both politically and economically. Stocks are massively overpriced and there currently seems to be tremendous economic instability. Statistical history suggests that this bull market may end fairly soon, so it seems logical to wait for better value.


Two and a half years later the bull market continues to rage on relentlessly


----------



## cremeegg

Yes but that just means that the stopped clock merchants are 30 months closer to their day in the sun.


----------



## joe sod

LoveTrees said:


> I am wondering if there is a perception of how strongly the upcoming bear will hit... As I read around it statistically comes back at least every 8 years and this is the 9th year of growing share markets (and that's in my opinion also because people have lost faith on banks as safe heaven for cash amounts+interest rates are too low)... FT Weekends and Sunday Times are still quite vague on this, imo...



There was a fairly big correction at start of 2016, if you remember, there was alot of doomsday stuff then and it felt real. There was a wallstreet dictat that if market falls by a certain percentage the first few days in january then the market will be down substantially by the end of year. There were trading algorithms programmed to sell based on that dictat which amplified substantially what was really happening. If you remember the market was falling 2%, 3% day after day but alot of it was computers programmed to follow that dictat. Then the madness stopped because the wise heads realised that this was rubbish and began to buy despite the long held wallstreet dictat. Therefore that theory is now thrown out as debunked probably never to be heard of again. I think now in the computer age alot of long held theories on trading no longer apply as too many computers were programmed to follow these dictats and then end up debunking them, probably because other computers programmed to take advantage of it. We simply cannot tell when the next correction will happen, we have already had the once in a generation crash of 2008 the worst since 1929, people are still scared of that and are looking around the corner for the next 2008 crash, thats what january 2016 showed but it was a false dawn.


----------



## galway_blow_in

joe sod said:


> There was a fairly big correction at start of 2016, if you remember, there was alot of doomsday stuff then and it felt real. There was a wallstreet dictat that if market falls by a certain percentage the first few days in january then the market will be down substantially by the end of year. There were trading algorithms programmed to sell based on that dictat which amplified substantially what was really happening. If you remember the market was falling 2%, 3% day after day but alot of it was computers programmed to follow that dictat. Then the madness stopped because the wise heads realised that this was rubbish and began to buy despite the long held wallstreet dictat. Therefore that theory is now thrown out as debunked probably never to be heard of again. I think now in the computer age alot of long held theories on trading no longer apply as too many computers were programmed to follow these dictats and then end up debunking them, probably because other computers programmed to take advantage of it. We simply cannot tell when the next correction will happen, we have already had the once in a generation crash of 2008 the worst since 1929, people are still scared of that and are looking around the corner for the next 2008 crash, thats what january 2016 showed but it was a false dawn.



i seem to remember in january 2016 , a lot of talk about how the big banks were exposed to the energy sector which was in free fall at the time and appeared to be driving the correction  , hard to see how computers were behind that ?, more like big money shorting with a view to hoovering up bank stocks on the cheap ? , bank of america has trebled in value in two years , is it three times more profitable today ?


----------



## moneymakeover

Is it because interest rates are so low... all money went into either property or stocks?

As interest rates start to rise would expect money to drift out of stocks

But financial might stay good because will benefit from rate rises


----------



## joe sod

galway_blow_in said:


> i seem to remember in january 2016 , a lot of talk about how the big banks were exposed to the energy sector which was in free fall at the time and appeared to be driving the correction  , hard to see how computers were behind that ?, more like big money shorting with a view to hoovering up bank stocks on the cheap ? , bank of america has trebled in value in two years , is it three times more profitable today ?



there always is a plausible reason aswell for the fall that was happening through end of 2015, also jitters about chinese stock market, but that was not the reason for the panic in january 2016, it wasn't rational , if "big money" was so clever to cause the sell off then how did they all get caught in 2008 with some going bust. Alot of "big money" was wrong in 2016 when they shorted the market and alot of them lost money, not all "big money" is so smart


----------



## Gordon Gekko

What did markets fall by from April 2015 to circa April 2016?

Circa 25% as I understand it.

There seems to be more money to be made by selling oneself as a doomsday merchant rather than an optimist.

The most important thing is one’s time horizon. For most people, it’s far longer than they think. And in reality, the long term investor never loses if he or she is diversified. As the saying goes, time in the market trumps timing the market...


----------



## LoveTrees

joe sod said:


> There was a fairly big correction at start of 2016, if you remember, there was alot of doomsday stuff then and it felt real.



My shares were still so idle that I don’t remember that well sorry…



Gordon Gekko said:


> The most important thing is one’s time horizon. For most people, it’s far longer than they think. And in reality, the long term investor never loses if he or she is diversified. As the saying goes, time in the market trumps timing the market...



I completely agree.

Thank you all!


----------



## RETIRED2017

Gordon Gekko said:


> Hindsight Capital - Outperforming the market since 1928


Lifted from Ric Edelman


----------



## joe sod

The Dow down 2.5% today , its the worst week in 2 years, maybe this is the start of long awaited correction.


----------



## LoveTrees

joe sod said:


> The Dow down 2.5% today , its the worst week in 2 years, maybe this is the start of long awaited correction.



I would agree at this stage. Too much adrenalin in all the markets in all these months. Also Trump reenacting the "cold war" with the last declarations is just adding to the overall hardening of conversations which got started with USD weakening in some kind of export-battles with other countries. My suggestion is to fasten our seatbelts and for the long term investors like myself to get more spiritual for a while and less mathematical... Personally I just pray that no mad man starts looking at a nuclear button...


----------



## joe sod

Yea you right to wait for a bit, 2.5% is a big whack you forget when it hasn't happened in a while, I dont think its going to be a big correction , I think market just wanted an excuse to sell off, there was no real negative stuff actually, it was just that there has been an unbelievable run in the stock market over the last few months. But you never know whats around the corner


----------



## galway_blow_in

the u.s market is still a good bit above where it was the 1st of january , the european stoxx 600 is still nearly 10% below its spring 2015 high , it actually appears to be a waste of time owning european indexes as they always follow the u.s market down yet rarely ever match it on the way up so you might as well just own american indexes  ! , im not saying there are no good european companies but the overall european market is nearly always trailing regardless of how expensive the american one is , even with the dollar having fallen to much v the euro this past year , a eurozone citizen was better having simply bought the S+ P 

im beginning to see the picture clearer that americans have a huge advantage in terms of building wealth through equities than someone in ireland even you put aside how the irish government penalises the owning of equities full stop ! , if the dollar is going down , the u.s stock market loves it , if europes economy is doing badly , the european stock market is sluggish , if the european economy picks up , the euro rises and this hurts european equities


----------



## cremeegg

Thats an interesting post Galway. Is it still true if you look at the US market in Euro terms.


----------



## Sarenco

cremeegg said:


> Is it still true if you look at the US market in Euro terms.


Nope.  In Euro terms, Eurozone Stocks materially outperformed US Stocks in 2017.


----------



## galway_blow_in

Sarenco said:


> Nope.  In Euro terms, Eurozone Stocks materially outperformed US Stocks in 2017.



the european market is still nearly 7% below its april 2015 high , imagine if the s + p or dow were 7% below the april 2015 high ? ,(  now i realise european markets have the uk as the dominant contributor and the huge drop in sterling is a major contributor but eurozone citizens really suffer from a strong euro  )


----------



## Sarenco

What I care about is the long-term total return on my investments, as expressed in my home currency.

Whether any particular index is above or below its previous high is of no consequence to me.


----------



## PMU

galway_blow_in said:


> the european market is still nearly 7% below its april 2015 high , imagine if the s + p or dow were 7% below the april 2015 high ? ,(  now i realise european markets have the uk as the dominant contributor and the huge drop in sterling is a major contributor but eurozone citizens really suffer from a strong euro  )


Actually, Eurozone markets are still down about 33% from their May 2000 peak.  The S&P is up about 88% in the same period.


----------



## cremeegg

PMU said:


> Actually, Eurozone markets are still down about 33% from their May 2000 peak.  The S&P is up about 88% in the same period.



I get really irritated by people saying things like this without showing where they are getting their info from. Is the above true, or even a reasonable attempt at the truth. 

So I did my own research. Here is what I found.

Eurostoxx 50, August 2000 1,521, today 3,525, an increase of 132%

S&P 500, March 2000 1,527, today 2,762 an increase of 81%.  The Eurozone/USD exchange rate averaged 1 Eur to 0.94 USD in March 2000. Today 1 Eur is 1.23. So in Euro terms the S&P has gone from 1624 to 2245 or an increase of 27%

The reason I choose two different start dates is because both were market high points for the year 2000. 

My conclusion is that the Eurostoxx 50 has hugely outperformed the S&P since 2000. 

If I have misunderstood anything I shall be glad to be corrected.

Exchange rates  https://tradingeconomics.com/euro-area/currency

Eurostoxx 50  https://www.investing.com/indices/eu-stoxx50-chart

S&P  https://www.investing.com/indices/us-spx-500-historical-data


----------



## galway_blow_in

PMU said:


> Actually, Eurozone markets are still down about 33% from their May 2000 peak.  The S&P is up about 88% in the same period.



well im only looking at the VEUR etf which incorporates the uk and switzerland too , while this etf outperformed the s + p in euro terms in 2017 , nearly all the gains were in the first quarter of 2017 , its lagged the s + p ( in euro terms ) considerably this past eight months , due no doubt to the runaway euro exchange rate


----------



## galway_blow_in

Sarenco said:


> What I care about is the long-term total return on my investments, as expressed in my home currency.
> 
> Whether any particular index is above or below its previous high is of no consequence to me.



no matter what time frame you use , long or short , you will do as well and usually better by simply owning the s + p

even in 2018 , the s + p beats the veur etf in euro terms , the s + p is marginally green while the european wide fund is down so far this year , if you go back five years using the ishares  IMEU etf ( as vanguards  veur is less than five years around ) , your up 32% in euro terms  using that european market tracker , if you bought the  ishares etf IUSA ( tracking the s + p in euro  ) , your up 103%


go back even further  to ten years  and the gulf is worse again , if you bought the s + p tracking IUSA , you are up 139 % , had you stuck your money in the european tracking etf IMEU , your up a meagre 15.88 %


----------



## galway_blow_in

cremeegg said:


> I get really irritated by people saying things like this without showing where they are getting their info from. Is the above true, or even a reasonable attempt at the truth.
> 
> So I did my own research. Here is what I found.
> 
> Eurostoxx 50, August 2000 1,521, today 3,525, an increase of 132%
> 
> S&P 500, March 2000 1,527, today 2,762 an increase of 81%.  The Eurozone/USD exchange rate averaged 1 Eur to 0.94 USD in March 2000. Today 1 Eur is 1.23. So in Euro terms the S&P has gone from 1624 to 2245 or an increase of 27%
> 
> The reason I choose two different start dates is because both were market high points for the year 2000.
> 
> My conclusion is that the Eurostoxx 50 has hugely outperformed the S&P since 2000.
> 
> If I have misunderstood anything I shall be glad to be corrected.
> 
> Exchange rates  https://tradingeconomics.com/euro-area/currency
> 
> Eurostoxx 50  https://www.investing.com/indices/eu-stoxx50-chart
> 
> S&P  https://www.investing.com/indices/us-spx-500-historical-data




you think the euro stoxx 50 has outperformed the s + p since 2000 ?

nonesense !


----------



## galway_blow_in

galway_blow_in said:


> you think the euro stoxx 50 has outperformed the s + p since 2000 ?
> 
> nonesense !



i cant seem to go back to the year 2000 but i can go back to january 26th  2001 for the euro stoxx 50  and its down nearly 25% 


https://finance.google.com/finance?q=AMS:EUEA&ei=VU53WsG6K4-MswH4846AAg


----------



## Sarenco

galway_blow_in said:


> no matter what time frame you use , long or short , you will do as well and usually better by simply owning the s + p


Sorry Galway but that is simply untrue.

By way of example, Eurozone stocks outperformed US stocks, in Euro terms, (a) over the decade beginning in 2000; (b) over the last 12 months; and (c) year to date.

Of course that tells us absolutely nothing about what is going to happen in the future.  All we can say is there have been periods in the past where Eurozone Stocks have outperformed US stocks and vice versa.

I don't pretend to know more than the market so I just hold Eurozone and US shares at (roughly) their market cap weight.


----------



## galway_blow_in

Sarenco said:


> Sorry Galway but that is simply untrue.
> 
> By way of example, Eurozone stocks outperformed US stocks, in Euro terms, (a) over the decade beginning in 2000; (b) over the last 12 months; and (c) year to date.
> 
> Of course that tells us absolutely nothing about what is going to happen in the future.  All we can say is there have been periods in the past where Eurozone Stocks have outperformed US stocks and vice versa.
> 
> I don't pretend to know more than the market so I just hold Eurozone and US shares at (roughly) their market cap weight.



im currently holding two ETF,s which combine europe including the uk and japan , the strong japanese performance is the only thing which has left me up about 3% since last july , had i just bought the VT world fund , id be up more , that fund is at least 50% u.s so when i factor in the u.s stronger performance the majority of the time , i think im going to switch over to this single  all encompassing etf , i still get european and japan exposure anyway , i had this idea last july that it was inevitable that europe would eventually do better than the u.s but ive yet to see a morning in europe where the markets were up following a close in the red on wall street

europe only follows , it never leads !


----------



## Sarenco

The FTSE Eurozone index has materially outperformed the FTSE All World index over the past 12 months when measured in Euro.

12 months is really just a blink of an eye when it comes to measuring the performance of any equity index but it is simply untrue to suggest that Eurozone equities have been perennial under-performers. 

Again, the past is not prologue but I agree that holding stocks at something close to their market cap weight is a good strategy.


----------



## mtk

Sarenco said:


> What I care about is the long-term total return on my investments, as expressed in my home currency.
> 
> Whether any particular index is above or below its previous high is of no consequence to me.



Why ? I know one of my old  DC pensions in a currency hedged fund .
Do publicly available currency hedged funds not exist ?


----------



## galway_blow_in

Sarenco said:


> The FTSE Eurozone index has materially outperformed the FTSE All World index over the past 12 months when measured in Euro.
> 
> 12 months is really just a blink of an eye when it comes to measuring the performance of any equity index but it is simply untrue to suggest that Eurozone equities have been perennial under-performers.
> 
> Again, the past is not prologue but I agree that holding stocks at something close to their market cap weight is a good strategy.



versus the FTSE all world index ( VWRL.AS ) ,it is true using a three year ,  five year , ten year and twenty year measure

you conveniently picked the last  twelve months as a  period  !,even  using the most recent  nine month period , the european market underperforms


----------



## Sarenco

Sorry but I'm not cherry picking anything.

You originally said that US stocks outperformed EZ stocks over whatever time frame you use "long or short".  That is untrue and I gave you three recent examples of time frames where EZ stocks have outperformed US stocks.

You then said you would have been better off buying a global index fund last year because of the weighting of US stocks in global indices.  I simply pointed out that EZ stocks actually outperformed global indices over the last 12 months. 

Again, I am an advocate of investing in equities on a global basis at something close to their market cap weightings.  That is simply because I don't pretend to know what stock, sector or region will out perform in the future.


----------



## Sarenco

mtk said:


> Do publicly available currency hedged funds not exist ?


They do indeed exist (they're not uncommon) but I don't want to hedge my currency risk/exposure.


----------



## joe sod

I think at this stage Europe is the place to be investing but I have thought that and have been investing like that since 2015, however I still had some investments in the US technology companies which done great. I think a lot of the outperfomence of the US market can be explained by the sheer dominance of the US technology sector. Us technology companies are the ones that drove the internet and have benefited hugely from it, nobody can touch them, only south Korea and Japan come close. I think Japan is one to watch now with its big leadership in robotics


----------



## stantheman

DOW down 3% this evening (was down 1500pts at one stage).
NASDAQ was down nearly 5% a short time ago. 
It looks like they are coming back somewhat now, but this kind of volatility seems to be indicative of the nervousness building in the market.


----------



## cremeegg

stantheman said:


> DOW down 3% this evening (was down 1500pts at one stage).
> NASDAQ was down nearly 5% a short time ago.
> It looks like they are coming back somewhat now, but this kind of volatility seems to be indicative of the nervousness building in the market.



The market climbs a wall of worry. !!!


----------



## galway_blow_in

japanese market is expected to open 8%  down in a few hours


----------



## delfio

galway_blow_in said:


> japanese market is expected to open 8%  down in a few hours



Is it merely a correction or will there be a crash


----------



## galway_blow_in

delfio said:


> Is it merely a correction or will there be a crash



dont ask me !


----------



## TheBigShort

delfio said:


> Is it merely a correction or will there be a crash



Nobody knows.

My guess, just a correction. The 'crash' however is on its way. Not so much a 'crash', but more so a 'clash'. A clash of debit v credit, leading to a 'crash'. 

That of course is just my take, I could be wrong.


----------



## Sarenco

Just for some perspective, today marked the end of the S&P's record 450-day run without a 3%+ pullback from a closing high.  The longest previous period without a 3% pullback was 370 days.

Volatility is the norm in equity markets - the recent calm has been exceptional.


----------



## Philip S

ISEQ opened down 3% down 6.9% YTD


----------



## Sunny

Sarenco said:


> Just for some perspective, today marked the end of the S&P's record 450-day run without a 3%+ pullback from a closing high.  The longest previous period without a 3% pullback was 370 days.
> 
> Volatility is the norm in equity markets - the recent calm has been exceptional.



Excellent point. I have never seen so many hourly updates on the price of shares and crypto currencies.  

The most interesting thing about the latest movement is a) It's a reaction to expected higher inflation in the US and therefore higher interest rates quicker than expected. This lends credence to many peoples argument that equity markets are being propped up by cheap money and b) How the sell off in the US on the back of higher bond yields caused a huge sell off in Asia and Europe as well. The US consumer still rules the world.


----------



## rinku123

yes right


----------



## galway_blow_in

Sunny said:


> Excellent point. I have never seen so many hourly updates on the price of shares and crypto currencies.
> 
> The most interesting thing about the latest movement is a) It's a reaction to expected higher inflation in the US and therefore higher interest rates quicker than expected. This lends credence to many peoples argument that equity markets are being propped up by cheap money and b) How the sell off in the US on the back of higher bond yields caused a huge sell off in Asia and Europe as well. The US consumer still rules the world.



No sign of higher interest rates in Europe, what' s the European markets excuse for puking?


----------



## RedOnion

galway_blow_in said:


> No sign of higher interest rates in Europe, what' s the European markets excuse for puking?


There is. 10 year bond yields are up


----------



## joe sod

The Dow falling 4.5percent in a couple of hours, a new record, never seen something happen so fast from nothing. It feels like a panic though , you never get used to it either. I had to laugh this morning at the financial analysts trying to come with reasons for the sell off, "the dog ate my homework, sir". Feeling a bit more humble myself this morning was getting used to looking at portfolio going up every week


----------



## delfio

Listening to Paul Somerfield in the radio few moments ago was scary.


----------



## galway_blow_in

RedOnion said:


> There is. 10 year bond yields are up



yes but draghi in his most recent ECB press briefing cast doubt on the possibility of a rate rise this year , different story with the fed in the usa

europe follows the usa down regardless , europe hasnt had a particularly good run this past nine months and is now 1% below where it was this day three years ago ! , completely different to what happened in the usa where the market seemed to forever be climbing , if the u.s market was below where it was this day in 2015 , no one would describe the market as being strong ?


----------



## galway_blow_in

delfio said:


> Listening to Paul Somerfield in the radio few moments ago was scary.



that guy has been a bear forever


----------



## joe sod

galway_blow_in said:


> that guy has been a bear forever



In fairness he was saying a week ago that he expected a correction because the big tech stocks would dissappoint on earnings, they actually did not dissappoint but the market looked for another excuse to sell off anyway. But then a big sell off happens then suddenly they become an authority on it and know exactly why it happened and it was all so predictable.
In Ireland though you cant actually tell people that its a good time to buy for example like 2 years ago or you get crucified if the market continues to fall, you would have people ringing joe duffy to complain, in the US they are more forgiving so there are guys there prepared to stick their neck out like that and people will take their losses on the chin


----------



## Parker101

Since the stock market began, stocks rise and fall. Markets correct, recover, correct, recover. That's the economic cycle. We often lose sight of this due to the volume of white noise and so called experts out there. Then fear and emotion kick in with our decision making.  When Trump gleefully announced in a recent interview that the stock market was at its highest level ever, I sighed. Its not an everlasting gobstopper for Gods sake! Growth is not infinite. Best to look back historically at all the corrections, speed bumps and downturns in the stock market.....and we are still here. I suppose the key is to be diversified, different asset classes etc and not bet on one horse essentially.


----------



## Gordon Gekko

Sommerville’s performance was incredible.

He advised people to panic now because it’s cheaper than panicking later.

He compared the last few days to 1987 and the start of the financial crisis.

Truly astonishing. Who believes this stuff?


----------



## Fella

It’s all mad Ted since I start investing all I’ve heard is “it’s a bad time” correction due blah blah blah , I’m still buying every month (or 2/3 months max ) and logged on yesterday Expecting to see a bloodbath , nothing of the sort I’m probably back to where I was last October at worst , oh the drama , stocks rise and fall without risk there is no reward . I got great advice here buy investment trusts and hold , I’m up a lot of money about 30-40% since 2014 , all these doomsdayers eventually they might be right and and it crashes 25% in a day but I’ll still be up, don’t listen to noise and trash talk just buy and hold and believe in the markets. 

It’s funny reading “trillions wiped off the stock market “ I’ve never once read “trillions wiped onto the stock market”


----------



## TheBigShort

Fella said:


> I’m up a lot of money about 30-40% since 2014 , all these doomsdayers eventually they might be right and and it crashes 25% in a day but I’ll still be up, don’t listen to noise and trash talk just buy and hold and believe in the markets.



I think the real concern is for those who are reliant on cashing out of the stock market, or pension fund etc on or during retirement. A 25% drop is massive and can impact adversely on future consumption, employment, healthcare costs etc.
If you are simply holding long-term then correct, your money is tied up and has little bearing on you, but the impact can affect others in a bad way.


----------



## Sarenco

TheBigShort said:


> A 25% drop is massive


Is it?

It's certainly not in the least bit unusual for equities to correct by 20% or more - historically the S&P500 has suffered a 20%+ pull back roughly once every 3.5 years on average.

Decumulating retirees would be well advised to allocate their savings so they don't find themselves having to crystallise losses due to short-term market fluctuations.  All equity investments should be long-term.


----------



## joe sod

"All equity investments should be long term" , they should be long term but most are not held for the long term as is displayed by the market action in last few days. I'd say most of the stock market changed hands during the 2008 financial crash with minority of stocks held by the same owner throughout.


----------



## TheBigShort

Sarenco said:


> Is it?



I would consider it to be, yes.



Sarenco said:


> It's certainly not in the least bit unusual for equities to correct by 20% or more - historically the S&P500 has suffered a 20%+ pull back roughly once every 3.5 years on average.



I never said it was unusual.



Sarenco said:


> Decumulating retirees would be well advised to allocate their savings so they don't find themselves having to crystallise losses due to short-term market fluctuations. All equity investments should be long-term.



Thats good advice. But it is not only retirees that are affected. My post should have read "_a real concern" _and not "the real concern".

If you consider one train of thought for the recent market downturn, it is the prospect of returning inflation, supported in no small measure by wages growth and low unemployment.
If investors are spooked by low returns on their investments, it stands to reason that they will less inclined to invest. 
The knock on effect of reducing investments into the economy is what exactly?


----------



## Sarenco

I see the S&P500 had its best day yesterday since November 2016...


----------



## Brendan Burgess

delfio said:


> Listening to Paul Somerfield in the radio few moments ago was scary.



If you get scared by guys like this on the radio, then either don't invest in the stock market, or don't listen to the radio.


----------



## Fella

Sarenco said:


> I see the S&P500 had its best day yesterday since November 2016...



Still waiting to hear how much was wiped on to the stock market yesterday .


----------



## Brendan Burgess

Parker101 said:


> Since the stock market began, stocks rise and fall. Markets correct, recover, correct, recover. That's the economic cycle. We often lose sight of this due to the volume of white noise and so called experts out there. Then fear and emotion kick in with our decision making.  When Trump gleefully announced in a recent interview that the stock market was at its highest level ever, I sighed. Its not an everlasting gobstopper for Gods sake! Growth is not infinite. Best to look back historically at all the corrections, speed bumps and downturns in the stock market.....and we are still here. I suppose the key is to be diversified, different asset classes etc and not bet on one horse essentially.



Excellently put. 

But it's unlikely that the RTE would broadcast that as a reaction to a fall in the stock market.  No one would discuss it. But people are discussing Paul Sommerville's "Panic now, as it's cheaper than panicking later."


----------



## TheBigShort

99% of stock market reporting is simply click-bait or just white noise. As much as is being made out the recent 'correction', the media tend to overdo the 'rally'.
Its the 24/7 news cycle, got to keep the punters on board.


----------



## PGF2016

Brendan Burgess said:


> Paul Sommerville's "Panic now, as it's cheaper than panicking later."



I usually treat someone commenting on the stock market on the radio / TV as a vested interest that can and should be ignored.


----------



## Fella

PGF2016 said:


> I usually treat someone commenting on the stock market on the radio / TV as a vested interest that can and should be ignored.




Market corrections end when the same clowns who said it couldn't happen start telling you how much further it's going to go down.


_Stolen off twitter _


----------



## galway_blow_in

TheBigShort said:


> 99% of stock market reporting is simply click-bait or just white noise. As much as is being made out the recent 'correction', the media tend to overdo the 'rally'.
> Its the 24/7 news cycle, got to keep the punters on board.



like fox news and there " infotainment "

the likes of cnbc need to keep things sensational , hence every pullback is a potential 2008

i actually agree with sarenco about a 25% pullback not being a disaster , when it happened in 1987 , it took two years to recover but that was after a big rise from 1982 , the 50% plus drop in 2008 - early 2009 was a massive deal however , not only did it take more than twice as long to recover , its not like the market prior to crash had had a strong run , it was still no higher than in the year 2000 , the situation was even worse for those exclusively invested in europe ( germany being the exception ) who have now not  seen any real worthwhile  gains in decades and who would have been better putting there money in a savings account at the start of this century , lot of stress avoided


----------



## galway_blow_in

PGF2016 said:


> I usually treat someone commenting on the stock market on the radio / TV as a vested interest that can and should be ignored.



does that include certain irish stock brokers who give opinions on various companies outlook etc ?


----------



## TheBigShort

galway_blow_in said:


> i actually agree with sarenco about a 25% pullback not being a disaster , when it happened in 1987 , it took two years to recover but that was after a big rise from 1982 , the 50% plus drop in 2008 - early 2009 was a massive deal however , not only did it take more than twice as long to recover , its not like the market prior to crash had had a strong run , it was still no higher than in the year 2000 , the situation was even worse for those exclusively invested in europe ( germany being the exception ) who have now not seen any real worthwhile gains in decades and who would have been better putting there money in a savings account at the start of this century , lot of stress avoided



On the face of it, if you have 40% gains followed by 25% pull-back of course its no big deal (allowing for inflation over the period of investment and relative to returns on other investments outside the stock market).

I was thinking more in terms as to _why_ there is a pull-back at all. If markets continue on a downward trajectory for a sustained period it indicates all is not well in the wider economy. The recent ‘correction’, to me, implies nothing more than an interpretation of news. That interpretation may subsequently prove to be justified or unjustified. A stock market that continues on a downward trajectory over a sustained period indicates to me wider fundamental issues in the economy.

Personally I think stock markets are, in no insignificant amount, propped up by cheap money. This correction appears to have occurred on the news that wages growth has returned. Personally I would, at this juncture, interpret that as a positive.


----------



## galway_blow_in

TheBigShort said:


> On the face of it, if you have 40% gains followed by 25% pull-back of course its no big deal (allowing for inflation over the period of investment and relative to returns on other investments outside the stock market).
> 
> I was thinking more in terms as to _why_ there is a pull-back at all. If markets continue on a downward trajectory for a sustained period it indicates all is not well in the wider economy. The recent ‘correction’, to me, implies nothing more than an interpretation of news. That interpretation may subsequently prove to be justified or unjustified. A stock market that continues on a downward trajectory over a sustained period indicates to me wider fundamental issues in the economy.
> 
> Personally I think stock markets are, in no insignificant amount, propped up by cheap money. This correction appears to have occurred on the news that wages growth has returned. Personally I would, at this juncture, interpret that as a positive.



as i referred to earlier within the context of this pullback  , the news which applies to the u.s market doesnt in anyway apply to europe ( lofty valuations and planned rate rises ) yet europe has fallen further than the u.s year to date

where is the logic bar european markets having zero independence  ?


----------



## TheBigShort

galway_blow_in said:


> where is the logic bar european markets having zero independence ?



Are you questioning the efficiency of markets?


----------



## galway_blow_in

TheBigShort said:


> Are you questioning the efficiency of markets?



well ive never bought into the notion held by some that the market is always at the level it should be 

were that the case then it could be argued that buying the market two weeks ago was no less wise than today and only a denier of reality would advance this view , which is a different thing than saying you cant time the market , i accept that but there are undeniably better times to have  purchased


----------



## Sarenco

galway_blow_in said:


> europe has fallen further than the u.s year to date


In Euro terms, US equities are down roughly 5% YTD, whereas EZ equities are pretty much flat.

Not that market gyrations over such a short time period are proof of anything.


----------



## joe sod

I made the point before that the average holding period for stocks is now just 10 months so most of the market is not long term investors, I know the last 2 years was unusually quite but it must be the case that volatility is increasing all the time with the speed that people can sell large holdings in a click. I can see how people could liquidate a portfolio worth millions in a few seconds with the action on Monday but would be much slower in investing millions, they might take years to do that.


----------



## galway_blow_in

Sarenco said:


> In Euro terms, US equities are down roughly 5% YTD, whereas EZ equities are pretty much flat.
> 
> Not that market gyrations over such a short time period are proof of anything.



the VEUR  etf ( which covers the eurozone , uk and switzerland etc ) etf is down 3% according to google finance

the s + p ( in dollar terms ) is up slightly 0.85% , its down more than 2% in euro terms but still performing better than the european based etf

https://finance.google.com/finance?q=AMS:VEUR&ei=eQp7WuHuJMiXUKqeLQ

https://finance.google.com/finance?q=AMS:VUSA&ei=fQp7WvCPNITOswH65JrgBQ

here is an ishares etf which covers europe and its YTD performance

https://finance.google.com/finance?q=AMS:IMEU&ei=mgp7Wtj6E4PEUe6GlPgP


----------



## joe sod

There is an eff called svxy which basically makes money on the lack of volatility in the market, it fell off a cliff over the last week. Some guy on Twitter posted a funny tweet,
"Something previously only available to elite hedge funds, ETFS have truly democratized the act of losing all your money in a single day"
I suppose you could add bit coin to that but over a few weeks


----------



## galway_blow_in

joe sod said:


> There is an eff called svxy which basically makes money on the lack of volatility in the market, it fell off a cliff over the last week. Some guy on Twitter posted a funny tweet,
> "Something previously only available to elite hedge funds, ETFS have truly democratized the act of losing all your money in a single day"
> I suppose you could add bit coin to that but over a few weeks



is the instrument you are referring to not an ETN form rather than ETF ?


----------



## DK123

GUYS.BUY GOOD SHARES WHEN THEY ARE CHEAP AND KEEP THEM FOREVER.NO NEED TO MONITOR THE STOCK MARKET DAY AFTER DAY.NEVER WASTE A GOOD CRISIS.IF WE LOOK BACK AT THE PAST 30 YEARS IN SHARES AND PROPERTY, THEN WE CAN SEE GLIMMERS OF THE FUTURE.MY 10 CENTS WORTH.


----------



## JoeRoberts

DK123 said:


> GUYS.BUY GOOD SHARES WHEN THEY ARE CHEAP AND KEEP THEM FOREVER.NO NEED TO MONITOR THE STOCK MARKET DAY AFTER DAY.NEVER WASTE A GOOD CRISIS.IF WE LOOK BACK AT THE PAST 30 YEARS IN SHARES AND PROPERTY, THEN WE CAN SEE GLIMMERS OF THE FUTURE.MY 10 CENTS WORTH.


Have you any advice for the female readers?


----------



## RedOnion

galway_blow_in said:


> is the instrument you are referring to not in ETN form rather than ETF ?


That particular one is an ETF, but there are similar ETN derivatives. They're extremely complex instruments. I understand there's already attempts at a class action lawsuit over this one.


----------



## galway_blow_in

not that i sold or needed to sell since last july but i chuckle at the advice of some on this site who believe based on taxation rules in this country that  its better to simply  sell units for income than instead invest in companies which pay hefty dividends 

what do you do these days  if you want 5 k worth of stock from a 100 k valued portfolio ?

two weeks ago if the fund was worth 100 k and you sell the 5 k worth of units today for whatever expenditure required   , your portfolio is now down to 85 k as your 100 k fund   is down 10% this past fortnight 

sounds good but wholly impractical


----------



## galway_blow_in

RedOnion said:


> That particular one is an ETF, but there are similar ETN derivatives. They're extremely complex instruments. I understand there's already attempts at a class action lawsuit over this one.



glad im far too stupid to even know how to go about buying such WMD,s


----------



## joe sod

I see the US markets had another big sell off today another 4 percent down, interesting to see how next few weeks pan out


----------



## Mez!

galway_blow_in said:


> not that i sold or needed to sell since last july but i chuckle at the advice of some on this site



This is petty. I work on the assumption that all advice is given in good faith. It’s up to me to determine if I believe it to be sound and appropriate for me. 

Challenge and question, but don’t belittle.


----------



## galway_blow_in

Mez! said:


> This is petty. I work on the assumption that all advice is given in good faith. It’s up to me to determine if I believe it to be sound and appropriate for me.
> 
> Challenge and question, but don’t belittle.



" Sticks and stones "


----------



## Boyd

DK123 said:


> GUYS.BUY GOOD SHARES WHEN THEY ARE CHEAP AND KEEP THEM FOREVER.NO NEED TO MONITOR THE STOCK MARKET DAY AFTER DAY.NEVER WASTE A GOOD CRISIS.IF WE LOOK BACK AT THE PAST 30 YEARS IN SHARES AND PROPERTY, THEN WE CAN SEE GLIMMERS OF THE FUTURE.MY 10 CENTS WORTH.



Good advice, but please remove your CAPS lock, no need to SHOUT.


----------



## RedOnion

galway_blow_in said:


> two weeks ago if the fund was worth 100 k and you sell the 5 k worth of units today for whatever expenditure required , your portfolio is now down to 85 k as your 100 k fund is down 10% this past fortnight


I'll keep this as simple as i can. Let's look at the other option - dividend paying stocks. Say you've a stock paying a 5% dividend. If the market is down 10%, and your share god's ex-div, all other things being equal you'd be down to 85 as well, but have a bigger tax bill.


----------



## galway_blow_in

RedOnion said:


> I'll keep this as simple as i can. Let's look at the other option - dividend paying stocks. Say you've a stock paying a 5% dividend. If the market is down 10%, and your share god's ex-div, all other things being equal you'd be down to 85 as well, but have a bigger tax bill.



A 5% dividend stock doesn't reduce by 5% every quarter at ex dividend day


----------



## joe sod

DK123 said:


> GUYS.BUY GOOD SHARES WHEN THEY ARE CHEAP AND KEEP THEM FOREVER.NO NEED TO MONITOR THE STOCK MARKET DAY AFTER DAY.NEVER WASTE A GOOD CRISIS.IF WE LOOK BACK AT THE PAST 30 YEARS IN SHARES AND PROPERTY, THEN WE CAN SEE GLIMMERS OF THE FUTURE.MY 10 CENTS WORTH.



It's good advice to an extent but even Warren buffet no longer does this, he used to but he has been selling down long held large shareholdings in wells Fargo bank and wall mart. In the last 10 years there has been considerably more changes in his portfolio, he used to be a big investor in newspapers and Gillette. Indeed he used to use Gillette as an example of a buy and forget investment, he had to change that when the hipster generation came along. Many people also thought that with the banks, you could buy them and forget them


----------



## RedOnion

galway_blow_in said:


> A 5% dividend stock doesn't reduce by 5% every quarter at ex dividend day


I was taking a simple example where you wanted 5k from a 100k portfolio (your scenario, not mine). So if it's a quarterly dividend, it'd need to be a 20% yield to meet your cash requirements. Whatever - if it declares a 5k dividend, it will drop 5k after going ex-div.


----------



## galway_blow_in

RedOnion said:


> I was taking a simple example where you wanted 5k from a 100k portfolio (your scenario, not mine). So if it's a quarterly dividend, it'd need to be a 20% yield to meet your cash requirements. Whatever - if it declares a 5k dividend, it will drop 5k after going ex-div.



the dividend deduction is  a natural occurrence which will happen even the broader market is roaring higher  , the big sell off in the market right now means its a real hit if you need to sell units for income , take my portfolio , i had 144 k in the market last july but 50 k of it was in cash ( of which i used 20 k to buy glanbia shares a few days ago ) , the whole portfolio ( VEA + EZU  etf,s + 50k cash ) was worth 153 k three weeks ago , its worth less than where i started last july today as it was all ex U.S , had i taken out 10 k for income three weeks ago , it was happy days , today if i needed to take out income , im back to 133k , now had i taken out 10 k three weeks ago and the market roared higher another several percent , id also be left wondering should i have waited for a better opportunity to retrieve units

what im saying is , selling units for income involves too much observing the market as your capital can be severely eroded based on where the market is


----------



## RedOnion

galway_blow_in said:


> i repeat , a 5% paying stock doesnt drop by 5% every quarter so your point is flawed


I changed to amount, rather than percentage, because you needed 5k in your example, and we couldn't work with an annual dividend scenario. Can you tell me what happens when a share quoted at 100k when it goes ex-div after declaring a 5k dividend?


----------



## galway_blow_in

RedOnion said:


> I changed to amount, rather than percentage, because you needed 5k in your example, and we couldn't work with an annual dividend scenario. Can you tell me what happens when a share quoted at 100k when it goes ex-div after declaring a 5k dividend?



not getting into the mechanics of ex dividend , i understand it

im making the point that sharp sell offs greatly hinder and challenge the notion of selling units for income , you deplete your original holding , now im referring to funds rather than individual stocks in my own case , i didnt need to sell lately and dont need to sell anytime soon but were i to , i would be eating into my capital severely today compared to three weeks ago , corrections are nothing to worry about for those who dont need or want to take income from there portfolios but if you wanted to draw down 6% per annum , forget it ! , your timing would invariably   be off


----------



## Sarenco

Receiving a cash dividend and not reinvesting it in the same stock is exactly the same thing financially as selling stocks to the value of the dividend.  That's the case regardless of market movements.


----------



## Jim2007

Sarenco said:


> Receiving a cash dividend and not reinvesting it in the same stock is exactly the same thing financially as selling stocks to the value of the dividend.  That's the case regardless of market movements.



Nope.  Not unless it is a capital dividend and even then is is suspect.


----------



## Sarenco

Sorry Jim but you're wrong.

The payment of a dividend results a permanent reduction of the share price relative to what the price would have been had the dividend not been paid.  Dividends are not a free lunch.

A lot of posters seem to struggle with this concept for some reason.


----------



## Fire away

It is a free lunch when it is special capital reserve.


----------



## trasneoir

Fire away said:


> It is a free lunch when it is special capital reserve.


Can you elaborate? 
Unless this capital reserve was a secret, then it's value would have been priced into the company's pre-dividend share price, no?


----------



## DeclanDublin

delfio said:


> Listening to Paul Somerfield in the radio few moments ago was scary.




I heard this interview and likewise got a shiver up my spine. I do have LT shares invested in the US, and at some point I want to realign some of those shares, but I can wait till all this blows over. Assuming it does.:0)


----------



## joe sod

DeclanDublin said:


> I heard this interview and likewise got a shiver up my spine. I do have LT shares invested in the US, and at some point I want to realign some of those shares, but I can wait till all this blows over. Assuming it does.:0)



Everything got sold off indiscriminately , the US, European, Asian, even bonds, there were no safe havens. If you wanted to switch I presume now is as good a time as any unless you just want to go into cash. I'm no expert by the way just an article was reading made that point.


----------



## galway_blow_in

Sarenco said:


> Receiving a cash dividend and not reinvesting it in the same stock is exactly the same thing financially as selling stocks to the value of the dividend.  That's the case regardless of market movements.





joe sod said:


> Everything got sold off indiscriminately , the US, European, Asian, even bonds, there were no safe havens. If you wanted to switch I presume now is as good a time as any unless you just want to go into cash. I'm no expert by the way just an article was reading made that point.



the annoying part is europe doesnt have the same issues surrounding impending rate rises that the u.s does , nor does it have anything like the same lofty valuations , it still sold off every bit as hard as the u.s market and refused to bounce back until wall st had stabilised so hopefully europe is up monday 

europe has no mind of its own at all, the PE of the market could be 10 and it would tank after a wall st correction , you might as well just own the s + p if your going to be a passive investor in stocks , you have liquidity , the lowest management fees and the most diversified fund around


----------



## LoveTrees

DK123 said:


> GUYS.BUY GOOD SHARES WHEN THEY ARE CHEAP AND KEEP THEM FOREVER.NO NEED TO MONITOR THE STOCK MARKET DAY AFTER DAY.NEVER WASTE A GOOD CRISIS.



I disagree with the need to use the capital letters to make a point but I agree with the message. What I mean is that we have a four weeks rule anyway that needs to be respected (and paying CGT is a loss in the short term) so unless we monitor the ups and downs of the same share and speculate on it then as long as we diversify and compensate losing shares with overheated ones what's the sense in keeping checking? Also share investing is for the long run (minimum 20 years-period in my opinion) so my view is let's just sit back, relax and hope... Or am I missing something? I am reading "The Naked Trader" at present and unless ISA accounts are introduced in Ireland the same way they are treated in UK then we would need to look at share investments only as long term investment right because of the taxation regime... I don't see a way out...


----------



## DeclanDublin

The hullaballo in the stock markets in recent days got me reviewing my investment strategy (such as it is) and conclude that the reasons I bought the particular stocks ( in the US in particular) were still valid. Basic, underlying profitability, sound management, good product stream, and a reasonable (but not excessive) dividend income.  These fundamentals are still sound. I don't need to liquidate assets, and I'm in this for the long-haul. So I'm staying put.  The only concern I have is that, as a result of market price shifts, one stock amounts to a very substantial amount of my entire dollar investment. I want to correct this, but over time, to avoid  CGT as best I can.


----------



## DK123

Hi Love Trees.Sorry about the capital letters.This is only a small malfunction in my laptop.I agree completely with what you say.Also see [google]the Coffee Can Portfolio.The Ultimate in Long Term investing and do not "churn"  shares or funds as you waste too much in commissions.Big education for me to learn what dividends really are a few posts back.Another saying i like is "Buy good shares/funds when the market is down and dont just do something,stand there"


----------



## TheBigShort

There is a theory about the efficiency of stock markets. 

Its mostly garbage.


----------



## dub_nerd

Paul  Somerville writes about this week's carnage in the Sunday Indo.

Personally I shifted my pension into cash at the start of the week (or tried to -- it didn't happen until near the week end because the company seems to have a turning circle like the Titanic).


----------



## Gordon Gekko

dub_nerd said:


> Paul  Somerville writes about this week's carnage in the Sunday Indo.
> 
> Personally I shifted my pension into cash at the start of the week (or tried to -- it didn't happen until near the week end because the company seems to have a turning circle like the Titanic).



How old are you?


----------



## gnf_ireland

dub_nerd said:


> Personally I shifted my pension into cash at the start of the week (or tried to -- it didn't happen until near the week end because the company seems to have a turning circle like the Titanic).


This is a problem with anyone trying to time the market when dealing with pension companies - they are not very efficient when receiving instructions and takes days to act on them. This is why timing the market is a very dangerous thing to attempt
Obviously if you have you own self administered pension fund with a stock-broker account, this is a different matter as you have much more control.



Gordon Gekko said:


> How old are you?


Gordon, I know what you are going to say here, but there are people who will try and time the market to a degree. Currently the S&P has pulled back to early December 2017 levels - which are still pretty good returns for most people. Some people don't like this level of volatility and cannot handle it no matter what the age is. The massive challenge they will have is when to time putting the money back in - especially since most pension funds only allow 3 transactions cost free per year.



Edit to say there is no getting away from the fact that people are nervous about their pension funds, no matter what their ages and most people know someone who was royally stung during the last financial crises. Its hard to blame people for trying to time the market - or at least minimise potential losses in excess of 50%.


----------



## Brendan Burgess

gnf_ireland said:


> This is a problem with anyone trying to time the market when dealing with pension companies - they are not very efficient



That really is not the problem at all. 

The problem is that to time the market correctly, one has to get two decisions correct - the top of the market and the bottom of the market, or near enough to them.

Let's say that I anticipated last week's fall and sold off my stock market investments. 
I would be wondering now if I should get back in after a 10% fall. Or maybe wait until they fall a bit further? 
Say they drop another 10%? 

I would feel so clever that I would probably wait. Then suddenly the stock market increases. Is that the beginning of the recovery or a dead cat bounce? I would probably wait.  

Next thing stocks are higher than the price I sold them at. 

Many people are saying that there is a bubble in American stocks. So maybe it is right to sell. But if you do, get back in again when they are fairly priced. Don't try to time the exact bottom.

Brendan


----------



## gnf_ireland

Brendan Burgess said:


> That really is not the problem at all.


I guess Brendan this is the difference between proactively timing the market so you made the call a number of weeks ago versus reactively trying to time the market, when you are reacting to the events as they happened last week.
If you are reactive rather than proactive, there is an additional complication of the insurance companies non-real time platforms and the volatility during the last week. If you sent a sell instruction to say Zurich on Monday, who knows what price you would get for the units until they were sold. 
Its another complication in the timing issue



Brendan Burgess said:


> The problem is that to time the market correctly, one has to get two decisions correct - the top of the market and the bottom of the market, or near enough to them.


Absolutely - to get it right then people need to try and time the top and the bottom of the market. This is only know retrospectively, so anything other than that is simply a best guess at that moment in time.



Brendan Burgess said:


> I would feel so clever that I would probably wait. Then suddenly the stock market increases. Is that the beginning of the recovery or a dead cat bounce? I would probably wait.
> Next thing stocks are higher than the price I sold them at.


Yes, this is of course a risk - and one I imagine a large number of people will get hit with, especially in volatile markets



Brendan Burgess said:


> Many people are saying that there is a bubble in American stocks. So maybe it is right to sell. But if you do, get back in again when they are fairly priced. Don't try to time the exact bottom.


Solid advice


----------



## galway_blow_in

gnf_ireland said:


> This is a problem with anyone trying to time the market when dealing with pension companies - they are not very efficient when receiving instructions and takes days to act on them. This is why timing the market is a very dangerous thing to attempt
> Obviously if you have you own self administered pension fund with a stock-broker account, this is a different matter as you have much more control.
> 
> 
> Gordon, I know what you are going to say here, but there are people who will try and time the market to a degree. Currently the S&P has pulled back to early December 2017 levels - which are still pretty good returns for most people. Some people don't like this level of volatility and cannot handle it no matter what the age is. The massive challenge they will have is when to time putting the money back in - especially since most pension funds only allow 3 transactions cost free per year.
> 
> 
> 
> Edit to say there is no getting away from the fact that people are nervous about their pension funds, no matter what their ages and most people know someone who was royally stung during the last financial crises. Its hard to blame people for trying to time the market - or at least minimise potential losses in excess of 50%.



while the S +P is back to december 2017 levels , the FTSE european large cap etf is below april 2015 levels , its also below april 2017 levels


----------



## Brendan Burgess

galway_blow_in said:


> while the S +P is back to december 2017 levels , the FTSE european large cap etf is below april 2015 levels , its also below april 2017 levels



So which is fairly priced and which might be a bubble?

Brendan


----------



## Gordon Gekko

There is a word for people who are more than 10 years from retirement age and who are trying to trick in and out of the market and time it:

Idiots

This Paul Sommerville type stuff and media chatter is becoming incessant and will result in people having less money in retirement because they’ll have listened to the nonsense.


----------



## galway_blow_in

Brendan Burgess said:


> So which is fairly priced and which might be a bubble?
> 
> Brendan



i dont think it matters what price europe is as it has no independence from  what happens across the atlantic when it comes to stocks  ,  i just find it hard to get my head around the obvious reality that what happens in the u.s is the arbiter of everything elsewhere  , be it  rates , the bond market or perceived lofty equity valuations , doesnt seem to matter at all that the european market is so much cheaper or that it doesnt have the same live issues a foot

you would think europe was a large and diversified enough market for it to be reasonable to exclusively invest in that region but it seems not , in truth owning europe seems  much riskier than owning the single country of the usa , you often hear commentators in the press or tv speaking of europe being better value but they are mostly talking to an american audience who benefit from the rising euro and how that translates european stocks back to americans themselves , the same thing doesnt happen for us as a rising euro hurts european equities 

i suppose a global fund is the best as you are still predominantly u.s yet have exposure to europe too


----------



## galway_blow_in

Gordon Gekko said:


> There is a word for people who are more than 10 years from retirement age and who are trying to trick in and out of the market and time it:
> 
> Idiots
> 
> This Paul Sommerville type stuff and media chatter is becoming incessant and will result in people having less money in retirement because they’ll have listened to the nonsense.



if he hadnt been bearish for so long , you might give him a fair hearing but i recall him being on the vincent browne show several years ago and being all doom and gloom , him and constantine gurdiev


----------



## gnf_ireland

I think its relatively easy for those who are close to investments and markets to make comments that those who try to time it are idiots. However, for the man/woman on the street it is not that simple. They see the last financial crises and the impacts it had on people - some people losing life savings etc and its not so easy to sit tight. They see the portfolio down 10% and think its better to bail now than before its down 25%.

I think its fair to say the USA has been on one hell of a bull run for the last while and a correction is not a major surprise. The question is now big a correction it will be. If the markets end up down 25%, people will start to panic more I am guessing - or at least the cohort who occasionally look at their pension fund but don't really understand it.

I also think pension funds here are way too complex for the average punter. If mandatory registration to pensions is to be brought in, it needs to be explained and simplified. Something like the very cheap Lifepath type index funds with less than 0.5% total expense ratios should be used, targeting the persons retirement date - something similar to below


Will be interesting how mandatory pension registration will play out in terms of the above discussion on timing the market


----------



## galway_blow_in

gnf_ireland said:


> I think its relatively easy for those who are close to investments and markets to make comments that those who try to time it are idiots. However, for the man/woman on the street it is not that simple. They see the last financial crises and the impacts it had on people - some people losing life savings etc and its not so easy to sit tight. They see the portfolio down 10% and think its better to bail now than before its down 25%.
> 
> I think its fair to say the USA has been on one hell of a bull run for the last while and a correction is not a major surprise. The question is now big a correction it will be. If the markets end up down 25%, people will start to panic more I am guessing - or at least the cohort who occasionally look at their pension fund but don't really understand it.
> 
> I also think pension funds here are way too complex for the average punter. If mandatory registration to pensions is to be brought in, it needs to be explained and simplified. Something like the very cheap Lifepath type index funds with less than 0.5% total expense ratios should be used, targeting the persons retirement date - something similar to below
> 
> 
> Will be interesting how mandatory pension registration will play out in terms of the above discussion on timing the market



ive read that even after a 20% correction , historically the ( u.s anyway ) market has recovered within two years bar what happened in 2000 and of course 2008 , that would indicate to me that you dont need to be that patient to hold tight in the majority of downturns


----------



## gnf_ireland

galway_blow_in said:


> bar what happened in 2000 and of course 2008


Problem is those are the two that people remember


----------



## Gordon Gekko

So people with no understanding of markets or investments fancy their chances of chopping in and out of the market? Madness.


----------



## TheBigShort

Gordon Gekko said:


> There is a word for people who are more than 10 years from retirement age and who are trying to trick in and out of the market and time it:
> 
> Idiots
> 
> This Paul Sommerville type stuff and media chatter is becoming incessant and will result in people having less money in retirement because they’ll have listened to the nonsense.



I agree.

I do think that when these articles are published there should be some sort of clarification as to who the author is identifying when they speak of 'investors'. Its a very broad church.

Having read the Sommerville article, and considering his occupation, I can only imagine that he is referring to day-to-day investors, or money managers investing into pension funds, etc,  on other people's behalf?


----------



## gnf_ireland

Gordon Gekko said:


> So people with no understanding of markets or investments fancy their chances of chopping in and out of the market? Madness.


Maybe, but they are the ones who will be more influenced by the media and people like Paul Sommerville. The media will play up the "remember the financial crises etc". This is why I think people of a certain age should be locked into lifestyle funds for a period of time - for their own protection


----------



## dub_nerd

To answer the questions, I am early fifties and have already been retired for five years. My pension fund isn't that huge or, to be honest, hugely important to me. I live off other savings. But I kicked myself over the GFC which I anticipated but did nothing about. I anticipate this year may be a bad one for markets. If I'm wrong and forego a few percent gain, so be it. I think it's worth taking the chance. If there is a big drop in markets, you don't have to time things to the second to come out better off. I also have some exposure to the markets elsewhere (which I won't go into because I think people would be even more horrified ).


----------



## Fella

Reason I don't take my money out of stock market is cause I've no other use for it , I think people should only invest money they have no other use for in the stock market ,investing money you actually care about and are trying to protect will cause you to behave irrationally. Only invest what you can afford to lose , I think you need to genuinely think to yourself how will i feel if my investment halves tomorrow and actually imagine it if you can't take it then you have too much invested. 

Most people say they don't mind risk but when it comes down to it they do (I've seen this myself multiple times with former gambling friends). I remember a few years ago losing a lot of money on one particular event a lot of things had to happen to make my loss 100% of my money invested , I knew the risk and was happy to take the gamble it was a real black swam event and I lose more money than I was comfortable with , I didn't react in the best way and spent some time depressed about this loss , I was thinking I could of had a new car etc with that money it actually took a bit of time to get over it , I didn't expect to react that way so I made sure I never risked that much again , I know my limit now in regards losses as a more mature investor I remember and can recognise the non value plays I made when I had too much invested. If you only invest money you are fully prepared to lose you will make much wiser decisions with this money , taking it out and reinvesting it when/if there is a crash is going to melt your head trying to time it IMO. Anyway thats my mini rant on it , I'd happily bet that the people who left there money in from the start of this thread to the end of this thread or to a time period 10/20/30 years in the future will outperform anyone else who tried to time things.


----------



## gnf_ireland

Fella said:


> Only invest what you can afford to lose , I think you need to genuinely think to yourself how will i feel if my investment halves tomorrow and actually imagine it if you can't take it then you have too much invested.


Is this not a bit of a strange statement when people are talking about retirement/pension funds? I doubt many people can afford to lose their entire pension fund and be happy about it, yet all experts say to put it into equities. 
I agree (to a level) about non-pension investments based on a proper risk assessment.



Fella said:


> I didn't react in the best way and spent some time depressed about this loss


To be fair, you can have a reasonable attitude to risk, but I doubt anyone is happy about losing large amounts of money. We are not talking about the KLF here burning 1 million pounds in an attempt to win the turner prize !!! [probably showing my age now!!]


There is a fundamental difference in someone investing their pension fund in bitcoin (something notoriously volatile) and losing 50% and someone losing 50% on the Dow Jones 30 !


----------



## Fella

gnf_ireland said:


> Is this not a bit of a strange statement when people are talking about retirement/pension funds? I doubt many people can afford to lose their entire pension fund and be happy about it, yet all experts say to put it into equities.
> I agree (to a level) about non-pension investments based on a proper risk assessment.



I would only put money I absolutely didn't need into a pension fund and even then I'd have to be on the high tax and I would severely limit what I put into it , pensions to me are a good financial investment but a poor lifestyle investment ,I have read all the arguments about them been great investments and the tax free nature of the money growing etc etc but I am in no way convinced that people should save money now so they have it at aged 65 and can't touch it till then , I want to have my money now when my kids are young .When I am older I may not have the health to do what I want with my pension , I want to travel now I am not in favour of putting money away now for the future in the hope that A) myself and wife are in good health to enjoy it and B) it's not going to be fleeced by the government , I think B is a huge possibility people may say its not but I think the people with private pensions will be subsidising the people who made no sacrifices and left nothing . Nothing could convince me to put money into a pension pot .


----------



## Gordon Gekko

Fella,

It sounds like you want to have your cake and eat it.

The only trade-off is the lack of access until retirement age. And for that, you get all of the other positive stuff.

Gordon


----------



## galway_blow_in

Fella said:


> I would only put money I absolutely didn't need into a pension fund and even then I'd have to be on the high tax and I would severely limit what I put into it , pensions to me are a good financial investment but a poor lifestyle investment ,I have read all the arguments about them been great investments and the tax free nature of the money growing etc etc but I am in no way convinced that people should save money now so they have it at aged 65 and can't touch it till then , I want to have my money now when my kids are young .When I am older I may not have the health to do what I want with my pension , I want to travel now I am not in favour of putting money away now for the future in the hope that A) myself and wife are in good health to enjoy it and B) it's not going to be fleeced by the government , I think B is a huge possibility people may say its not but I think the people with private pensions will be subsidising the people who made no sacrifices and left nothing . Nothing could convince me to put money into a pension pot .



the state pension in its current form is unsustainable , the population is ageing , eventually politicians will have to cease showering the elderly with goodies , wont happen for a good few years yet but im forty and the goose will be long cooked by the time im sixty five


----------



## RETIRED2017

galway_blow_in said:


> the state pension in its current form is unsustainable , the population is ageing , eventually politicians will have to cease showing the elderly with goodies , wont happen for a good few years yet but im forty and the goose will be long cooked by the time im sixty five


Sixty seven or sixty eight by the time you retire The Reason politicians look over there shoulder is back in the eighties the people who are now retired went out on the street and took on both FF/FG/Labour and won,

The above statement says it all  about the forty something of today,


----------



## Sarenco

Fella said:


> I want to have my money now


Money that you want - or need - "now" should never be invested in equities.

In fact, in my opinion, money that you might need or want within 15 years shouldn't be invested in equities. 

Why anybody would choose to invest in taxable investments before maximising their tax advantaged pension options is beyond me.

Incidentally, most occupational pensions can be accessed at 55 and private pensions can be accessed at 60.


----------



## Fella

Sarenco said:


> Money that you want - or need - "now" should never be invested in equities.
> 
> In fact, in my opinion, money that you might need or want within 15 years shouldn't be invested in equities.
> 
> Why anybody would choose to invest in taxable investments before maximising their tax advantaged pension options is beyond me.



I don’t need the money I have invested in equities but if I do need it I have access to it , you don’t know what the future holds if I need 200k tomorrow for something I can liquidate my investments , if it’s in a pension pot it’s uselss to me . 

I pay low tax so investing at 20% tax savings is worthless in my opinion. 

I understand money and investments I understand how things my gut instinct is putting money away till retirement age is a bad move , I’ll save and invest myself it’s my money then I can liquidate it quickly if needs be , I’ve a large cash reserve I don’t see myself needing to liquidate it but I sleep better knowing I can , people can say what they like about governments not interfering they have before and I am of the strong belief they will raid pension funds in the future . There is no way I’m leaving a large portion of my wealth in a fund for the next 30+ years and hoping legislation doesn’t come in that effects that value , you can counter argue that they could tax my stock broker account but I can have that money out and back in my bank in a day , I may be wrong but 30 years is a long time for things to change . My spare money I don’t need is in equites it’s liquid self managed and if I need it it’s there it’s impossible to say what value that is worth nobody can predict the future but my gut tells me it’s worth more than the tax relief for pension contributions .


----------



## galway_blow_in

RETIRED2017 said:


> Sixty seven or sixty eight by the time you retire The Reason politicians look over there shoulder is back in the eighties the people who are now retired went out on the street and took on both FF/FG/Labour and won,
> 
> The above statement says it all  about the forty something of today,



You mean the demographic who took many  a bullet so your lot didn't have to have any recession at all


----------



## Sarenco

Fella said:


> I don’t need the money I have invested in equities but if I do need it I have access to it , you don’t know what the future holds if I need 200k tomorrow for something I can liquidate my investments , if it’s in a pension pot it’s uselss to me .


No, I obviously don't know what the future holds.  

But if your equity portfolio plunges 20% in the morning you won't have access to 100% of your money anymore - you will have to accept a 20% haircut if you want to liquidate your equity investments.

It's certainly true that the Government could expropriate pension savings at some point in the future.  Or anything else that they fancy.  Look at what happened to CGT rates, income tax, USC, DIRT, Exit tax, PRSI on unearned income, etc., during our most recent financial crisis.

The real advantage of pension savings that most people ignore is not the fact that you get to invest money before any tax deduction (i.e. alongside an effective interest free loan from the Government) but that any invest gains get to compound tax free.  That's a huge benefit over the long term.


----------



## Gordon Gekko

I’d echo all of Sarenco’s comments. Also, it’s hard to envisage a scenario where a 20% rate taxpayer gets hammered by any tightening of the rules. Neglecting pension investment in favour of personal investment is crazy in my view.


----------



## RETIRED2017

Gordon Gekko said:


> I’d echo all of Sarenco’s comments. Also, it’s hard to envisage a scenario where a 20% rate taxpayer gets hammered. Neglecting pension investment in favour of personal investment is crazy in my view.


People on 20% tax rate who can afford to save paying into a pension to max out there age allowed pension tax break should finish up with a very good pension as a % of there final salary even if they have to stop paying into pension at some stages of there working life provided the max out there payments in the early years of there working life,

Someone on 40% tax well see there take home wage drop by around 17.5% when you take into account USC and PRSI unless they are on a very high salary,
Someone on 20% tax will see there take home  wage drop by around 20%    when you take into account USC and PRSI


----------



## gnf_ireland

Fella said:


> I am not in favour of putting money away now for the future in the hope that A) myself and wife are in good health to enjoy it and B) it's not going to be fleeced by the government , I think B is a huge possibility people may say its not but I think the people with private pensions will be subsidising the people who made no sacrifices and left nothing . Nothing could convince me to put money into a pension pot .



So basically your approach is to spend most of your money now on various experiences, and once that is more of less spent on lifestyle, you then will be one of those who have made no sacrifices yourself and look for the tax payer to bail you out.

I do agree though that if the government is to bring in mandatory pension enrollment they need to firmly put legislation in place which does not allow pension funds to be raided in the future the same way as Michael Noonan did in the financial crises. This discussion needs to be brought front and centre with the next government - the current one is unlikely to implement it since they are the ones who raided them in the first place.


----------



## RETIRED2017

gnf_ireland said:


> So basically your approach is to spend most of your money now on various experiences, and once that is more of less spent on lifestyle, you then will be one of those who have made no sacrifices yourself and look for the tax payer to bail you out.
> 
> I do agree though that if the government is to bring in mandatory pension enrollment they need to firmly put legislation in place which does not allow pension funds to be raided in the future the same way as Michael Noonan did in the financial crises. This discussion needs to be brought front and centre with the next government - the current one is unlikely to implement it since they are the ones who raided them in the first place.


I suspect you are not taking into account the 15 billion in the National pension reserve fund also spent by Noonan on the Banks

I suspect no TD  looked for the 3.4Billion taken in from selling 28.75% of AIB to be returned to the Reserve pension Fund,

At the next election remember to ask why they did not return the money to the reserve pension Fund ,

let them know  they will not be happy after the Election when the find out how you feel about the money being taken and not returned to Fund having being paid back,


----------



## Philip S

at times some of the above sounds like all your eggs in one basket logic. 
I'm 31 now god only knows what age i will access the state pension from. I think its looking like 68 now. So i'm left in the position i can access my private pension from 60, my job will kick me out at 65 and i wont get the state pension till 68. When i look at what to do with my spare money i break it up into 3 places


cash on demand (rainy day fund)
shares 
Pension 

at the moment its 20:20:60 is how its braking up. Soon savings for a deposit will get added in as well The aim is to get it to even split with the above 3 to start with. My logic with the shares is the money is there if i need it but don't expect to need it for next 20 years.


----------



## gnf_ireland

RETIRED2017 said:


> I suspect you are not taking into account the 15 billion in the National pension reserve fund also spent by Noonan on the Banks
> 
> I suspect no TD looked for the 3.4Billion taken in from selling 28.75% of AIB to be returned to the Reserve pension Fund,


no I am not talking about any of that - although all valid points.
I am talking about the raiding of the private pension funds with the pension levy, which is akin to attacking deposit holders accounts.

At the next election, I have one simple question for the politicians that knock on my door - I want to know how they are going to ensure that after 40 plus years paying PRSI that I will have a State pension fund to draw down when I retire AND how are they proposing to fund it?


----------



## gnf_ireland

Philip Slattery said:


> I'm 31 now god only knows what age i will access the state pension from. I think its looking like 68 now. So i'm left in the position i can access my private pension from 60, my job will kick me out at 65 and i wont get the state pension till 68.


I am 42 - so at the moment I am 26 years away from whatever I may potentially get from a state pension
Realistically, I believe this will be raised to 70 by the time I get towards retirement. I am hoping it will not be raised above that mark

The other issue is the amount of people in their 60's who are in poor health, or have health issues that would stop them from working. This is growing and likely to grow further over the years - despite advances in medicine



Philip Slattery said:


> My logic with the shares is the money is there if i need it but don't expect to need it for next 20 years.


While a noble principle, the reality is there is considerable taxation on investment type assets in Ireland whether it be deposit, shares or unit funds. 

In order to improve the financial well-being of the population, we really need to introduce some sort of ISA type model that allows people to save modest amounts of money without being stung alive with tax. Even if the limit was 3-6k a year, it would be a start and people may be more inclined to have some sort of rainy day fund !


----------



## RETIRED2017

gnf_ireland said:


> no I am not talking about any of that - although all valid points.
> I am talking about the raiding of the private pension funds with the pension levy, which is akin to attacking deposit holders accounts.
> 
> At the next election, I have one simple question for the politicians that knock on my door - I want to know how they are going to ensure that after 40 plus years paying PRSI that I will have a State pension fund to draw down when I retire AND how are they proposing to fund it?


I am totally in agreement with you The problem we have in this Country go back to the fact FF / FG and Labour are the same party  we have copped on to labour now we need to find a party who will look after the people who worked all of there life seen over 15%  PRSIA 1 taken in payroll only to see more groups Parachuting in to rob there prsi fund every few years by FF/FG and Labour,

I expect SF will be the same as Labour in government looking after there own,

WE need to find a party at present to look after the people who have no choice but see around 15% of there payroll taken for 40 years or more only to see people who pay very little get the same pension as them ,

If the Government want to add in people to the same fund as people  who see 15% taken in payroll let them pay 650000k into the fund up front for each person the parachute in,


----------



## Fella

Sarenco said:


> No, I obviously don't know what the future holds.
> 
> But if your equity portfolio plunges 20% in the morning you won't have access to 100% of your money anymore - you will have to accept a 20% haircut if you want to liquidate your equity investments.



This argument makes no sense to me , your assuming my portfolio hasn't grown at all and even if it lost 20% i'd rather have 80% of something than 100% of nothing. I can't access my pension till retirement . 
What if you found out a kid was really sick and needed to go to America to fund treatment? What use is 200k in a pension to me then? I'd much rather instant access to 80% of that money , it's hard to put a value on the instant access to that money , you have put a value on it and to you pension investment is worth it , to me its not , not having access to that amount of money until retirement I would need to be compensated a lot more.



Sarenco said:


> It's certainly true that the Government could expropriate pension savings at some point in the future.  Or anything else that they fancy.  Look at what happened to CGT rates, income tax, USC, DIRT, Exit tax, PRSI on unearned income, etc., during our most recent financial crisis.
> 
> .



And if they tax pensions what can you do other than sit there and take it , I can move my money out of my investments I might decide to buy a place abroad , cash up and leave the country altogether or anything else I chose to do , again this non financial value is huge to me.



Gordon Gekko said:


> I’d echo all of Sarenco’s comments. Also, it’s hard to envisage a scenario where a 20% rate taxpayer gets hammered by any tightening of the rules. Neglecting pension investment in favour of personal investment is crazy in my view.



And equally I think investing in something that you don't get back for 30+ years in my case is crazy when I strongly believe the government are going to raid pension funds in the future. 



This is a not a straight forward right or wrong decision its a personal judgement call based on all the facts available , I think locking money away is crazy based on what I have said about not been able to put a value on having access to money when you need it for whatever or moving it to be avoid penal taxes or an opportunity that may arise , maybe i'll buy a place abroad with my money and retire at 50 to spain , you cannot put a value on that , the fact the government has shown capacity to raid private pensions in the past I think people that invest are extremely naive to believe they won't be again and paying for the people that were'nt so prudent in their planning.


----------



## RETIRED2017

Fella said:


> This argument makes no sense to me , your assuming my portfolio hasn't grown at all and even if it lost 20% i'd rather have 80% of something than 100% of nothing. I can't access my pension till retirement .
> What if you found out a kid was really sick and needed to go to America to fund treatment? What use is 200k in a pension to me then? I'd much rather instant access to 80% of that money , it's hard to put a value on the instant access to that money , you have put a value on it and to you pension investment is worth it , to me its not , not having access to that amount of money until retirement I would need to be compensated a lot more.
> 
> 
> 
> And if they tax pensions what can you do other than sit there and take it , I can move my money out of my investments I might decide to buy a place abroad , cash up and leave the country altogether or anything else I chose to do , again this non financial value is huge to me.
> 
> 
> 
> And equally I think investing in something that you don't get back for 30+ years in my case is crazy when I strongly believe the government are going to raid pension funds in the future.
> 
> 
> 
> This is a not a straight forward right or wrong decision its a personal judgement call based on all the facts available , I think locking money away is crazy based on what I have said about not been able to put a value on having access to money when you need it for whatever or moving it to be avoid penal taxes or an opportunity that may arise , maybe i'll buy a place abroad with my money and retire at 50 to spain , you cannot put a value on that , the fact the government has shown capacity to raid private pensions in the past I think people that invest are extremely naive to believe they won't be again and paying for the people that were'nt so prudent in their planning.


At present lobby groups are raiding the prsi Fund indirectly  if lobby groups want the same pension as people who seen  15% prsi of there payroll go to the PRSI FUND,
Lobby Groups  should seek to have there pension paid from general taxation,


----------



## Gordon Gekko

Employment-related pension funds can be accessed at age 50; that’s hardly restrictive, is it?

You are entitled to do what you like as it’s your money, but that doesn’t change the fact that it’s an insane strategy.

No doubt you could insure against the black swan events you’re worried about with a view to contributing to a pension and still be better off.


----------



## blured

galway_blow_in said:


> the state pension in its current form is unsustainable , the population is ageing , eventually politicians will have to cease showering the elderly with goodies , wont happen for a good few years yet but im forty and the goose will be long cooked by the time im sixty five




As you said, population aging, more people will be impacted by changing the pension rules, which means more voters. I doubt any political party will grasp this nettle


----------



## galway_blow_in

blured said:


> As you said, population aging, more people will be impacted by changing the pension rules, which means more voters. I doubt any political party will grasp this nettle



well the electorate got what it wanted on this issue up to now in so far as the over sixties were a disproportionately large percentage of the vote , every party tripped over themselves to make promises to increase the state pension ( willie o dea and regina doherty being the biggest offenders ) and pensioners saw no real cuts post crash bar trivial reductions in heating allowances during months when the weather isnt even cold , there were cuts to very wealthy pensioners in terms of medical card thresholds but these income levels  were above where most working people earn per year on average 

its going to take a massive change in public mindset to deal with this time bomb , most dont realise just how spoiled the elderly currently are and that anyone who is thirty today wont be anywhere as well looked after by government


----------



## RETIRED2017

blured said:


> As you said, population aging, more people will be impacted by changing the pension rules, which means more voters. I doubt any political party will grasp this nettle


Not so sure no political party will grasp the nettle ,
The amount of people in this country who pay PRSI under the payroll system seeing 15% going into the PRSI  Fund only to see the likes of FF/FG and LABOUR  squander it on lobby groups ,

The day will come when one of the Political party or a New Political party will come into being with a slogan WE are needed to keep FF/FG /SF and Labour honest and ensure people who have paid  PRSI into a fund are protected they only need to hold the balance of power for it to work

Look at how the IFA Campaign worked to get there Members and others into the PRSI FUND ahead of the review that is coming up,

It made more since for the Prsi Fund point of view to wait until the review was completed first before parachute more into a fund already in trouble ,

Now people will long term have to pay more PRSI to fund our new visitors,

Most have being fattening them self With a Private pension on the savings made by not paying PRSI,


----------



## RETIRED2017

RETIRED2017 said:


> Not so sure no political party will grasp the nettle ,
> The amount of people in this country who pay PRSI under the payroll system seeing 15% going into the PRSI  Fund only to see the likes of FF/FG and LABOUR  squander it on lobby groups ,
> 
> The day will come when one of the Political party or a New Political party will come into being with a slogan WE are needed to keep FF/FG /SF and Labour honest and ensure people who have paid  PRSI into a fund are protected they only need to hold the balance of power for it to work
> 
> Look at how the IFA Campaign worked to get there Members and others into the PRSI FUND ahead of the review that is coming up,
> 
> It made more since for the Prsi Fund point of view to wait until the review was completed first before parachute more into a fund already in trouble ,
> 
> Now people will long term have to pay more PRSI to fund our new visitors,
> 
> Most have being fattening them self With a Private pension on the savings made by not paying PRSI,



not one  political party or TD is Questioning why the Department has not released the figures it is expect that the PRSI Fund will take in around 380 million more than it paid out in 2017  they are working on making sure it is squandered on lobby groups  first,


----------



## gnf_ireland

galway_blow_in said:


> its going to take a massive change in public mindset to deal with this time bomb , most dont realise just how spoiled the elderly currently are and that anyone who is thirty today wont be anywhere as well looked after by government


Absolutely. What you will see if a major divide between public and private sector pensions as well, deepening the mistrust between the two groups. Private sector state pension will rise to 70

The problem is it needs to be tackled now for someone due to retire in 2040, to allow people some level of forward planning to cater for this. No point pulling the rug under their feet in 2035 just before they are due to retire.

My personal view is there should be no contributory state pension - there should be a mandatory pension scheme for everyone who is working with at least 5% contributions from employees and employers each going into it (numbers up for discussion but the higher the better). This can come off current PRSI contributions, or at least reduce them somewhat. When people retire, they should be eligible for a means tested pension based on their income & wealth. So if someone is sitting on a 1 million asset and minimum income, they need to downsize to accommodate their revised circumstances. Those who have little or nothing should get some sort of assistance from the government - effectively the safety net !


----------



## Fella

Gordon Gekko said:


> Employment-related pension funds can be accessed at age 50; that’s hardly restrictive, is it?
> 
> You are entitled to do what you like as it’s your money, but that doesn’t change the fact that it’s an *insane *strategy.
> 
> No doubt you could insure against the black swan events you’re worried about with a view to contributing to a pension and still be better off.



You cannot even be serious with this comment? Insane? what not to invest at 20% tax relief towards a pension? Give me a break even people who are pro pensions that I have spoke to and work in the pensions industry are on the fence about it been worthwhile for lower tax rate payers.

I could counter that argument with insanity is expecting your pension fund that was raided before to remain untouched by future governments , open your eyes to the way the world is going , there are going to be more pensioners than ever in years to come the majority of these are going to have not plans in place , where is the money going to come from? It's always the same the ones who made sacrifices will be funding the ones that didn't .


----------



## galway_blow_in

gnf_ireland said:


> Absolutely. What you will see if a major divide between public and private sector pensions as well, deepening the mistrust between the two groups. Private sector state pension will rise to 70
> 
> The problem is it needs to be tackled now for someone due to retire in 2040, to allow people some level of forward planning to cater for this. No point pulling the rug under their feet in 2035 just before they are due to retire.
> 
> My personal view is there should be no contributory state pension - there should be a mandatory pension scheme for everyone who is working with at least 5% contributions from employees and employers each going into it (numbers up for discussion but the higher the better). This can come off current PRSI contributions, or at least reduce them somewhat. When people retire, they should be eligible for a means tested pension based on their income & wealth. So if someone is sitting on a 1 million asset and minimum income, they need to downsize to accommodate their revised circumstances. Those who have little or nothing should get some sort of assistance from the government - effectively the safety net !



most believe that those in receipt of the state pension more than covered ( what they are in receipt of now ) the cost in PRSI contributions down the years , the truth is very different , its the working young who are paying for the state pension today , that was sort of ok when you had four workers for every retiree but that wont be the case in a few decades

there isnt a scintilla of evidence that the government is attempting to curb the appetite of pensioners or those about to become pensioners , minister regina doherty is particularly voracious in her desire to heap goodies upon the elderly , she is of course constantly looking over her shoulder at willie o dea who these days appears to be spokesperson for pensioner largesse

there has been a massive increase in spending on the elderly this past twenty years , it dwarfs the increases in the public sector pay bill percentage wise


----------



## Gordon Gekko

Fella said:


> You cannot even be serious with this comment? Insane? what not to invest at 20% tax relief towards a pension? Give me a break even people who are pro pensions that I have spoke to and work in the pensions industry are on the fence about it been worthwhile for lower tax rate payers.
> 
> I could counter that argument with insanity is expecting your pension fund that was raided before to remain untouched by future governments , open your eyes to the way the world is going , there are going to be more pensioners than ever in years to come the majority of these are going to have not plans in place , where is the money going to come from? It's always the same the ones who made sacrifices will be funding the ones that didn't .



“Raided” is massively overstating it for starters; an average of 0.54% was taken each year for five years during the greatest economic crisis in the history of the State. Hardly cataclysmic.

And with regard to choosing personal investments over pension investments, the numbers don’t lie. The choice is to invest post-tax monies in a manner that attracts tax all the way along versus investing pre-tax monies in a completely tax-free environment for a long period of time and then extracting a decent chunk of that tax-free with the rest at 20%, a lower USC rate, and no PRSI (post 66).


----------



## RETIRED2017

galway_blow_in said:


> most believe that those in receipt of the state pension more than covered ( what they are in receipt of now ) the cost in PRSI contributions down the years , the truth is very different , its the working young who are paying for the state pension today , that was sort of ok when you had four workers for every retiree but that wont be the case in a few decades
> 
> there isnt a scintilla of evidence that the government is attempting to curb the appetite of pensioners or those about to become pensioners , minister regina doherty is particularly voracious in her desire to heap goodies upon the elderly , she is of course constantly looking over her shoulder at willie o dea who these days appears to be spokesperson for pensioner largesse
> 
> there has been a massive increase in spending on the elderly this past twenty years , it dwarfs the increases in the public sector pay bill percentage wise



Anyone who seen  prsi over 19% taken from payroll at one stage in the eighties and over 15% on average from payroll until the retired most feel the paid enough in .I know where I worked I can go back to the eighties when we first put in a system where you got paid your wages if you were out sick In the old days the prsi Cheque had to be returned to the company it was monitored  very closely .I remember at one stage the Company would look back over five years to see if there was a trend developing over several years I remember being amazed at how little was paid out over five years compared to the amount taken in payroll each week it was an eye opener the people in full time work with over 40 years stamp have paid enough to cover there pension,


----------



## gnf_ireland

galway_blow_in said:


> most believe that those in receipt of the state pension more than covered ( what they are in receipt of now ) the cost in PRSI contributions down the years , the truth is very different , its the working young who are paying for the state pension today , that was sort of ok when you had four workers for every retiree but that wont be the case in a few decades



If my maths are anything close to correct - the state pension pot would cost around 300k for every pensioner. It takes a long time for most to save up a pension pot of that size



galway_blow_in said:


> there isnt a scintilla of evidence that the government is attempting to curb the appetite of pensioners or those about to become pensioners , minister regina doherty is particularly voracious in her desire to heap goodies upon the elderly , she is of course constantly looking over her shoulder at willie o dea who these days appears to be spokesperson for pensioner largesse


And this is the madness of it all. This bubble is going to fail miserably at some stage and it is the likes of myself (aged 42 at the moment) who will feel the real pain of this.



Fella said:


> I could counter that argument with insanity is expecting your pension fund that was raided before to remain untouched by future governments , open your eyes to the way the world is going , there are going to be more pensioners than ever in years to come the majority of these are going to have not plans in place , where is the money going to come from? It's always the same the ones who made sacrifices will be funding the ones that didn't .


And to be fair, there is huge merits in what is being said here. Its the same people who end up paying and those who made no provisions for the future will get the handouts. That said, if the private pension funds were attacked again with another pension levy, I would hope it would bring people to the streets and say enough is enough. If they done this after mandatory enrollment into a pension fund was introduced, the numbers impacted would be much larger as well


----------



## gnf_ireland

Gordon Gekko said:


> “Raided” is massively overstating it for starters; an average of 0.54% was taken each year for five years during the greatest economic crisis in the history of the State. Hardly cataclysmic.



To be fair there were people who were impacted financially who had just had their pension funds crushed as a result of the greatest economic crisis in the history of the state.
But it was not that - it was the principle that the government could simply tap this fund any time they liked. They did not dare touch deposit accounts in the state, but pension funds were fair game. This to me is wrong.
They should have stopped the tax relief on the money put into the pension fund or reduced the cap on the size of the pension fund etc - but raiding the money in it set a very dangerous precedence and that is the worrying aspect of it.


----------



## Ceist Beag

gnf_ireland said:


> *it was the principle that the government could simply tap this fund any time they liked. They did not dare touch deposit accounts in the state, but pension funds were fair game. This to me is wrong.*


This. 100% agree gnf, it's not the amount they took, it's that they saw fit to take it. It was rewriting the rules to allow theft as far as I'm concerned.


----------



## RETIRED2017

Ceist Beag said:


> This. 100% agree gnf, it's not the amount they took, it's that they saw fit to take it. It was rewriting the rules to allow theft as far as I'm concerned.



They will be calling to your door looking for your vote are you going to tell them you do not vote for guys or girls who robbed you unless the return the money before election day,

That is the only way to ensure you don't get robbed again,


----------



## Gordon Gekko

How will you feel 20/30/40 years from now when you could have had a much larger pension pot but forgoed the attractive tax breaks in favour of doing your own thing?

All because of a 0.54% tax that was brought in temporarily whilst the State was bankrupt!


----------



## orka

Gordon Gekko said:


> And with regard to choosing personal investments over pension investments, the numbers don’t lie. The choice is to invest post-tax monies in a manner that attracts tax all the way along versus investing pre-tax monies in a completely tax-free environment for a long period of time and then extracting a decent chunk of that tax-free with the rest at 20%, a lower USC rate, and no PRSI (post 66).


The numbers don't lie but they are based on assumptions, not immovable (over 20/30/40 years) facts.  The more detailed and comprehensive numbers I have seen indicate that a pension is very likely the more sensible investment for someone currently on high rate tax who expects to be on low rate/no tax in retirement.  For a high rate taxpayer who expects any additional pension income to be taxed at higher rate in retirement, it is very marginal - you really have to assume zero worsening of the taxation of pensions (still allowed 25% lump sum tax free, still lower USC and no PRSI - would you bet your house on these being unchanged?).  Investing in a pension as a lower rate tax payer who might pay higher rate on the pension proceeds in retirement is madness. 



Gordon Gekko said:


> How will you feel 20/30/40 years from now when you could have had a much larger pension pot but forgoed the attractive tax breaks in favour of doing your own thing?  All because of a 0.54% tax that was brought in temporarily whilst the State was bankrupt!


Overall it came out as about 2.4%.  So my pension effectively has a permanent 2.4% surcharge tax applied to it throughout my retirement.  I haven't put another cent into pension investments since and don't intend to add anything more to my 'sitting duck' funds again.


----------



## Gordon Gekko

The pension sceptics are the equivalent of people claiming that the Earth is flat.

Who would get relief at 20% and end up paying tax at 40%?!

And what hasn’t been mentioned is the far greater effect that taxes have on the non-pension investments of a 20% rate taxpayer; personal investments are often taxed at 41% or 33%.

Which of the following will outperform in every scenario?

- €80 invested personally for (say) 30 years with income and gains taxed on an ongoing basis at rates of 20%/33%/41%

- €100 invested via a pension for 30 years with income and gains arising tax-free for the entire period, with 25% of the accumulated value paid out tax-free and the balance drawn-down at rates ranging between 0% and 22%

I would hope that the answer is obvious.


----------



## Fella

Gordon the large majority of your posts on this forum seems to be pro pension you either work for a pension company or you been extremely naive , I rang a friend of mine who works for a pension company he told me you'd be mad to pay into a pension on the low tax. You are the most extreme pro pension person I have come across I am not sure who you are trying to convince yourself or others.


----------



## Gordon Gekko

Fella said:


> Gordon the large majority of your posts on this forum seems to be pro pension you either work for a pension company or you been extremely naive , I rang a friend of mine who works for a pension company he told me you'd be mad to pay into a pension on the low tax. You are the most extreme pro pension person I have come across I am not sure who you are trying to convince yourself or others.



I do not work for a pension company, nor am I naive.

I simply “get” the advantages of pension funding.

But seeing as we’re getting personal, I fear that, based on your posts, you are foolish when it comes to your own financial affairs and I suspect that your “friend” is probably one of the shiny suited spoofers who make up the bulk of people operating in the pensions space.


----------



## Fella

Gordon Gekko said:


> I do not work for a pension company, nor am I naive.
> 
> I simply “get” the advantages of pension funding.
> 
> But seeing as we’re getting personal, I fear that, based on your posts, you are foolish when it comes to your own financial affairs and I suspect that your “friend” is probably one of the shiny suited spoofers who make up the bulk of people operating in the pensions space.



thanks happy pancake day


----------



## orka

Gordon Gekko said:


> Who would get relief at 20% and end up paying tax at 40%?!


A young professional?


Gordon Gekko said:


> Which of the following will outperform in every scenario?
> 
> - €80 invested personally for (say) 30 years with income and gains taxed on an ongoing basis at rates of 20%/33%/41%
> 
> - €100 invested via a pension for 30 years with income and gains arising tax-free for the entire period, with 25% of the accumulated value paid out tax-free and the balance drawn-down at rates ranging between 0% and 22%
> 
> I would hope that the answer is obvious.


Allow me to re-jig your scenarios a bit:

- €80 invested directly at very low one-off cost in low(no)-dividend/high-growth shares and held for 30 years, then drawn down periodically with CGT payable

- €100 invested via a pension for 30 years with income and gains arising tax-free for the entire period BUT with ongoing annual management fees, with 25% (or some other value, possibly zero, that the government of the day deems appropriate to apply to those fat cats in possession of their own pension funds) of the accumulated value paid out (possibly) tax-free and the balance drawn-down at rates ranging between 0% and 49% (current rates, not guaranteed in anyway to be remotely similar to the rates that will apply in your retirement).

If the government could (but they can’t…) rock-solid guarantee that they would not apply another pension levy AND that 25% would always be tax-free AND that PRSI would never apply AND that low-rate USC would always apply AND that taxes will not be greater than they are today, then maybe you could have your flat earth discussion.  As it is, you’re hoping things won’t change.  I personally don’t think hope is a great strategy when it comes to planning for my retirement.


----------



## Gordon Gekko

This discussion is a waste of time.

You’re right, the Earth is flat.


----------



## orka

The earth is not flat.

Pensions are not always the best option for everyone at every stage of their working life.

[I also don't agree that this discussion is a waste of time.  If more people understood pensions, when they are and are not the best option AND what the risks (current and potential) are, it would be a good thing.  Repeating the mantra 'pensions always good' doesn't make it so.]


----------



## Daddy Ireland

I'm enjoying this.  Please don't stop now.


----------



## Daddy Ireland

Just to add over 35k views so Gordon a lot of viewers do not consider this a waste of time.  Is that a top 20 thread  on these forums anyone ?


----------



## Gordon Gekko

orka said:


> The earth is not flat.
> 
> Pensions are not always the best option for everyone at every stage of their working life.
> 
> [I also don't agree that this discussion is a waste of time.  If more people understood pensions, when they are and are not the best option AND what the risks (current and potential) are, it would be a good thing.  Repeating the mantra 'pensions always good' doesn't make it so.]



It is very difficult to have a rational discussion with people whose default argument is that the State might reintroduce an immaterial measure that was in situ briefly during the biggest economic crisis in the history of the modern world. 

In the face of maths, one gets tinfoil hat stuff.


----------



## Ceist Beag

Gordon Gekko said:


> How will you feel 20/30/40 years from now when you could have had a much larger pension pot but forgoed the attractive tax breaks in favour of doing your own thing?
> 
> All because of a 0.54% tax that was brought in temporarily whilst the State was bankrupt!


Why do you assume that those objecting to the temporary "tax" have all stopped contributing to their pension? Some of us might just have been pointing out that the temporary "tax" was 100% wrong in our view, that even if you might not think so Gordon, in my view it did damage the pension industry in that it caused some (not all!) people to consider alternative options of funding their retirement, and set a very dangerous precedent. I know most people I work with were fuming about this raid and if it were to happen again, as gnf said, I would hope that it would bring people out on to the streets.
I still see the merits in contributing to a pension but I absolutely will bring this topic up with to any candidate who comes to my door in the next election campaign (and would have said it at the last had anyone bothered to call!).


----------



## blured

orka said:


> A young professional?
> - €80 invested directly at very low one-off cost in low(no)-dividend/high-growth shares and held for 30 years, then drawn down periodically with CGT payable



What is this magical "high-growth" share that will grow for 30 years that we can invest in and forget about?

I'm with Gordon - I do not think there is anyone out there that, whilst maintaining their own job and not being a full time trader, that can beat the 20% advantage that comes with investing into your pension for a person on the lower tax rate. 

Even if the tax environment changes as you say, the lump sum changes, PRSI would become applicable and USC increases - that is talking about the future. Right now, the investment is pretty much tax free. And, in this future where the Government of the day is "raiding" private pensions again and increasing taxes, what makes you think that the Capital Gains Tax that will be payable on the individual share you have picked won't also be affected by an obviously cash needy Government?


----------



## galway_blow_in

i know the government never think past the next election but park that for a moment , do the government not invest in the markets themselves when it comes to building a future ( pension ) well to draw from for the then retired ? , i realise they tax the young today to fund the state pension as well  but is this not combined with funds attained from the markets down the years ?

id be a lot more worried about the state itself being in a position to take care of me in thirty years , i would not want to have only that life boat to hop into when i reach seventy , the threat of the government dipping into my private pension would be lower down the list of fears , if a future government were to start robbing private pension holders on a grand scale , im not sure it would be the only problem facing the country and its people , if the government were so malevolent as to start robbing private pensions , why would someone then think they would be all sunshine and lollipops towards those without a private pension in the first place ?


----------



## cremeegg

galway_blow_in said:


> do the government not invest in the markets themselves when it comes to building a future ( pension ) well to draw from for the then retired ?



No, the government does not invest in the markets to build a future pension fund. In fact the government does not currently hold any of the PRSI it collects to pay future benefits.


----------



## Gordon Gekko

Ceist Beag said:


> Why do you assume that those objecting to the temporary "tax" have all stopped contributing to their pension? Some of us might just have been pointing out that the temporary "tax" was 100% wrong in our view, that even if you might not think so Gordon, in my view it did damage the pension industry in that it caused some (not all!) people to consider alternative options of funding their retirement, and set a very dangerous precedent. I know most people I work with were fuming about this raid and if it were to happen again, as gnf said, I would hope that it would bring people out on to the streets.
> I still see the merits in contributing to a pension but I absolutely will bring this topic up with to any candidate who comes to my door in the next election campaign (and would have said it at the last had anyone bothered to call!).



Because posters have stated that they’re avoiding pensions for fear of another pension levy.


----------



## RETIRED2017

cremeegg said:


> No, the government does not invest in the markets to build a future pension fund. In fact the government does not currently hold any of the PRSI it collects to pay future benefits.


Think it changed in 2005 for the Prsi fund  That is why you have the IFA and others gate crashing and making sure they are inside the fund before the review later this month,


----------



## dub_nerd

RETIRED2017 said:


> Think it changed in 2005 for the Prsi fund  That is why you have the IFA and others gate crashing and making sure they are inside the fund before the review later this month,



I think you are mistaken. There is no fund to pay State pensions out of. Your PRSI contributions get spent by the government as soon as they come in the door. There is no pot of money, no investments, and even the pension reserve fund that was put aside for a rainy day was spent during the GFC. All pensions are paid out of current expenditure, i.e. from this year's tax take. The government borrowed to keep paying pensions (and everything else) during the financial crisis. That's why we have a debt equivalent to 100% of GNP. Anyone who doesn't find this scary in the face of an aging demographic hasn't thought about it very hard. The increases in pension age probably don't enter the thoughts of younger people, but they already amount to 20% of the average life expectancy in retirement. How much more of it will go is anybody's guess.


----------



## RETIRED2017

dub_nerd said:


> I think you are mistaken. There is no fund to pay State pensions out of. Your PRSI contributions get spent by the government as soon as they come in the door. There is no pot of money, no investments, and even the pension reserve fund that was put aside for a rainy day was spent during the GFC. All pensions are paid out of current expenditure, i.e. from this year's tax take. The government borrowed to keep paying pensions (and everything else) during the financial crisis. That's why we have a debt equivalent to 100% of GNP. Anyone who doesn't find this scary in the face of an aging demographic hasn't thought about it very hard. The increases in pension age probably don't enter the thoughts of younger people, but they already amount to 20% of the average life expectancy in retirement. How much more of it will go is anybody's guess.


Google Funding of the social Insurance 2005 , You will see why the lobby groups pushed to be inside the Prsi fund and the Government allowed them in before the up coming review,

Also Google  social insurance fund 377m in surplus says  Varadkar  you will see he said he was going to keep it in surplus so you know who will have to pay for all of the extra people who were added to pull out of it straight away,

You will also see that the announcement for 2017 was made on the 26 dec 2016 did you notice we now have 14/2 2018 and there has being no announcement for 2017 so the likes of dub_nerd of this world will not cop on the people added in are raiding the fund and are going to be backdated  out of the fund even though the have not paid in the required amoun


That is why I said on another post the government needs to put money into the fund to cover all the people they have added into the fund over the years who did not contribute to it,

People in there forties do not seam to care how the fund is getting used up  now This is there fund we are talking about,


----------



## LoveTrees

I could bet that the USD is ready to bounce back soon against the Eur from this chart:
https://www.xe.com/currencycharts/?from=USD&to=EUR&view=10Y

...Time to buy the cheap USD bluechip shares and benefit from the bounce back as well imho...


----------



## cremeegg

Details of the social insurance “fund” for recent years are available here. 

https://www.welfare.ie/en/Pages/Social-Insurance-Fund.aspx


----------



## RETIRED2017

cremeegg said:


> Details of the social insurance “fund” for recent years are available here.
> 
> https://www.welfare.ie/en/Pages/Social-Insurance-Fund.aspx



People who see 15% PRSI taken in payroll need to start questioning why they get the same pension as people who only a few only % in,

There is no breakdown in the above reports,


----------



## dub_nerd

RETIRED2017 said:


> Google Funding of the social Insurance 2005 , You will see why the lobby groups pushed to be inside the Prsi fund and the Government allowed them in before the up coming review, Also Google  social insurance fund 377m in surplus says  Varadkar  you will see he said he was going to keep it in surplus so you know who will have to pay for all of the extra people who were added to pull out of it straight away, You will also see that the announcement for 2017 was made on the 26 dec 2016 did you notice we now have 14/2 2018 and there has being no announcement for 2017 so the likes of dub_nerd of this world will not cop on the people added in are raiding the fund and are going to be backdated  out of the fund even though the have not paid in the required amoun



What on earth are you talking about. Have you any concept how much money goes through the social insurance fund? €377m is barely a fortnight's worth. Even in our good years the fund barely registered a surplus -- for eleven years out of its 65 year existence to be exact. Varadkar's surplus is the first one since 2007 and it's peanuts. Projections are that the fund will need a 50% government subvention by 2050, representing 5 or 6% of GDP. A few year's back it had a nearly €2 bn deficit _for one year_! I've no idea what you mean by "people are going to be backdated out of the fund" ... pension payments are an ongoing payment out of the fund's current account. Are you saying people are going to age 20 years in a week in order to get a big payout, like that hackneyed scene from a dozen horror movies? Sounds like conspiracy theory nonsense. 

Here's an extract from an actual review of the fund from 2015:

_The increasing State contribution to the funding of the SIF: In only 11 years of its
existence has the SIF produced a surplus of income over expenditure. The latest
actuarial review of the SIF has projected the Exchequer subvention will increase
steadily over time and will exceed 50% of the total SIF funding by 2050. The likelihood
that the Exchequer contribution will become a more significant part of the Fund
suggests that the employee and employer SIF contributions might be better aligned
with the Exchequer income. Issues of long-term reform, contribution rate levels etc.,
to address sustainability issues in social insurance funding are areas for separate
analysis _​


----------



## dub_nerd

RETIRED2017 said:


> People who see 15% PRSI taken in payroll need to start questioning why they get the same pension as people who only a few only % in



That's a different question to how things are funded. People getting a non-contributory pension are means tested. It's true you can get a substantial contributory pension -- two thirds of the max -- with only one third of the contributions (but not "only a few percent"). Below the minimum contributions you get nothing.


----------



## Gordon Gekko

How do they treat the fact that benefits are taxable?

i.e. they might pay out a €12k pension to someone only for them to pay €5k of it back to the State via tax.


----------



## RETIRED2017

dub_nerd said:


> What on earth are you talking about. Have you any concept how much money goes through the social insurance fund? €377m is barely a fortnight's worth. Even in our good years the fund barely registered a surplus -- for eleven years out of its 65 year existence to be exact. Varadkar's surplus is the first one since 2007 and it's peanuts. Projections are that the fund will need a 50% government subvention by 2050, representing 5 or 6% of GDP. A few year's back it had a nearly €2 bn deficit _for one year_! I've no idea what you mean by "people are going to be backdated out of the fund" ... pension payments are an ongoing payment out of the fund's current account. Are you saying people are going to age 20 years in a week in order to get a big payout, like that hackneyed scene from a dozen horror movies? Sounds like conspiracy theory nonsense.
> 
> Here's an extract from an actual review of the fund from 2015:
> 
> _The increasing State contribution to the funding of the SIF: In only 11 years of its
> existence has the SIF produced a surplus of income over expenditure. The latest
> actuarial review of the SIF has projected the Exchequer subvention will increase
> steadily over time and will exceed 50% of the total SIF funding by 2050. The likelihood
> that the Exchequer contribution will become a more significant part of the Fund
> suggests that the employee and employer SIF contributions might be better aligned
> with the Exchequer income. Issues of long-term reform, contribution rate levels etc.,
> to address sustainability issues in social insurance funding are areas for separate
> analysis _​


I know it went out over the top of your head ,

The Government have spent around the same amount of years talking about PRSI reform  as they have about draining the Shannon,

While they have being talking PAYE Tax payers see one sixth of payroll go to the prsi  Fund while others see very little of there earnings go to the PRSI Fund when they reach 66 they all  get the same pension,

Paye taxpayers will have paid in all of there working life others groups can get the same pension by paying in for 10 years,

Look at the Voluntary pay related social insurance contribution rates when you get a chance

Also look at the IFA WEBSITE social insurance contributions not picking on Farmers just there site will show you how little you need to pay in to get a full pension how can the fund build up when there are so many pulling out of it without paying the same amount in,

If every one had to pay in the same amount of there direct earnings there would be far less abuse of our social insurance system,


----------



## joe sod

RETIRED2017 said:


> People in there forties do not seam to care how the fund is getting used up now This is there fund we are talking about,



I think this is a very good point. I opened a thread in the pensions section about the unfairness of the state pension how some people are qualifying for a full pension today after paying very little in
https://www.askaboutmoney.com/threads/joan-burton-2012-pension-changes.206954/#post-1553480


----------



## RETIRED2017

joe sod said:


> I think this is a very good point. I opened a thread in the pensions section about the unfairness of the state pension how some people are qualifying for a full pension today after paying very little in
> https://www.askaboutmoney.com/threads/joan-burton-2012-pension-changes.206954/#post-1553480


It is possible for someone to get a full contributory in 2018 having paid in around 1000 euro over 10 years lots would be in a position to stop paying once they had enough to get full pension,

Some see one sixth of there payroll go to look after the lobby groups it is the biggest con job ever carried out in this Country ,

the reason the PRSI Fund is not in surplus for the people who pay in one sixth of there payroll all of there working life for the last forty years is simply because it is being robbed to Fund those who don't end of story

People who see one sixth of there payroll go into a PRSI Fund since the started working need to  stop sleepwalking into the next election without questioning where did my money i pay in PRSI Fund go and demand answers from the parties who have ripped them off FF/FG /Labour by the way SF will do the same to them,

Some party need to know there is votes to be got if they start looking after the people who see one sixth of there payroll go in PRSI and stop giving it to lobby groups,


----------



## RETIRED2017

dub_nerd said:


> I think you are mistaken. There is no fund to pay State pensions out of. Your PRSI contributions get spent by the government as soon as they come in the door. There is no pot of money, no investments, and even the pension reserve fund that was put aside for a rainy day was spent during the GFC. All pensions are paid out of current expenditure, i.e. from this year's tax take. The government borrowed to keep paying pensions (and everything else) during the financial crisis. That's why we have a debt equivalent to 100% of GNP. Anyone who doesn't find this scary in the face of an aging demographic hasn't thought about it very hard. The increases in pension age probably don't enter the thoughts of younger people, but they already amount to 20% of the average life expectancy in retirement. How much more of it will go is anybody's guess.


Rubbish, There are none so blind as those who will not see, most of the one sixth needs to be put aside is is not supposed to be used to buy votes,
The people who are using it at present to buy votes need to know they will pay a very heavy price at the next election,and the people who come after them will suffer the same fate if they do not change,

We need to send a strong message to who ever is in power that they people who see one sixth of there payroll go into a black hole called the PRSI Fund will not stand for it any more,


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## dub_nerd

RETIRED2017 said:


> Rubbish, There are none so blind as those who will not see, most of the one sixth needs to be put aside is is not supposed to be used to buy votes,


I can't see which bit of this you don't get. _None_ of the PRSI contributions have been "put aside" for _any_ purpose. Apart from a small minority of surplus years, all the money gets spent as fast, or faster, than it comes in.


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## RETIRED2017

dub_nerd said:


> I can't see which bit of this you don't get. _None_ of the PRSI contributions have been "put aside" for _any_ purpose. Apart from a small minority of surplus years, all the money gets spent as fast, or faster, than it comes in.


What I cannot get is why the dub_nerd of this world take it lying down and allowing this to happen people who see one sixth of there payroll going into the fund only to be taken by others need to start shouting stop while there is time to do something about it ,

No point in closing the door when the horse is gone,

30000 to 40000 more were added in the last few weeks who have not paid in enough PRSI for a full pension they are now going to get the full pension and next year they are going to get a lump sun for all on the years back to when they were 65 in 2019 out of the PRSI  fund because of lobbing by the IFA and others  this should not be coming out of the PRSI Fund it should be coming out of central funds,


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## cremeegg

RETIRED2017 said:


> What I cannot get is why the dub_nerd of this world take it lying down and allowing this to happen people who see one sixth of there payroll going into the fund only to be taken by others need to start shouting stop while there is time to do something about it ,
> 
> No point in closing the door when the horse is gone,
> 
> 30000 to 40000 more were added in the last few weeks who have not paid in enough PRSI for a full pension they are now going to get the full pension and next year they are going to get a lump sun for all on the years back to when they were 65 in 2019 out of the PRSI  fund because of lobbing by the IFA and others  this should not be coming out of the PRSI Fund it should be coming out of central funds,



Why dont you start a separate thread on this point. I would certainly be interested. 

This thread is about a stockmarket correction, the one before last  if I remember correctly.


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## RETIRED2017

cremeegg said:


> Why dont you start a separate thread on this point. I would certainly be interested.
> 
> This thread is about a stockmarket correction, the one before last  if I remember correctly.


my first post cremeegg  was no 378 if you check I think you will find I replied to post no 377 just for the record

I only set out to correct misinformation there are lots of retired people who have paid enough PRSIA1 for the benefits they are getting,

Some speak out of both sides of there mouth they are resentful of the people who  seen one sixth of there payroll go all of there working life to fund  the  benefits the are getting in retirement and want the Government to take some of it back , now read there post yourself to see what they are saying out of the other side of there mouth,

Do they really think if the took some  money off the people now retired it will be put aside for them  (google  Dog in the manger)

I am pushing for some to be put aside for them but they don't seam to want that ,


I understand where you are coming from no offence taken cremeegg

I suspect lf I opened a thread I would find the people paying lower PRSI and getting the same pension as someone seeing one sixth of there payroll go in prsi
will start muddeing the waters

Best regards Retired,


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## RETIRED2017

galway_blow_in said:


> most believe that those in receipt of the state pension more than covered ( what they are in receipt of now ) the cost in PRSI contributions down the years , the truth is very different , its the working young who are paying for the state pension today , that was sort of ok when you had four workers for every retiree but that wont be the case in a few decades
> 
> there isnt a scintilla of evidence that the government is attempting to curb the appetite of pensioners or those about to become pensioners , minister regina doherty is particularly voracious in her desire to heap goodies upon the elderly , she is of course constantly looking over her shoulder at willie o dea who these days appears to be spokesperson for pensioner largesse
> there has been a massive increase in spending on the elderly this past twenty years , it dwarfs the increases in the public sector pay bill percentage wise



First off A agree with cremeegg this is about Stock Market Correction
I  am just going to open an old tread and say hi ,


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## MrEarl

RETIRED2017 said:


> ....I suspect lf I opened a thread I would find the people paying lower PRSI and getting the same pension as someone seeing one sixth of there payroll go in prsi will start muddeing the waters ....



One of the many good reasons to start a thread then, let the different opinions battle it out


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## delfio

MrEarl said:


> One of the many good reasons to start a thread then, let the different opinions battle it out



Very good lads, roll it on, time to get the pop corn out


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## RETIRED2017

MrEarl said:


> One of the many good reasons to start a thread then, let the different opinions battle it out


If you look back on AAM you will see the people who are piggybacking the system and are well set up closing the debate down,

I suspect you are like me enjoying your retirement having worked and paid well for it,

The battle is lost by the look of things  most of the people who up to now would have backed and supported the people who paid very little  now have to pick up the tab ,

They are not happy there resentment of people who are retired is bubbling over which is the reason why I responded to a post around 376 pointing out  lots of people seen one sixth of there income go into the PRSI Fund so they have paid enough for there state contribuarty  pension ,

The resentment and frustration they feel is coming because the piggy bankers are enbedded in along with the people who seen ones sixth of there payroll go into the prsi Fund so when the Government gives five euro to the people who seen one sixth of there payroll go into the PRSI fund the also have to give the piggy backers the same amount ,

Guess who will be paying  the five euro for the piggy backers yes you guessed correctly there most ardent supporters will and it is showing,

Now go back and enjoy the pop corn I don't need to open a new post to bring them down to earth from time to time,


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## RETIRED2017

delfio said:


> Very good lads, roll it on, time to get the pop corn out


I am afraid the Pop corn is not going to taste so nice from now on it is the people who have wealth who are being tapped to keep the piggybackers in the style the are used of,



The spokeperson for Regina new crop of 30000 to 40000 piggybacker's want the tax break done away for private pensions so they can piggy back the syetem

The people who are retired like myself  will be popping the pop corn while we read about posters winging about the wrong people while there follow suppoter rips then off and the don't notice, very big Grin

I think you will be is the same boat as me in another year or two


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## galway_blow_in

RETIRED2017 said:


> I am afraid the Pop corn is not going to taste so nice from now on it is the people who have wealth who are being tapped to keep the piggybackers in the style the are used of,
> 
> 
> 
> The spokeperson for Regina new crop of 30000 to 40000 piggybacker's want the tax break done away for private pensions so they can piggy back the syetem
> 
> The people who are retired like myself  will be popping the pop corn while we read posters winging about the wrong people while there follow suppoter rips then off and the don't notice, very big Grin
> 
> I think you will be is the same boat as me in another year or two




Its the retired who saw no recession and had there benefits safeguarded


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## RETIRED2017

galway_blow_in said:


> Its the retired who saw no recession and had there benefits safeguarded



People Who seen one sixth of there payroll go all of  there working life paid up front for there pension,


I will Type slowly this time lots of people  seen one sixth of there payroll go into the PRSI Fund trough many a recession lots of other paid less in good times and bad times and as I said on another post you now have to pay more to carry the piggy backers enjoy,

Hate to see resentment and  frustration building up not good what goes round comes round


News FlashRegina is just after adding in another truck load of piggy bankers and there spoke person wants  the tax break taken away  from the people who will be paying the tab ,

they Government will always have to look after the people who seen one sixth of there payroll go  into the Prsi Fund for there retirement they will only be getting back what the payed in. the embeded piggy bankers have to get the same amount good to see there supporters will pick up the tab

The piggy backers supporters are going to pay for the piggy backers seem fair to me,

there is no free lunch someone is going to pay the tab you cant ask the people who have already paid to pick up the tab  again so you know who will be paying enjoy the meal,

You think things are bad now I don't think you Realise the amount of piggy backers making there way trough the system loads will be added each year and the Government will have to take more tax from earned income but more so from unearned Income seeing that is what you want that is what you will get Cheers,


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## Gordon Gekko

RETIRED2017 said:


> I will Type it slowly this time lots of people  seen one sixth of there payroll go into the PRSI Fund trough many a recession lots of other paid less in good times and bad times and as I said on another post you now have to pay more to carry the piggy backers enjoy,



That’s you typing slowly?


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## Sarenco

For those who enjoy watching short-term market movements, it might be worth noting that global stocks just had their best week in six years -

https://www.reuters.com/article/glo...t-week-in-6-years-dollar-climbs-idUSL8N1Q64X5


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## joe sod

Sarenco said:


> For those who enjoy watching short-term market movements, it might be worth noting that global stocks just had their best week in six years -
> 
> https://www.reuters.com/article/glo...t-week-in-6-years-dollar-climbs-idUSL8N1Q64X5



the markets still jittery, if you are investing in out of favour sectors (like UK utilities now) they can stay out of favour for much longer than is rational then suddenly reverse course . I think many amateur investors can get caught out by this, sometimes you just have to hold your nose. I think computer algorithms exagerrating this phenomenon now aswell, if something is in a downtrend then it stays in a downtrend much longer due to computer trading until suddenly it doesn't.


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## galway_blow_in

european market is now below where it was twelve months ago , pretty poor considering the euro has pulled back quite a bit against the dollar since the start of the year


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