advice please , fund values have dropped alot

M

magsrosebh

Guest
hi, wondering if anyone can advise, invested 50k in eagle star matrix funds late 2007 , balanced pension and inves 50%, dynamic pension and invest 20% and eurozone equity 30% . Current fund value 30k! . Could we lose all this money? Dont know what to do , Cant believe its dropped so much.
 
I've invested a total of €45,000 in quinn life euro freeway. It's now worth about €22,000, I've lost just over 50%. Could your money drop any further? Yes it could. That's the risk you have to take.
 
it could drop way further. no way of knowing. the odds are that this year funds will continue dropping . no one knows when they will bottom, people that say they know are lying to you.
 
Anyone investing in funds should take a medium to long-term view. Equity markets move in cycles. If you lose your nerve when the cycle is on a downward run, you're realising your loss and will never see any recovery.

To put it another way, you were unfortunate in that you bought in with hindsight near the top of the market. Selling at or near the bottom is just compounding this.

Can markets and values drop lower? Yes.
Do I know when a recovery will occur? No.
Do I believe that a recovery will occur? Yes.

I'm a broker. My own pension fund has been similarly hammered and I'm not remotely bothered as I have a diversified portfolio of investments and I'm happy that in years to come I'll have a decent return.
 
Ordinarily I would agree with you 100%.......however if this is the Great Depression II realising a loss now or switching over to bonds may actually be the right thing to do. And if investing for retirment, remember it took 30+ years for market to recover after the 1929 crash.
 
I have been trying to decide if I should continue paying into Eagle Star Matrix Fund for my kids future education, as I have lost half the value of my contributions since I started in 2007.
 
I was thinking of swicthing my investment into QL's China freeway??? Any suggestions, thoughts welcomed.
 
Calico said:
Didn't WWII aid recovery?
Click to expand...

Hope you aren't advocating a solution :eek:
WWII was, at least partially, an outcome of the Wall Street crash of 1929 (loans recalled, German economy hammered by that on top of reparations from WWI, other contributing factors but it certainly was a significant one). I'd hardly say it aided recovery though. The US recovery was well underway by the time they got involved in the war, the European recovery was hampered by it, although it could certainly be argued that the construction industry was bound to have something of a boom once peace broke out!

OP I think you will find that everyone is in the same boat on this one. I haven't met anyone that has a different story to tell - from my perspective I keep gritting my teeth and reminding myself that I don't actually need it now or in the next ten to twenty years so it is worth riding out the current malaise. Doesn't make me feel any better when I peek under the covers though!
 
Calico said:
remember it took 30+ years for market to recover after the 1929 crash.
Click to expand...
I'm sure you've heard the quotes about 'past performance not indicative of future performance'.

However, if you're going by the Great Depression, and specifying a 30+ year recovery timespan when advising people on whether to pull out of the stockmarket now, you should also consider the fact that the 25 year recovery from 1932's bottom was from trough to peak. We've already dropped 50%+ from the peak here.

The DOW fell from a peak of 381 on September 3, 1929 to 41 on July 8, 1932 - a fall of 89.2%. If this crash were a mirror image of the last one, the DOW would have to fall to 1530 - 77% below todays value. It didn't return to 381 until Nov. 23, 1954 - 25 years after the peak was first set.

This means that, if the DOW were to mirror the 1929 - 1932 declines, we'll have a 14279 (October 9, 2007) DOW by 2032 - but would hit 1542 before that - a drop of 77% from current levels. Regardless of the potential drop of 77%, the possible 14279 DOW in 2032 reflects a 3.2% annual rise. Add to this the current dividend yield of 4.46% and you get a return of 7.66% per year - although dividends may be reduced.


However, the above can only be taken with a pinch of salt as the only thing it tells us is:
  • Don't listen to anyone that says it CANNOT drop much further. If history were to repeat itself, we'd have a 77% drop from current levels;
  • Regardless of how low it goes, history tells us that things will eventually recover.
My plan is to continue buying as much as I can every month and 'Dollar Cost Average' in. I don't want to wait for the upturn because, if history is anything to go by, the major part of the upturn will happen very quickly and I don't want to miss it. Also, I think there'll be a much quicker turnaround this time with all the money that's being pumped into the world economy.
 
Good post......and you're absolutely right. The point I was trying to make is that if you're 50-55 and investing for retirement you could be 80 (or dead) by the time your fund recover to previous highs IF this is the Great Depression II.
 
UptheDeise said:
I was thinking of swicthing my investment into QL's China freeway??? Any suggestions, thoughts welcomed.
Click to expand...
No one can provide advice on this if they do not know what are your other investments; your investment horizon; and your risk profile.
If you have all your investment in fund X and now want to switch it to fund Y, your investment strategy is just betting on the momentum of one fund. So you might wish to question is this a good strategy to realize your investment goals.

(Also, if you do switch, you would want to have some reason to believe that China will outperform your existing fund (and other alternative funds into which you can switch at this time) in the future).
 
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