"My shares have fallen 30% what should I do?" "Is this a good time to invest in the stock market?"

D'ont know why I bother but anyone who is interested please refer to my posts in recent threads Longest Bull Market in History and Time To Buy In. I will post one final post now on stock markets. On those threads I posted Nourini's prediction which has for the most part already come through. Heads up to you all now. I am advising to come out of the market/pensions tomorrow (despite losses aleeady incurred) especially those people within 5 years of retirement and get into cash for the foreseeable future. Unless a vaccine is found for this virus in the next several weeks the stock markets are going down way further. USA especially and UK are going to go the same way I'm sorry to say as Italy has done and when that pending reality dawn's on the markets there's only one way it's going and an economic crash/recession is coming and the market crash of 2008/2009 will look like a picnic in comparison to what has already happened the markets. Now some of you will say stay the distance and that's grand for folk in their 40's and younger with time on their side. Good luck to all of you who decide to ride it out.
 
Well Daddy, I think much of your post has merit. Markets are in free fall, every asset class in under attack and the dash for cash has hastened. You suggest the Coronavirus is going to cripple America with devastating consequences. And I think you’re right.

All of that said, and having ridden through 87, 9/11, 2008 and 2918, staying invested proved very good for long-term investors. The pace of acceleration exceeded the rate of decline and in several cases, the markets reached all time highs.

This is different and that requires additional pause for thought. A recession is imminent, job losses immediate and deep and structural changes may not see some companies survive.

With the recent market retreat, long term investors are down 30% give it take, with further volatility almost certain. But the 30% loss in value is offset by the considerable gains achieved during the long bull run.

Personally speaking, I like all of the companies in my portfolio bar one. So it’s now a question of sticking to my guns because of strong performance and my knowledge of these companies. That could change in which case I will adjust.

I think you are right to sound the warning. We’ve never experienced such a catastrophe envelop our world so learnings from the past may not prove fruitful in this market.

I will stick to the knitting and I might even keep the dog, until and unless this market heads for meltdown.
 

This post is a disgrace. Possibly the worst contribution and most reckless advice that I’ve ever seen on AAM. A combination of ‘Monday Morning Quarterbacking’ at its very worst and complete ignorance of how investment markets and investors behave. Please ignore it.
 
I should take this opportunity to acknowledge Gordon's penultimate post - short priced favourite for creative post of the year.
 

If people “knew”, then equity-type returns wouldn’t be available because they’d be guaranteed and everyone would invest in equities! One can only look at previous shocks and events and lean on the crutch that is one’s time-horizon.

Where will markets be next week? I haven’t a clue.

Where will markets be next month? I haven’t a clue.

Where will markets be in 10 years’ time? I would bet my house that they’ll be higher than they are now.
 
This time it's different.

And I am not trying to sell you anything.

I do think that the world will recover and widespread prosperity will return, however the current pandemic will reshape industries, the looming recession will set the world back, and it will not recover to the pre covid economy, but to an economy that will look very different.

There will also be huge political implications of this pandemic, which will in turn have economic effects. If China comes out of this as the country who was most effective in combatting Covid-19, which may well happen, that will have huge economic implications and even bigger political implications.

It may well be that half the companies in a well diversified portfolio go bust. That means that when "markets" regain their highs in x years time, todays investors will not be at the party.
 

I agree with you 100% except for the last bit , I wouldn't be betting my house on it been higher in 10 years. It's interesting to look at how long some recoveries took , can't link the graph I was looking at but recovery times.

1905 19 years to recover
1929 25 years
1973 16 years
2000 6 years
2007 6 years

I will still be investing every few months , but from reading posts online I think a lot of people are hoping that they can invest now wait a year and expect a big return . I think the damage from this virus to the world economy could be lasting , I would not be suprised if we are lower in 10 years than we are now . It seems to be there is little more intervention the governments can do to prop up the market , it's certainly going to be interesting times ahead .
 
Gordon Gekko said:
To recover from now, not from the highs!

You seem to be citing the time periods to get from the previous peak back to those levels.
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From the graph i was looking at to recover from the price it dropped from , so yeah to reach the high it was at a month ago .
Sure as you know yourself its all speculation , it could be back there in a week or it could take 20 years. But thats why we have stock market returns , the returns are from the unknown.
My opinion doesn't mean much , but i wouldn't be suprised if we are waiting a considerable while to see new stockmarket all time highs.
 
When the Spanish flu pandemic hit in 1917, the DOW fell by 33% over a couple of months. It fully recovered within a year.

It is estimated that the Spanish flu infected 500 million people worldwide, or about 27% of the world’s population and killed between 30 million and 50 million people.

I'm not suggesting that the markets will necessarily follow that pattern on this occasion but I think it's interesting nevertheless.
 
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so from 1905 to 2013 which is just over a century , 72 years out of that century was the stock markets just recovering from previous highs if you add up all the periods of recovery you have posted, and that is not including the quicker sell offs. Therefore the only periods free from long recoveries from previous highs were the 1950s and 60s along with the 1990s. So an interesting observation from the above post is that you are going to be spending alot of your investment horizon as an investor just recovering previous valuations of your portfolio.
 
Personally, the money I have on the sidelines, awaiting investment, is going to remain on the sidelines for the time being. There are three reasons for this.

Firstly, I think markets are more likely to fall further than to rise in the short term. Admittedly, I am less sure of this than I was a few weeks ago.

Secondly, if I am wrong about the markets, it means that the virus has taken a relatively benign trajectory which will please me greatly.

Thirdly, if things go really bad, I would have put at risk money that I might need to make money that, in normal times, I really don't need.
 
After this sell off the msci world index ETF is now back where it was in january 2016 and 2013, but even worse the Vanguard ex US ETF (world markets excluding US) is now trading where it was in 2012 and 2010. So we have had a 35% sell off and this has wiped out a decade of gains (if you were to sell now). Therefore it might have been the longest bull market in history but it definitely didn't take much of a sell off to wipe out those gains, the 1990s it was not.
 
joe sod said:
Therefore it might have been the longest bull market in history
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There is no might about it!

The 11 years to 12 March 2020 represented the longest bull market in the history of the S&P500.

That's a fact - not an opinion.

The 1990s bull market lasted around 9.5 years.

Why you are continuing to query a simple fact is beyond me. It's really irritating at this stage.
 

I don't doubt that at some point in the future the market will be significantly higher than it is now. Higher than its high point earlier this year.

However I do doubt that much of that rebound will be available to todays investors.

Lots of well known businesses will never recover. They will be replaced by new businesses, but the investors in todays businesses will lose in the process.

The index of 2030 will not be the index of 2020.

No doubt The Gordon Gekkos of 2050 will be able to look back and say "it took x years for markets to recover". However that doesn't mean that the investors of 2020 ever recovered.

The market will be higher in 2030 is like saying someone will win the championship in 2030, but the Coronavirus will lay low lots of todays companies, lots of companies unknown possible unfounded today will lead the indices of 2030, being fully invested today does not get you exposure to their rise.
 
cremeegg said:
The index of 2030 will not be the index of 2020.
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The securities that make up any index are constantly changing.

You could equally say the MSCI World index of 2020 is not the MSCI World index of 2010.

It would be equally meaningless to any index investor.
 
Sarenco said:
The securities that make up any index are constantly changing.

You could equally say the MSCI World index of 2020 is not the MSCI World index of 2010.

It would be equally meaningless to any index investor.
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You are correct in detail and but absolutely wrong in the important aspect.

The constituent shares of an index are constantly changing, shares are demoted and promoted, if I can put it like that.

The cost to the investor is the trading cost and the price difference between the share going down and the share coming up.

When that is a small number of shares with little difference between them the cost is not huge.

That is not what we are looking at now.

In my opinion large numbers of business will become worthless, and investors will lose out. Of course they will be replaced by new better companies but their shares will not be free.

Simplified example

What used to happen. Share XYZ falls out of the index, the share is sold for €100. Share ABC replaces it in the index, the €100 is used to buy ABC shares. Cost to investor just the trading cost.

What happens now. Airline UAD was worth €100 in Jan, is worth €50 now, falls out of the index. Amazon was worth €100 in Jan is worth €105 today. (depending on exact date Amazon has risen 5% since Jan). Investor buys €50 worth of Amazon shares. Loss locked in.
 
This is in no way me calling the bottom; markets could fall from here. However, yesterday was classic in the context of markets. Volatility ramps up, markets fall and some people panic. They exit and turn temporary losses into permanent ones. But the market’s best days often come straight after their worst days; the problem is that the scaredy cats miss out on them. Yesterday was the Dow’s best day since 1933 and the S&P’s 10th best day since 1927. But where are all the sensationalist headline about “billions being wiped back onto markets”?
 

I saw that yesterday alright, markets getting excited over the $2 trillion package being agreed by the Senate. Trump wants everything open again by Easter. Our schools are staying closed until the end of April!! While I firmly believe the US will come out of this quicker, there is a massive gamble going on by the US government with people's health over the economy.

The US are still a few weeks behind Europe regarding this outbreak and NYC is being hit very hard. There is a very good chance that there's bounce and back down again. Then when the unemployment figures come out and Q2 earnings figures are announced, markets will probably tumble again. Impossible to predict. Stay in quality and rid it out. Make sure you have enough cash too.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Steven, one would have to read it that way. This is not like 2007/2008 which was essentially a malaise in the financial system and therefore amenable to financial panaceas'
The Fed are going all in here, in the parlance of Texas Hold'em. Is the river card the Ace of Hearts allowing The Donald to open his hotels and golf courses for Easter or are we in for the mother and father of busted flushes?
Throwing 5,000 dollars per man woman and child at the economy is fine if they are able to spend it, but it is useless if economic activity has come to a standstill.
Someone earlier recommended that if you were approaching retirement you should cash in. I don't think he was making predictions, he was simply asking should they run the current risks which I think everyone posting here admits are probably unprecedented.
 
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