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

That is anything but a simple question.

The best time to realise one's gains is after you have died, as the liability to CGT evaporates.

Other than that, it's probably when you need the money.

I have sold in the past, to rebalance my portfolio after a very good run by one stock makes it too high a weighting in my portfolio.

We are in very strange times at the moment. I was fully invested in equities and while I can't time the market, I think that the risk is very high at the moment, so I took some of my money off the table.

Brendan
 
confused12 said:
This implies that anyone can perfectly time the bottom, which is impossible
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It was also my understanding that this involved buying at the bottom, which of course is impossible.

I think the point was that EVEN if you had foreknowledge and could buy at the bottom the advantage over the regular buying strategy would be minimal.
 
cremeegg said:
It was also my understanding that this involved buying at the bottom
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No, the hypothetical just required a pause in buying (not selling) equities each time the market turned south.

It's a daft article, IMO. If you had the suggested foresight, why wouldn't you run a leveraged long/short strategy and make an absolute fortune?
 
Just revisiting this thread because it is a great insight into the thought processes of investors as a big market sell off is happening. First we saw the recovery and acceleration of the technology bull market which has been in place since financial crash, these stocks accelerated past their pre market crash levels to extraordinary new highs. This was explained by the financial guys as "the acceleration of the trend already in place".
Now with the good news of the vaccines and the prospects of the economy opening up properly, most of the really depressed stocks like banking and oil stocks had a huge recovery and some of the big tech stocks actually sold off. The financial guys called this "the great rotation", money moving back into these very depressed stocks .

These financial guys never predict anything but love coming up with fancy jargon to describe what's just happened trying to give the impression that they knew all along, charlatans. They never admit mistakes
 
Just revisiting this thread because it is a great insight into the thought processes of investors as a big market sell off is happening.
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You're confusing investors with traders and speculators. I spent 30 years in the industry and in my experience most investors don't pay much attention to what is going on a daily basis. They'll check their situation may be once a year or so, maybe make a few changes and that's about it.
 
joe sod said:
These financial guys never predict anything but love coming up with fancy jargon to describe what's just happened trying to give the impression that they knew all along, charlatans. They never admit mistakes
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Very true. I think it is agreed that nobody can time the market, but with a little research you may be able to time a trend?

That is, as a small independent investor, I pick sectors that I believe will have favourable market conditions over the foreseeable to long-term future.
There are of course an innumerable amount of factors that can derail any analysis and turn it on its head at any given moment. So I tend to keep things simple.
One such sector, or rather a niche in the IT secto, that I consider will have favourable market conditions is in remote access and support. Vaccine or no, my instinct is that there will be/is already a greater impetus to remote working on a much, much more grander scale than we already have. Companies that specialise in this type of work will benefit.
So regardless of what is happening in markets today, if you believe a sector will have favourable market conditions, then some research on companies that operate in that sector is your best option over the long term, in my opinion.
 
With respect, you seem to have no idea how markets work.

The idea that someone sitting at their kitchen table here in Ireland can think “hmm, I think remote working will do well” and get a jump on the market is laughable. It’s already in the price

The vast vast vast majority of people who manage their own investments will do badly.

They will sell in months like March 2020 and buy at times like 2007.

There are stats to back all of that up; I have seen Fidelity stuff, for example, where the average self-managed investor in the US makes about 2% per annum versus 6% for a normal 60/40 portfolio.

ETFs and cheap funds are great, but not if you’re chopping in and out. An adviser adds most value when hand-holding and getting someone to stick to their plan.
 
Gordon Gekko said:
The vast vast vast majority of people who manage their own investments will do badly.

They will sell in months like March 2020 and buy at times like 2007.
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If I was trying to trade the markets I would agree with you. But I'm not, I buy and hold for the long term. I'm doing far better on my own than listening to the advice of experts who cost me dearly in the past - (do you remember when bank stocks were a practical safe haven and reliable stock in any portfolio?).
I don't pay much store to the 99% guff regurgitated daily on business news feeds. Its all filler.
It's easier to analyse a companys accounts and analyst projections and, relative to what is occuring in our daily lives, make a reasonable judgement on the future prospects for any particular company.
It's not rocket science, as much or as little information is available to whoever wants it.

Much more fulfilling doing this by myself and if it all goes pear-shaped I only have myself to blame. :)
 
WolfeTone said:
It's easier to analyse a companys accounts and analyst projections and, relative to what is occuring in our daily lives, make a reasonable judgement on the future prospects for any particular company.
It's not rocket science, as much or as little information is available to whoever wants it.
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It's easier to just buy passive index or two!

Have you read some books like random walk down wall street? Selecting a few companies, you are more likely to have more extreme returns than the market. Might be better might be worse. Google might be usurped. Msft could be discovered to be full of spies and backdoors. Amazon might be made illegal. Any safe bet today can look dangerous in hindsight.

What did your analysts say about banks back in the day?

Aside: please have a look at us estate taxes if you are holding american companies directly.
 
SPC100 said:
It's easier to just buy passive index or two!
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Yes, but why hand to others what you can do yourself, and without a fee?

SPC100 said:
Selecting a few companies, you are more likely to have more extreme returns than the market. Might be better might be worse. Google might be usurped. Msft could be discovered to be full of spies and backdoors. Amazon might be made illegal. Any safe bet today can look dangerous in hindsight.
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Or i could get hit by a bus?

I have small investments in a number of companies across a range of sectors, expanding my interests when I think it is appropriate and in the company that I choose.
I merely mentioned remote IT access and supports as a niche part of IT sector that I think will grow significantly over the coming years. As it happens, I bought stock in a European company that specialises in this area. Its revenues have been increasing steadily over the last four years, its debt has reduced significantly, it has offices in America, Europe and Asia.
It employees over a thousand people and in tune with my own view, a number of analysts recommend it as a buy.
That, and other information available on its website, suggest to me it is a well managed company and combined with my own view that this is an area ripe for growth, has persuaded to invest a sum of funds in this company.
 
I suppose things get oversold and if you are ready with your cash sitting in your broker account you can snap up a bargain. Companies like the cruise lines, air lines, plane manufacturers have all jumped up since March.
Pharma. Etc. There are opportunities even for the little guy.
 
moneymakeover said:
Companies like the cruise lines, air lines, plane manufacturers have all jumped up since March.
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True, but I would not interest myself in these sectors. I'm not saying that they should be avoided but they would not interest me. And that is the difference between handing over your income to someone else to invest your money for you. Investing in areas that you have no control over, as opposed to doing it yourself and building a portfolio that reflects your own outlook and understanding of investment opportunities.
 
So why do people who “do it themselves” do far worse than people who have their money managed?
 
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NiallSparky said:
What sort of broker are you using that costs no fees? And why do they not let you buy a passive ETF with the same lack of fees?
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I manage my own funds, paying commission on purchase. I don't pay anyone to manage it for me.

Gordon Gekko said:
So why do people who “do it themseves” do far worse than people who have their money managed?
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Probably because of what you said they do... buy in March and then sell on the drop. I don't do that. If I think a particular sector has favourable conditions then I look for companies that have track record of operating in the sector and by their own published documents they appears to be well managed and good financial health then I consider buying into it.
Like I said its not rocket science, so what am I missing here?
 
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