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


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
 
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.
 
Brendan Burgess said:
So which is fairly priced and which might be a bubble?

Brendan
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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
 

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

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?
 
Gordon Gekko said:
So people with no understanding of markets or investments fancy their chances of chopping in and out of the market? Madness.
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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
 
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 ).
 
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.
 
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.
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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
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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 !
 

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 .
 
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
 

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
 
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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,
 
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Fella said:
I want to have my money now
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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.
 

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 .
 
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