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

[Fella]

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

 

[Joey101]

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

 

[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.

 

[galway_blow_in]

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

 

[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.

 

[galway_blow_in]

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

 

[joe sod]

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.

 

[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

 

[galway_blow_in]

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

 

[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.

 

[landlord]

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.

 

[joe sod]

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.

 

[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.

 

[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.

 

[galway_blow_in]

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.

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 ?

 

[landlord]

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!!!

 

[galway_blow_in]

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

 

[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.

 

[galway_blow_in]

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

 

[joe sod]

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