Stock Market Crash?

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gearoidmm

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Any comments on the volatility in the stock markets over the past 2 weeks. The ISEQ index is down 190 points today already putting its losses for the last week at nearly 10%.

Equally, the FTSE, DAX and CAC are all down around 60 points. The HANG SENG index lost 500 points overnight - all this despite the brief rally on Friday and spread betters predicting a 40 point rise in London this morning.

Emerging markets geting hit the worst - Saudi market is down 50% in the past 4 months and the indian market lost 10% overnight and suspended trading (although it made up some of those losses later).

Can't understand the extent of the losses. profits are good and GDP growth is improving everywhere. Interest rates are on the rise but valuations and p/e ratios aren't as bad as they have been in the past. This is looking like another Black Monday (in the style of 1987).

Carnage

Any comments (reassurance would be helpful)?
 
exactly..profit taking....no crash whatsoever....in fact its looking like a great opportunity to think about buying!
 
I don't think it's a particularly good time to buy. The current debate about the US market seems to be whether this is merely a correction that may see the market slip by up to 20% from its peak, or whether it's the start of a bear market that could see it drop by even more.
 
Indian and mid east equities have been over valued recently, large gains over the last year could be a readjustment on these exchanges. Current volatility over possible rate increases in both US and Euro. JPY also increasing rates. Lot of things in the mix there!
 
What about some of us with our equity ssia ready for collection 1st June and €1000 drop in value last week - is there anything we should do at this late stage?
 
norma said:
What about some of us with our equity ssia ready for collection 1st June and €1000 drop in value last week - is there anything we should do at this late stage?
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With an SSIA due in less than two weeks, I'd transfer it to a cash fund if that's available from your provider. No point risking further losses when the likelihood is that you won't see a big enough upward swing in two weeks to regain your €1000.

Mines not due until November and I'm not sure what to do about it, to be honest.
 
My Quinn Life Euro-Freeway SSIA is not up until next February but I've switched entirely to the Bond Freeway today. I rode out the fall in the equity markets in 2002/early 2003 and its been a good run for the past 3 years but with 9 months to go it's just too close to the end to risk any further losses.
 
It should be pointed out that there is no obligation to cash in your SSIA on maturity. Most institutions will simply roll your investment over into a new 'holding' product until you decide to encash or re-invest elsewhere.

The point being that the losses of the last week are only on paper at the moment and only materialise if you encash your policy.

Of course if you need to access the funds on maturity then you do have a defined deadline so it may be prudent to move over to a more secure fund mix or into a cash fund completely.
 
Let the shakeout continue for the next while. But it should be an opportunity to get back into latin america and asia. As for the ISEQ or FTSE Id stay away from.
 
gearoidmm said:
Can't understand the extent of the losses. profits are good and GDP growth is improving everywhere. Interest rates are on the rise but valuations and p/e ratios aren't as bad as they have been in the past. This is looking like another Black Monday (in the style of 1987).

Carnage

Any comments (reassurance would be helpful)?
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Valuations, GDP growth etc. are irrelevant in the short run - greed and fear are what count. Remember the euphoria of 1999 - early 2000 , Baltimore technology went to 135 quid - what fundamentals could justify that - an ice cream van would have bigger turnover ! If you are investing in stocks it should be for the long term imo. Short term blips will have little impact on the long term picture . Look at this or this as an example of what I am saying.
 
i am getting my cash ready....this is going to be an excellent buying opportunity.....
 
demoivre said:
Valuations, GDP growth etc. are irrelevant in the short run - greed and fear are what count. Remember the euphoria of 1999 - early 2000 , Baltimore technology went to 135 quid - what fundamentals could justify that - an ice cream van would have bigger turnover ! If you are investing in stocks it should be for the long term imo. Short term blips will have little impact on the long term picture . Look at this or this as an example of what I am saying.
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The Dow consists of 30 companies also consisted of 30 in Jan 1930. How many of the companies from Jan 1930 are still included in the Dow? I count 2 GE and GM. How many of that original 30 have gone out of business? What would be the best way of growing your portfolio over this period if not buy and hold?
 
i agree..invest in decent companies that are doing well at the time..when the companies no longer offer you what you want..sell....
 
I would say stay invested in the market pretty much all the time as if you attempt to time your transfers into cash you will miss potentially big moves. I find that once the stock market losses go from the business pages to the front pages it is always a good time to divert more funds if available into the market and is deifinitely not the time to sell. Would be an interesting academic study!
 
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