Time to buy in

My meaningless two cents (as a doctor, FWIW):

1. The virus will have a huge impact on the United States due to the inability to sufficiently test and the late closing of their borders. The US cannot exert the autocratic measures that China instigated, such as mass quarantine. A vaccine is a year away at the very earliest.
2. Economic fallout will be longer-lasting than the period of virus rampancy itself.
3. The virus is just taking a foothold in Africa and south and central america. This stepwise global transmission pattern spells bad news for supply chains and airlines etc.
4. We haven't seen the bottom yet. My guess is SPY 2000. .
5. It will blow over. But we might see November or later before we see a bull market again.

Guys it's very important to understand that complex markets are very difficult to forecast.

I could put up a case for selling out now and an equally compelling case for buying now.

The stock market usually picks up well in advance of the problem which caused the crash being resolved.

So it will not go like this
Day 1 WHO announces pandemic is over and Covid 19 under control
Day 2 Stockmarket begins a gradual recovery giving people time to buy back in at leisure

It will be
Day 1 - x : Sudden big gains in stock market
Media talk about dead cat bounce
Day 1 WHO announces pandemic is over

Brendan

I agree Brendan, but it's fun to speculate.

Hi settlement

It may well be fun. But the confident way in which many posters are setting out the future is very dangerous as it may cause people to make decisions which will cost them a lot.

Brendan

Brendan Burgess said:

The stock market usually picks up well in advance of the problem which caused the crash being resolved.

Click to expand...

Hi Brendan,

I believe in that the markets are reasonably efficient. I also believe that it is very difficult to time the market. In the case of Covid 19, the market did not exhibit great foresight. In late January/early February, medics were talking about how this could get really nasty - there was a definite window between there being a clear appreciation of the risk and market reaction.

WhiteCoat said:

there was a definite window between there being a clear appreciation of the risk and market reaction.

Click to expand...

I don't agree.

There is always uncertainty.

Of course the markets read the medical reports. But did they know that Trump would ban all travel to America? Did they know that Italy would become the epicentre?

There is a fantastic opportunity now, today. Unfortunately, I don't know whether that is an opportunity to buy or to sell.

I will know in three months' time.

Brendan

Brendan Burgess said:

I will know in three months' time.

Click to expand...

I think you will know more in three months time.

We can't be definite on the future, but we can be on the past.

It is certainly a better time to buy now than it was last month.

For accumulators, Keep up whatever regular buying you had, and if you have some funds on the side, consider investing some of them.

I mainly auto-invest monthly via a pension contribution (set at the maximum allowable), I am considering changing my contributions to get all my annual contribution invested over the next few months, rather that evenly over the rest of the year. I am also considering moving some surplus cash in.

Brendan Burgess said:

Guys it's very important to understand that complex markets are very difficult to forecast.

I could put up a case for selling out now and an equally compelling case for buying now.

The stock market usually picks up well in advance of the problem which caused the crash being resolved.

So it will not go like this
Day 1 WHO announces pandemic is over and Covid 19 under control
Day 2 Stockmarket begins a gradual recovery giving people time to buy back in at leisure

It will be
Day 1 - x : Sudden big gains in stock market
Media talk about dead cat bounce
Day 1 WHO announces pandemic is over

Brendan

Click to expand...

I think there's a case for dollar cost averaging in times like this , if you have a lump sum split it up and invest it in 10 parts over the next year or so , I personally don't think selling is a great idea if your already invested . I also wouldn't invest in the hope of making a few quid waiting for a quick turnaround.
Although there's no harm doing it and I know people will be looking at who can create the next vaccine or whatever and try make a huge gain by guessing the right company , if it's fun and it's money you can afford to lose then go for it.

I have just tweaked my pension contribution to get more of it into the market sooner.

There are 10 monthly contributions left in the year. I have increased my monthly AVC amouny 2.5 times, to get my remaining annual AVC invested over the next 4 months. (and then in 4 months, I will set AVC at 0, to avoid breaching max annual limit). I want to keep my employer match every month, so I haven't changed that part.

I guess this is somewhat market timing, but it is also maximising time in market.

If it turns out that the market is still falling in 4 months, I will endeavour to put more in.

For what it’s worth, my view on the most likely outcome is this...you put €25k into your pension fund in 2015 and invest it 100% in global equities. In 2035 you see what it’s worth and, surprise surprise, it’s worth around €100k. Your average annual return has been 7% which doubles your money every 10 years. Not wildly out of tune with the long-term average return from global equities. But over that period, Covid 19 has appeared, probably the odd war, a couple of recessions, and maybe another health or climate related crisis. Trying to time the markets is foolish. Just have a plan which is in line with your time-horizon and stick to it. “Time in the market, not timing the market”

All discussion of whether to invest or sell shares now will be in the following thread