Share this page:
Stay connected:
Welcome to the Citywire Money Forums, where members share investment ideas and discuss everything to do with their money.

You'll need to log in or set up an account to start new discussions or reply to existing ones. See you inside!

Notification

Icon
Error

wrong timing in the market
Freefall Junkie
Posted: 06 February 2018 10:33:20(UTC)
#16

Joined: 09/06/2014(UTC)
Posts: 42

Thanks: 24 times
Was thanked: 98 time(s) in 29 post(s)
King Lodos;56581 wrote:


If Japan's anything to go by, the QE experiment could run for decades to come .. I don't think it's an option: stopping.

But I also don't think there's *much* to worry about when you factor in automation and AI, because it's unimaginable that they aren't leading to faster productivity growth .. And more efficient markets that are better at allocating capital




Agree on automation and AI. The medium to long term the effects are going to be profound and I don't think are widely understood yet by the majority of investors. Still wouldn't like to call what is going to happen in the markets over the next few months though. What the hell, I'll have a go! 60/40 with 60 in favour of a strong bounce back with most losses recovered by April; 40 for an inflation fuelled bear market with stocks ending the year a further 15 to 20% down on today's levels.

Do I feel brave enough to pile cache into the markets right now in the hope of the 60% outcome? Eh, no! And I jump out of planes in my spare time :-)
1 user thanked Freefall Junkie for this post.
Mariel Anne Gonzales on 07/02/2018(UTC)
David Trigg
Posted: 06 February 2018 16:20:27(UTC)
#22

Joined: 20/03/2010(UTC)
Posts: 72

Thanks: 64 times
Was thanked: 31 time(s) in 21 post(s)
King Lodos makes here and also usually very valid points.
1 user thanked David Trigg for this post.
King Lodos on 06/02/2018(UTC)
c brown
Posted: 06 February 2018 16:43:44(UTC)
#23

Joined: 14/02/2013(UTC)
Posts: 341

Thanks: 1533 times
Was thanked: 226 time(s) in 108 post(s)
Do NOT panic! Stay in the market. We are all 'down' in the last couple of days. There is panic selling & media are fuelling it. It will all go back up. You are investing and not day trading. Personally I would look at this as an opportunity for you to drip feed in.

3 users thanked c brown for this post.
Tim D on 06/02/2018(UTC), J Thomas on 06/02/2018(UTC), Mariel Anne Gonzales on 07/02/2018(UTC)
JohnW
Posted: 06 February 2018 17:30:50(UTC)
#24

Joined: 14/01/2012(UTC)
Posts: 198

Thanks: 158 times
Was thanked: 199 time(s) in 94 post(s)
If you invest in the stockmarket, whether in shares, funds or bonds, you WILL lose money at some point. it's a fact of life. But if you stay put you WILL get it back and more besides. Since I started keeping computer records in 2009 there have been three full years where I have finished the year with less than I started with. But in the 5 years when I have made money I've made far more than I've lost. Remember, the alternative is a bank account paying probably near .5% so you don't need to make much to beat that. So I can only repeat what others have said, don't panic!
2 users thanked JohnW for this post.
Mickey on 06/02/2018(UTC), gillyann on 06/02/2018(UTC)
Law Man
Posted: 06 February 2018 17:33:19(UTC)
#25

Joined: 29/04/2014(UTC)
Posts: 249

Thanks: 100 times
Was thanked: 449 time(s) in 178 post(s)
Just to add to the reassurance given by previous posters: you have done nothing foolish. The reverse: you have started an investment fund which will repay you well after 30 years.

Of course you feel disappointed, or even worry. I do, seeing the heavy falls. It is part of the journey.

The only daft thing you could do is sell.

Rider: This assumes you already have cash savings to cover needs over the next few years.
3 users thanked Law Man for this post.
Tim D on 06/02/2018(UTC), Mickey on 06/02/2018(UTC), Mariel Anne Gonzales on 07/02/2018(UTC)
kWIKSAVE
Posted: 06 February 2018 17:51:56(UTC)
#26

Joined: 14/08/2013(UTC)
Posts: 433

Thanks: 128 times
Was thanked: 380 time(s) in 236 post(s)

Do not worry.

Without sounding disingenuous £300 is not much, even for a first time investor ?

You mention pound cost averaging but say over a year who is to know if this would/would not work to your advantage.

In the past , I have done a little bit of monthly or phased investing but in the majority of cases this has not been beneficial.

At some point a lot of the cash sitting on the sidelines will have to be invested in equities unless interest rates at levels of the 1990's return which seems a very far cry off.

The experienced investors here will have seen their portfolios plummet in the last few days but how many I wonder have actually sold much into cash. Keep dipping in and out can prove costly in terms of charges too.

The main requirement is to always keep say a rainy day fund of at least 6 months' net income in cash.
4 users thanked kWIKSAVE for this post.
Tim D on 06/02/2018(UTC), Mickey on 06/02/2018(UTC), gillyann on 07/02/2018(UTC), Mariel Anne Gonzales on 07/02/2018(UTC)
J Thomas
Posted: 06 February 2018 17:53:11(UTC)
#31

Joined: 22/02/2012(UTC)
Posts: 300

Thanks: 360 times
Was thanked: 412 time(s) in 167 post(s)
Standard Life Aberdeen is looking a fantastic bargain tonight. Down 9% since Friday, and now yielding a 5.01% dividend. Anyone who can buy in at todays closing price of £3.94 at 8.00am tomorrow will be well rewarded.
Although the market makers may well decide on a higher price before the open of the LSE.
2 users thanked J Thomas for this post.
c brown on 06/02/2018(UTC), Tim D on 06/02/2018(UTC)
Hank Elvis Dobbs (texan)
Posted: 06 February 2018 18:30:07(UTC)
#32

Joined: 19/08/2017(UTC)
Posts: 202

Thanks: 71 times
Was thanked: 206 time(s) in 102 post(s)
You will see all fund management groups top the 'loser' tables in a panic such as this .....tremendous buying opportunity as I stated back in january 2016 ("like buying a house during an earthquake") when Schroders could be bought between 2200 and 2500..They really do look handsome in my Sipp now,despite the last couple of days ...I have no doubt i will be saying the same about SLA in the not to distant future.
2 users thanked Hank Elvis Dobbs (texan) for this post.
J Thomas on 06/02/2018(UTC), Mariel Anne Gonzales on 07/02/2018(UTC)
Amos
Posted: 07 February 2018 00:25:42(UTC)
#33

Joined: 23/10/2010(UTC)
Posts: 11

Thanks: 13 times
Was thanked: 10 time(s) in 2 post(s)
I feel for you, but as everyone has said, hang on in there. All will be well in time. It sounds like you researched carefully and bought sensibly. Well done!

If it's any comfort to you I started investing in 1987, just in time for the great market crash of 1987. Still known as BLACK MONDAY, when the Dow had it's largest ever one day fall: 22.6%! FTSE lost 26% over the month. HK almost 46!! And I did have funds there. And yes, people really were panicking.

And yet I'm still here. No expert, not a financial person, but over the years the markets somehow have been very kind to me.

I've made mistakes, I've got lucky/been blessed, and I've spent a long time in the markets. Lost count of all the crashes and down periods.

But I learnt so much from that Black Monday start. Probably that's what has set me up for the whole of the rest of it, and the best thing that could have happened to me.

Losing money is painful, but at £300 this could be a really great lesson in investing, and your own way of doing it and dealing with it, and incredibly cheap at that price. Don't waste it! :))

ATB

8 users thanked Amos for this post.
Tim D on 07/02/2018(UTC), gillyann on 07/02/2018(UTC), Martina on 07/02/2018(UTC), Mickey on 07/02/2018(UTC), Sara G on 07/02/2018(UTC), JohnW on 07/02/2018(UTC), Mariel Anne Gonzales on 07/02/2018(UTC), Vince. on 07/02/2018(UTC)
Mariel Anne Gonzales
Posted: 07 February 2018 17:35:21(UTC)
#34

Joined: 05/02/2018(UTC)
Posts: 2

Thanks: 22 times
Was thanked: 4 time(s) in 1 post(s)
Thank you everyone for taking time to reply on my post.
4 users thanked Mariel Anne Gonzales for this post.
dyfed on 07/02/2018(UTC), Amos on 07/02/2018(UTC), Mr Helpful on 08/02/2018(UTC), Robin Stone on 11/02/2018(UTC)
Robin Stone
Posted: 11 February 2018 10:44:07(UTC)
#35

Joined: 03/05/2013(UTC)
Posts: 32

Thanks: 34 times
Was thanked: 6 time(s) in 6 post(s)
As you are only 32 it’s a good thing stock markets have fallen as you will be able to buy more at a cheaper level in the future. The correction impacts people who need to sell or people who can’t add more. The correction lost me over £10k but I am ok as I am buying more each month. You have learnt to spread your investments over time and you can use this wisdom for 30+ years.

Plus you have learnt stock markets can go down so if you may need the money out in a short time frame it’s risky. A lot about investing going wrong is learning eg my “safe” Carillion stock that was tied to government contracts and had good dividends was good learning for me pushing me further towards spread risks of investment trusts and trackers plus telling me even when things tank it’s better to sell for something than watch it go to nothing.
Chris Squire
Posted: 18 February 2018 18:04:35(UTC)
#27

Joined: 16/01/2013(UTC)
Posts: 21

Thanks: 2 times
Was thanked: 9 time(s) in 7 post(s)
Quote:
. . The experienced investors here will have seen their portfolios plummet in the last few days but how many I wonder have actually sold much into cash . .


I have been selling up by £10,000 weekly tranches since mid-November - the same way I bought into the market in the winter of 2008/9, an excellent time to invest. Now that prices have recovered a bit I will resume selling this coming week. So I’m glad to know someone is buying!

Despite what is fervently believed and frequently reasserted here, it’s timing that counts not what you buy. The US market (which drives the UK market) is as high as it can go so the risk of loss far outweighs the chance of gain.
1 user thanked Chris Squire for this post.
Mr Helpful on 18/02/2018(UTC)
andy mac
Posted: 18 February 2018 18:22:07(UTC)
#36

Joined: 12/02/2016(UTC)
Posts: 211

Thanks: 125 times
Was thanked: 179 time(s) in 98 post(s)
chris squie said

I have been selling up by £10,000 weekly tranches since mid-November - the same way I bought into the market in the winter of 2008/9, an excellent time to invest. Now that prices have recovered a bit I will resume selling this coming week. So I’m glad to know someone is buying!

Despite what is fervently believed and frequently reasserted here, it’s timing that counts not what you buy. The US market (which drives the UK market) is as high as it can go so the risk of loss far outweighs the chance of gain. end quote

not sure everyone agrees with you chris

If I had a choice time in the market wins although I fortunately cashed a bit in before the fall and have bought back. Just sensible not timing
philip gosling
Posted: 18 February 2018 18:29:07(UTC)
#37

Joined: 06/01/2013(UTC)
Posts: 145

Thanks: 35 times
Was thanked: 185 time(s) in 90 post(s)


Chris Squire said ...."Despite what is fervently believed and frequently reasserted here, it’s timing that counts not what you buy. The US market (which drives the UK market) is as high as it can go so the risk of loss far outweighs the chance of gain".


Well done you must be brilliant or lucky maybe even as rich as Buffet. They were saying the US market was as high as it could go 3 years ago so you did well not selling then. Predictions about falls etc are great for gamblers as they are bound to come true one day and people write books about their successes not many tell us of the failures - I invested £5000 in Fidelity Japanese Values when it was issued in the last century not long before it crashed and it still hasn't got back anywhere near its price 20 plus years ago.

I'll stick to time in the market not timing thanks.
1 user thanked philip gosling for this post.
Mickey on 18/02/2018(UTC)
Aminatidi
Posted: 18 February 2018 18:33:17(UTC)
#38

Joined: 29/01/2018(UTC)
Posts: 219

Thanks: 389 times
Was thanked: 96 time(s) in 56 post(s)
Could someone explain how comments like "The US market is as high as it can go" work?

I only ask as presumably someone would have been saying that in 1907, 1929, 1987, 2008.

You get the idea...
King Lodos
Posted: 18 February 2018 18:47:18(UTC)
#28

Joined: 05/01/2016(UTC)
Posts: 2,962

Thanks: 685 times
Was thanked: 4572 time(s) in 1771 post(s)
Chris Squire;57487 wrote:
Despite what is fervently believed and frequently reasserted here, it’s timing that counts not what you buy. The US market (which drives the UK market) is as high as it can go so the risk of loss far outweighs the chance of gain.


Yeah, but this isn't how you time the market .. This is just getting 'shaken out' .. Every investor's been there, and sometimes you get lucky, and sometimes you have to buy back in at much higher prices.

They call it 'climbing the wall of worry' because it's hard to hold your nerve and stay fully invested .. The worst thing for you would be a bear market in the next year, as you'll think it proves you made a sensible decision.

Whether markets crash or climb another 100-200% comes down to inflation, and central bank response – or something completely unforeseen .. No one knows .. If anyone knew, markets would already have fallen .. Here's an interesting metric – Bond Equity Earnings Ratios (BEER) .. Compared to bonds, stocks are still historically cheap – this is why the yield path is so important .. You're making a bet on it going one way – that's all .. It's a pure coin toss whether you're right .. The reason it's generally better to stay invested is because the most you'll protect is about 60% capital .. The most you'll lose out on from not being invested is virtually infinite .. So it's usually a bad bet

https://sidoxia.files.wordpress.com/2012/05/equity-yield-vs-treasury-yield-5-6-12.jpg


3 users thanked King Lodos for this post.
Mr Helpful on 18/02/2018(UTC), Martina on 18/02/2018(UTC), Freefall Junkie on 19/02/2018(UTC)
Mr Helpful
Posted: 18 February 2018 19:02:27(UTC)
#42

Joined: 04/11/2016(UTC)
Posts: 639

Thanks: 721 times
Was thanked: 845 time(s) in 398 post(s)
Don't forget also.

Re so-called Market timing.
Benjamin Graham had this to say in The Intelligent Investor. "Since common stocks, even of investment grade, are subject to recurrent and wide fluctuations in their prices, the intelligent investor should be interested in the possibilities of profiting from these pendulum swings. There are two possible ways by which he may try to do this : by way of TIMING and the way of PRICING. By timing we mean the endeavour to anticipate the action of the stock …… . By pricing we mean the endeavour to buy stocks when they are below their fair value and to sell them when they rise above such value. … We are convinced that the intelligent investor can derive satisfactory results from pricing …. We are equally sure that if he places his emphasis on timing, in the sense of forecasting, he will end up a speculator and with a speculator’s financial results This distinction may seem rather tenuous to the layman, and it is not commonly accepted in Wall Street."
4 users thanked Mr Helpful for this post.
King Lodos on 18/02/2018(UTC), Captain Slugwash on 18/02/2018(UTC), Martina on 18/02/2018(UTC), George C on 19/02/2018(UTC)
Mr Helpful
Posted: 18 February 2018 19:13:09(UTC)
#29

Joined: 04/11/2016(UTC)
Posts: 639

Thanks: 721 times
Was thanked: 845 time(s) in 398 post(s)
King Lodos;57492 wrote:

and sometimes you have to buy back in at much higher prices.

But nevertheless with discipline at more attractive valuations,
And maybe the money released has been working its' magic elsewhere in the interim.
No guarantees of course.
Mickey
Posted: 18 February 2018 19:26:26(UTC)
#39

Joined: 21/06/2010(UTC)
Posts: 558

Thanks: 1503 times
Was thanked: 579 time(s) in 277 post(s)
Aminatidi;57491 wrote:
Could someone explain how comments like "The US market is as high as it can go" work?

I only ask as presumably someone would have been saying that in 1907, 1929, 1987, 2008.

You get the idea...

Yes, if you keep saying the same line, you will perhaps be right on the odd occasion. No one knows how high markets can go, despite the recent highs we are not really that much higher than a few years ago. FTSE at 6930 in Dec '99, now 7200 after 18 years. People get fearful as new highs are reached, eventually the market talks itself into a decline.
King Lodos
Posted: 18 February 2018 19:29:13(UTC)
#30

Joined: 05/01/2016(UTC)
Posts: 2,962

Thanks: 685 times
Was thanked: 4572 time(s) in 1771 post(s)
Mr Helpful;57496 wrote:
King Lodos;57492 wrote:

and sometimes you have to buy back in at much higher prices.

But nevertheless with discipline at more attractive valuations,
And maybe the money released has been working its' magic elsewhere in the interim.
No guarantees of course.


I think the trickiest thing about markets today is that it's just as easy to make the case for stocks being 2x overvalued as it is 2x undervalued.

Warren Buffett's still a net buyer, while as we mentioned John Hussman was looking at valuations in a way that didn't help him out in these markets, and now he's having to buy back in – risking getting whipsawed of course.

You've always got to weigh up the possibility markets don't crash .. Certainly if inflation stays steady, stocks could stay in the sweet spot almost indefinitely – that's a neurosis for me, as I've usually got too much cash
3 PagesPrevious page123Next page
+ Reply to discussion

Markets

Other markets