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Newbie Panic Attack
King Lodos
Posted: 10 February 2018 16:41:46(UTC)
#25

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You're buying Vanguard LifeStrategy 20?

I can understand not wanting to take any risk, but the bonds that make up 80% of that fund are not likely to be very good investments going forwards, as they're almost the most expensive they've been in a century .. It might be a case of very minimal returns for fairly moderate risk.

I'd go at least LifeStrategy 40 or 60 – and just hold cash (or NS&I growth bonds) to cushion the risk.


You might be reading about trading.

With an individual stock or bond, it *can* go to zero .. A company can fail, or a bond can default .. So if you're trading individual companies – depending how safe that company is – you may want to limit losses at some point .. But trading is for gamblers, statisticians, or people who enjoy spending all day looking at charts.

But with an index fund, you're buying exposure to a whole economy (in the case of Lifestrategy: the global economy) .. So individuals things it holds are failing all the time, but they're offset by thousands of other things doing well.

Short of alien invasion, Communists taking over, or the Singularity, it would be virtually impossible for you to get burnt on a broad index fund .. Anything that made you lose money over 20-30 years would likely be catastrophic for the economy anyway – and for all the pension funds, and insurance firms .. We'd all be in it together .. It's often said there's a point when tinned food and bullets would be your main concern (very unlikely).

I've taken a tiny knock on a few months of profits, but because I've got quite a lot of cash on the sidelines, it's nice to have an excuse to buy some more stocks .. Because cash is always losing value .. Stocks pay you to hold them .. When they get cheap: you can buy more, AND they pay you more .. What's not to love?
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North Star
Posted: 10 February 2018 17:08:02(UTC)
#27

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It's very easy to get into the Cpl Jones mode, 'don't panic-don't panic' but in reality with my FRCL trust shares,I'm still at least 12 times better off over 1 year and 58 times better off than having that money earning 1% in a building society. I'm actually far better off than that, having kept adding to this trust (amongst others) over the last 5 years.

My advice would be keep to a strategy and now look for further buying opportunities. I think computer selling generates far deeper troughs in price than necessary, so take the opportunity if you're able.
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Mickey on 11/02/2018(UTC)
Cameron Jake
Posted: 10 February 2018 17:31:56(UTC)
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Mickey;56904 wrote:
If you lost everything invested the chances are that this would be the least of your worries, imagine what would be happening in the world if stocks were to lose 100%


But what percentage can be lost and before you enter into a world where you will never recover?

i.e. that it might take 20 years to get you back to zero.

Cameron Jake
Posted: 10 February 2018 17:35:39(UTC)
#26

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[quote=King Lodos;56908]You're buying Vanguard LifeStrategy 20?

I can understand not wanting to take any risk, but the bonds that make up 80% of that fund are not likely to be very good investments going forwards, as they're almost the most expensive they've been in a century .. It might be a case of very minimal returns for fairly moderate risk.

I'd go at least LifeStrategy 40 or 60 – and just hold cash (or NS&I growth bonds) to cushion the risk.



I am in all three but the bulk was in the 20% life strategy!!!!!!
Cameron Jake
Posted: 10 February 2018 17:44:08(UTC)
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[quote=King Lodos;56893]I'm certainly a very big believer in diet's connection to anxiety and depression .. There used to 10x higher concentrations of minerals in fruit and vegetables a generation ago .. Also walking in the countryside .. Very big in Japan – do they call it forrest bathing? Very highly stressed population find huge benefit in walking and sitting with nature.

CJ _ I do that - but you end up feeling down in the dumps walking on your own.

Stocks have never gone to zero – apart from in Russia, when the Communist government seized assets .. I think if you'd invested in stocks just before the crash in 2007/08, you'd have broken even by about 2012, and now you'd be up another 100% ..

CJ- wow - this is insightful.


I do know people who sold at the bottom of 2009, and never got back in – and they just lost money ... You *might* find, like me, the neurosis goes when you know more about what you're investing in ... I bought Apple stocks the other day – and I know Apple so well, and love the products, it actually felt good losing nearly 20% on them very quickly .. I immediately doubled my position

CJ - I kind of do a bit - i.e. the companies that I am exposed to and the things they do.

.. Funds are a bit mysterious .

CJ well- supposed to be safer! and hands off... i.e." Coffee Table investor" - "Owning the world" - "Monevator"


Its a horrible feeling I feel like I have done a stupid thing and been really naive - but the consensus is "loose a few grand" "win it back" so far.

If this is the 07 - Ill be ok by 2024. And in the meantime I can buy some cheap houses maybe.
TJL
Posted: 10 February 2018 18:09:50(UTC)
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Forgive me if I'm wrong, but I don't think you opted to tell us which funds you have invested in?
It may have some relevance.
Entirely your choice of course.

King Lodos
Posted: 10 February 2018 18:19:24(UTC)
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Cameron Jake;56913 wrote:
Its a horrible feeling I feel like I have done a stupid thing and been really naive - but the consensus is "loose a few grand" "win it back" so far.

If this is the 07 - Ill be ok by 2024. And in the meantime I can buy some cheap houses maybe.


Well if you've always got some cash, or you're investing regularly, then it takes NOWHERE NEAR as long to break even .. because you've been able to buy when markets are down – and that's when you make really big returns.

It might be worth you playing around with Portfolio Visualizer – because then you can test holding stocks and cash and bonds in any balance, over 30-40 years of markets, and see what likely best and worst scenarios look like:

https://www.portfoliovisualizer.com/backtest-asset-class-allocation


But also you need to know what we've just had is *nothing* .. Normally we'd get that every 9 months – it's just been very calm for a while .. If you don't need to sell all your investments and use the cash tomorrow, then it really doesn't matter what their cash value is .. What you really need to prepare for is what you'll do when this past week happens 5 or 6 times in a row .. You need to work out how much cash and/or bonds you need to hold in general to make that tolerable – because you don't want to find yourself selling on an emotional or stress-induced decision .. That's the big mistake .. Investing should feel somewhere between good and boring
Cameron Jake
Posted: 10 February 2018 19:29:58(UTC)
#29

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Cant believe all the support I am getting here.

I am probably a little down due to additional antibiotics.

But having experts send in their thoughts is exceptionally comforting and I want to thank you all for that.

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jeffian
Posted: 10 February 2018 19:50:42(UTC)
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Cameron, 2 stories for you from my own life.

1) In 1972, at age of 21, I received some shares in a family-related business from a Trust. What nobody thought to tell me - and I suppose they thought it didn't matter as shares were riding high and would probably go higher- was that this incurred a charge to Capital Gains Tax. That bill arrived in January 1974................. Anybody who wasn't around in the 1970's cannot begin to imagine how bad things were (a history lesson for Corbinistas, but don't let's go there!). The FTSE hit a low of 163 or thereabouts. The value of the shares I held at that point did not cover the CGT! Only a loan from a friendly bank manager (you won't know what those are either!) got me through, but I didn't sell the shares.

2) My father died on 10 October 1987. On Black Monday 19/10/87 the stockmarket suffered its biggest ever one day fall. By the end of October, UK markets were down around 27%. Luckily, Inheritance Tax rules even then allowed you to replace Probate Values at date of death with actually realisation values, but the estate took a very substantial hit.

Now I won't deny to you that I didn't feel extremely sick at those times but the point is that, viewed with hindsight as a 66yo, they were a blip (albeit quite big ones!) in a lifetime of prolonged growth. I won't bore readers again with the tale of My Old Mum, who only ever bought shares and never sold, but believe me it worked.

As for Panic Attacks, at the end of the day it all comes down to your own character and appetite for risk. If you're going to suffer sleepless nights and worry every time markets fall, the stockmarket may not be the place for you but if you have the stomach for it, let things run for 10, 20, 30 years and today's worries will be forgotten.

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Dian
Posted: 10 February 2018 23:23:02(UTC)
#32

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Quote:
Jeffian wrote:

As for Panic Attacks, at the end of the day it all comes down to your own character and appetite for risk. If you're going to suffer sleepless nights and worry every time markets fall, the stock market may not be the place for you but if you have the stomach for it, let things run for 10, 20, 30 years and today's worries will be forgotten.

I totally agree. I will add three more periods like this. If you have the stomach for it, let things run for 2, 3, 5, 10, 20, 30 years and today's worries will be forgotten. However, it is wise to avoid overvalued stocks. Value stocks should shine in 2018.
GeneralZod
Posted: 11 February 2018 01:22:11(UTC)
#33

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One of the problems with these forums is that so many posters seem so very certain of what to do and what not do (I've come away from here frequently feeling very stupid and then, sometime later, realised I'd actually been correct!!) until another one comes along and completely overrides that idea leading to someone at the novice end feeling extremely confused. Take for instance, the poster who's just put:

"I can understand not wanting to take any risk, but the bonds that make up 80% of that fund are not likely to be very good investments going forwards, as they're almost the most expensive they've been in a century .. It might be a case of very minimal returns for fairly moderate risk."

Reading this is somewhat frustrating as LifeStrategy80 is exactly what I was told some months back by a number of posters on here would be a sensible long-termer to put £ into. I followed the advice - some in that and some in Target Retirement 2045 - and ended up a little later moving into 2045 as it seemed to be doing marginally better of the two - indeed, I was told they're very similar by someone on here. But now I'm reading "Vanguard 80? Not really a good idea at all..." Very helpful!

I have also been ridiculed for pulling money from funds when the market is looking grim (yet on the two occasions I did it, I saved some serious so believe me, I'm glad!), yet it seems one poster only did this very thing last week (Tony??) and has clearly done made a very good move - I note one responder has conveyed jealousy! - whereas I've stood and watched over £8000 erode into £5000!! On a different note, I recall someone last year saying: "You're not really getting this investing business..." blah blah blah, and going on to tell me that I should be buying into funds when they're down, not up. Hmmm. So why do so many keep buying into Terry Smith's loyally?!

As I've previously mentioned, when I started out investing three years back, I consulted a financial adviser with donkeys' years of experience. What did he tell me? Put everything in CF Woodford. Well, thank ---- I ignored him. Why did I? Little more than a hunch!!

My point is that the more I read from these posts and comments and thoughts, I'm not really sure even the most experienced and brilliant person in here has more of a clue than the original poster or myself!? I recall a few ppl once saying that using something like 'Salty Dog investor' could be really beneficial to learn more about the market etc...yet when I did it and mentioned it on here, the sarcy comments came back about how dumb it is paying a man for his thoughts on the stop-market! Indeed, the Salty Dog method of buying in and out of funds very rapidly is clearly one many of you on here would also ridicule.

To the original poster, all I can advise is that you read the advice columns in the papers and obviously pop your thoughts and ideas on here but take everything everyone says with a serious pinch of salt - I appreciate that a forum such as this is going to have differences of opinion but I think what I'm slowly learning is that when it comes to investing, we're all amateurs to some extent as a fair amount of all this is old-fashioned blind luck. Although it's sad to see my loss, I'll hopefully start to see gains again and I've made lots more than my money would have done in a cash ISA! So, I'm not that sad!!

On a final note, to those who keep accusing me of pulling in and out of funds blindly - untrue. As said, I was about 60% Life.80 (based on advice from here!!), some in Van 2045 and then 2 or 3 small amounts in 'satellite funds' including Schroder BRIC (ridiculed for this about 5 months ago but it's risen by 15% in that time). The only change I've ever made was consolidating L.80 into 2045 (hardly a major change) and then, last week, selling Schroder when the s--t hit the fan. As it's continued to go down and down since my doing that, I'm the one who's laughing. Yes, yes, and before I get accused of being thick and stupid for even those small changes in 4 months or whatever, go back to the Salty Dog Method who changes every bloody week and considers himself a professional!!



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sandid3
Posted: 11 February 2018 03:44:30(UTC)
#36

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The problem with all this advice to hold and don't sell is that the same people will be giving the same advice at the start of a bear market and all the way down.

Now the consensus view (and I agree) is that there isn't the remotest chance of our being in a bear market in 2018 and therefore major markets will probably make new all-time highs by the end of the year.

However, the last bear market started in Oct. 2007 with a 10.1% pullback in the S&P500, a small bounce and then carried on all the way down to a 56.7% decline by March 2009.

There is no way to know when any small decline is the start of a bear market - because the government can always interfere in the market in the future if it chooses to stop a bear market.

(In fact, I think it is possible to pick the end of a bear market, but that's beside the point.)

Equities are just one store of wealth - along with bonds, commodities, property and currencies. My view is that I simply choose not to keep my wealth in equities throughout a steep decline. I may miss some of the recovery but then I am missing better performing investments every day.

I choose to buy and sell. I have two objectives - a high return and a low drawdown. Two objectives forces compromise. The point is to learn how to buy and sell to meet your objectives with a systematic method that is within your capacity and that you understand.

(If you really only have one objective to buy and forget for thirty years then stick every penny in the most volatile sectors of emerging markets, technology, resources and small companies - and hope you are not at the bottom of a bear market when the thirty years is up.)
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Mickey
Posted: 11 February 2018 08:31:30(UTC)
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I would continue making regular investments but consider taking some of the profit out if I were worried.
TJL
Posted: 11 February 2018 08:33:37(UTC)
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I think the mistake you might be making is to regard anything said on this forum as 'advice.'
Surely it is 'opinion' not advice.
Why would you take advice from a bunch of strangers on a public forum on the internet (who may or may not know what they are talking about, and who may actually just 'like the sound of their own voice')?
You may also be confused about what has been said in relation to Vanguard 20 having 80% in bonds and Vanguard 80 having 20% in bonds.
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GeneralZod
Posted: 11 February 2018 08:50:11(UTC)
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I did a fair bit of reading last night and it seems that the Vanguard 2045 fund may actually be an Ok one for someone like the original poster. It's designed to, over a long period of time, drip-Feed more money away from stocks and into bonds thereby decreasing the risk element as time nears for you to, er, fall off the perch. Well, retire.

The general feedback seemed to be: "It doesn't generate major annual returns but it's safe for the amateurs provided you really have an intention of saving over a long period and as it's Vanguard, you'll get low fees. In short, it's probably one for ppl like the OP who haven't got much of a clue. A lot of the money is invested in US (unsure about that) but the OP could always do a little General Zod special and put 85% in sommat like 2045 and then pick 2-3 riskier funds to put a few pounds into as well." :)

Ok, I'll await the ridicule but I think my advice could be good. If ppl out there have better alternatives for the long-term investors who wants safety but reasonable returns, shout...
Mickey
Posted: 11 February 2018 08:54:41(UTC)
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Cameron Jake;56911 wrote:
Mickey;56904 wrote:
If you lost everything invested the chances are that this would be the least of your worries, imagine what would be happening in the world if stocks were to lose 100%


But what percentage can be lost and before you enter into a world where you will never recover?

i.e. that it might take 20 years to get you back to zero.


We once suffered around 40% losses in our portfolios which recovered after about 2 years I think.
King Lodos
Posted: 11 February 2018 09:15:41(UTC)
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GeneralZod;56934 wrote:
"I can understand not wanting to take any risk, but the bonds that make up 80% of that fund are not likely to be very good investments going forwards, as they're almost the most expensive they've been in a century .. It might be a case of very minimal returns for fairly moderate risk."

Reading this is somewhat frustrating as LifeStrategy80 is exactly what I was told some months back by a number of posters on here would be a sensible long-termer to put £ into.


You've got a habit of not listening, and probably not understanding at what you're investing in.

He's in LifeStrategy 20 (that's 80% bonds) .. You were recommended LifeStrategy 80 .. They're opposite ends of the spectrum.

People have been telling not to jump in and out of the market – guessing when things are going up and down – like you're betting on horses or visiting a casino .. Now you're saying, as of this week, you've made about £4,500 on £40,000 over three years.

That's a return of about 3.75% a year, during one of the strongest bull markets in history .. Throw in a few down years, and you'll be lucky to break even .. This is fine, so long as you learn where you've gone wrong .. If you'd just stuck it in an index fund, or LifeStrategy 80, and left it, you'd have almost £60,000 in your account .. If you'd put it all with Woodford – during a serious run of bad luck – you'd be £6,000 up, and with a nice income.

No one can tell you whether now's the right time to jump in or out, or which funds are going to outperform .. It's just as crazy asking random investors on a forum as it is listening to professional commentators on Bloomberg .. Because no one knows .. All people can do is tell you how to invest sensibly .. If it's taken 3 years to learn that, then it's not been a bad investment
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Hank Elvis Dobbs (texan)
Posted: 11 February 2018 11:29:48(UTC)
#40

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..Dont yer know it's raining outside..? I was going to post something about using these forums as a sentiment indicator...Yer know how the short termers (losers) always appear at the first sign of a slight pullback .Slight in my case as I have learned not to be a short termer and not being such, welcome these moments as opportunity and warmly accept that donated by the aforesaid.These 'types' suffer extreme share price anxiety..always trying to secong guess the market ..would never consider a buying or selling 'range'...always expecting to get out at the very top or in at the absolute bottom.Something that is impossible to achieve,they are cannon fodder to serious players.

Their whole 'merry go round mindset' virtually gaurantees underperformance and ultimate failure as the years drift by.Never achieving their goal, they scratch around in the dark blaming others for their 'bad luck' ....Drowned by impatience sceptisisn and indecision.Why buy a fund in the first place if your not confident the manager is capable?...or is it you dont really know who the manager is and you were simply attacted by recent performance?..The football manager analogy is compelling.

Back in the early 80's right up to the 87 'crash' I 'traded' funds however in those days it was far more lucrative with the advantage of Historical pricing...Just think ...everybody had a 24hr crystal ball.Unfortunately when it really mattered in oct 87 they were turned off.Looking back i regularly bought and sold funds such as Anthony Boltons fid spec sits the most succesful fund in history and many many others ...point is... had i just remained invested in such and 'gone fishin' i would have enjoyed greater reward had more time with the people that really matter ...and by that I mean a better quality of life ...healthier and less stressed.Have you noticed how your mood rises and falls with the market?

I do not envy anyone starting this journey today with all this tech ...and the speed in which it happens ..look after your heart before its too late and let somebody else take the strain after all THAT is what you are paying for.

...I was going to post that but decided to delete it instead ...

...starting to sound like one of them if only's...

x.
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Martina
Posted: 11 February 2018 14:01:05(UTC)
#41

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CJ may I suggest joining a local Rambling group? I agree walking alone can sometimes be a bit sad but it does provide some queit time to mull things over when needed. I've never looked back since joining the Ramblers for a good walk followed by a sociable lunch, great opportunity to chat about all sorts, even investing.
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andy mac
Posted: 11 February 2018 14:09:14(UTC)
#42

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If the period is long then you stick if its short dont invest

I take the view that I am making more than in a bank. I did have santander 123 accounts as £% was relatively risk free but as they cut then so did I

I have 1/3 in cash the rest invested

Another saying is dont be greedy leave some profit for someone else
So I dont go chasing top dollar ( I will take a punt no and then Hurricane at 8p was my best)
I took out my intial investment and then traded on the profit. Also about 3 weeks ago |I decided to top slice some and sell others, so I was sitting on more cash in the pf

If the reason or buying a stock still holds then hold

To the OP and Zod chill time is on your side, If you cant take the stress get out of the market at the earliest opportunity
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geoffrey Walton on 11/02/2018(UTC)
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