Where to put the money safe if you think a crash is coming

What fund is it and are those returns in Euro?

No offence, but I suspect that there’s a flaw in your calculations somewhere.

A single investor who is panic selling and buying back in on foot of geopolitical tremors will rarely if ever outperform.
 
Zurich global equities. Who is panic selling? That’s not what I am doing. I didn’t sell over Brexit. I didn’t sell when trump won the election. I haven’t sold on the back of Italy. I don’t care about 1 day movements or 1 month movements or 6 month movements. That’s not why I reduce my holdings in equities. I look at equities now and yes there is still room to go higher for the rest of this year. I personally don’t think that much higher though. I just don’t see stock markets growing 4-5% this year. Ask the same question on the downside and I think there is better than a small chance the equities could fall 4-5% this year. It doesn’t mean I think equities will crash. It doesn’t mean I don’t want to invest in equities but I have seen really strong growth in recent years and I am comfortable locking some of that growth in a more defensive fund for a period of time. Not saying it is scientific. Not saying it will end up doing better than a passive investment after 30 years. But if someone handed me a few hundred thousand tomorrow and said invest, I wouldn’t be sticking it all in equities at the moment. So why would I do it with my pension fund? Could be completely wrong but at the worst I lose out on some potential upside on a portion of my pension fund. I don’t think I will be missing out on much though.
And I like having some money on the sidelines that I can invest when I choose. Have never sold at the top and never bought at the bottom just to be clear. I just don’t believe that just because you can’t time the market, it doesn’t mean you shouldn’t try and protect some of the gains you make along the way.
 
Sunny said:
Ask the same question on the downside and I think there is better than a small chance the equities could fall 4-5% this year.
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There was already a 10 % correction in february in the space of a few days and a nearly 20% correction at the start of 2016 from which there was a rapid recovery, but you want to protect yourself from a measly 5%. Then if you go defensive presumably that means in euros, you protect the value of your fund denominated in euros, but then the euro crashes due to italy or greece wobbles. Then you worry about the euro so you try to switch to dollars or precious metal funds. This was exactly what was happening in 2010 when everyone was really worried about future of euro
 
Why is the time that it takes the Earth to revolve around the Sun relevant in terms of how markets perform for someone with a decent time-horizon?

“Time in the market beats timing the market” as the saying goes...
 
Sunny said:
Yes if you are trying to time the market to the day and avoid all downside but I have used the free switches that my pension allows to be more defensive at times and more aggressive at others in my choice of funds. I might go three years without doing a switch and I might do two in one year but it has worked out for me. Thinking of going defensive again for the second time this year. Getting to the point where I would be happy to sacrifice lost upside to offset the risk of a major correction. Too many geo-political issues at the moment. Bexit, Italy, Iran, North Korea, Trade wars, Oil prices, rising volatility etc etc.....Doesn't mean that equities will tank in the next 6 months but I don't think the possibility of any potential gains compensates me for the downside risks.

And no, I am not trying to time the market. I accept I will miss out on potential upside and I also accept that I won't call the bottom when I come back in but generally speaking it works out well.
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Why don't you use one of Zurich's Prisma funds? You won't have to use any of the 3 free switches and the fund manager will do any of the changes in the fund for you, based on movements in volatility? Save you having to make the changes.


You should also consider the long term effect of switching in bear markets. When prices go down, you get more units every month for your contribution. As equities are the best performing asset over the long term, the more units you have in equities when you reach retirement, the better.


Steven
www.bluewaterfp.ie
 
Gordon Gekko said:
Sunny, you’re displaying all of the worst behavioural traits of private investors when left to their own devices.

You are highly likely to end up materially less well-off as a result of your approach.
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The worst behavioral traits of private investors are feeling confident and buying when the market has done well and feeling pessimistic and selling when the market has done badly. Thus by definition buying dear and selling cheap.

This is the exact opposite of what Sunny is attempting, (wether successfully or not I do not know) to do.

I don’t know Gordon wether you don’t understand this basic point or are just repeating market insider nostrums without reading Sunny’s posts.
 
cremeegg said:
The worst behavioral traits of private investors are feeling confident and buying when the market has done well and feeling pessimistic and selling when the market has done badly. Thus by definition buying dear and selling cheap.

This is the exact opposite of what Sunny is attempting, (wether successfully or not I do not know) to do.

I don’t know Gordon wether you don’t understand this basic point or are just repeating market insider nostrums without reading Sunny’s posts.
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cremegg,

I understand perfectly what Sunny is claiming.

I don’t believe that it’s possible.

If Sunny can do what’s being claimed, then he/she shouldn’t be wasting time with us and should be off on a yacht in the Bahamas.
 
joe sod said:
There was already a 10 % correction in february in the space of a few days and a nearly 20% correction at the start of 2016 from which there was a rapid recovery, but you want to protect yourself from a measly 5%. Then if you go defensive presumably that means in euros, you protect the value of your fund denominated in euros, but then the euro crashes due to italy or greece wobbles. Then you worry about the euro so you try to switch to dollars or precious metal funds. This was exactly what was happening in 2010 when everyone was really worried about future of euro
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I am not talking about protecting myself from a measly 4-5% fall. I don’t care if equities fall 5% or 20% even. If they fall 20% when I am 100% invested then fine. I know if I wait I will get it back. That’s not the issue. I am not timing the market. The issue is do I want to be 100% invested in equities all of the time? No I don’t. At the moment, I am 100% in equities. I will probably reduce that to 70% or less for a period of time. My monthly contributions will still go into equities. I then have 30% earning 1% returns for a period of time. I am happy to sacrifice the potential upside on that 30% to allow me the opportunity to buy back and in if and when I think there is an opportunity.

What I am doing is no different to what fund managers do. The equity fund I am in is currently 99% invested in equities but the Fund Manager has discretion to drop down to 80%. But these guys will hardly ever do that because their main target is matching or slightly beating the benchmark. So if the benchmark falls 20%, they don't really care if the fund falls 15%. It is still outperforming. Likewise, they can't afford to have money sitting in non-equities in a rising market as they will under-perform so they are nearly always fully invested. I am not saying I know better than fund managers but there are times when I don't want to be fully invested in equities. I can't call the market and like I say, I have never got out at the top and in at the bottom but the approach works for me.

Stephen, funny enough just starting looking at the Prisma funds to see if it works. Trying to get historical information about what allocations have been since launch but hard to get any information. Curious to know how active it is managed. I take your point about units and selling in a falling market. That's why I can sometimes go for a long time without doing anything. Even if equities are falling, I would prefer to wait it out as wait for the recovery rather than trying to cut losses.
 
Gordon Gekko said:
cremegg,

I understand perfectly what Sunny is claiming.

I don’t believe that it’s possible.

If Sunny can do what’s being claimed, then he/she shouldn’t be wasting time with us and should be off on a yacht in the Bahamas.
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Ah here. I have an annualized return of just over 10% over 10 years compared to 6% of the fund itself . I am not exactly generating hedge fund returns here.
 
Sunny,

If you are generating 10% pa over a 10-year period (in Euro), then well done !

You are definitely in the minority of individual investors, and you probably should be working in investments / wealth management (assuming you are not already doing so).
 
Sunny said:
Stephen, funny enough just starting looking at the Prisma funds to see if it works. Trying to get historical information about what allocations have been since launch but hard to get any information. Curious to know how active it is managed.
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I don't think it's readily available. I certainly don't have access to that history without having to ask Zurich to provide it.


Steven
www.bluewaterfp.ie
 
Gordon Gekko said:
Sunny,

Is Saxon Warrior going to win the Derby?

I’m tempted to lump on at Evens.

Gordon
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Is that supposed to be witty? If you want to gamble on horses work away. If you want to invest or gamble in shares work away. If you want to invest in bitcoin go ahead. If you want to spend your money on booze and prostitutes, then go ahead. I have over 20 years financial services experience. I have lost and made my own money and I have made and lost other peoples money. I have yet to discover one system of investing that is a guaranteed winner. I have seen buy and hold investors lost their shirts in the credit crisis. I have had quantitative magicians explain to me why CDO Cubed of residential securities can't fail because they have a model that tells them so until the model didn't work anymore. I have seen technical traders sell on signals triggered by nothing but fat fingers or dealer error. I have had fund managers tell me that their 'Quantitative approach' is much better than traditional fundamental approach and I have other fund managers tell me that their bottom up approach is the best way. I could keep going on and on and on.....Only thing in common is that they all have lost money eventually.

I am not saying what I am doing is correct. I am not telling other people what to do. There are financial advisors on here like Stephen who people should listen to much more than me. I am not some financial genius but I can read newspapers and broadly understand economic data. That allows me to take a view with my money. You might think it is the same as gambling and maybe it is but so is putting your money in an equity fund and leaving it there because past performance tells you that this is the correct thing to do......
 
Nobody has ever lost money investing in global equities over any 20 year period since records began. And I’m talking real, not nominal. That should be the starting point for any investor, albeit de-risked depending on his/her risk tolerance.

Now let’s take your approach, Sunny, which is to chop in and out due to (say) the political concerns that you cited earlier. It’s a flawed approach and one that condemns you to poor returns unless you are the Messiah.

A couple of further points, the returns from that fund sound poor. Global equities should have delivered around 10% over those periods.
 
Gordon Gekko said:
Nobody has ever lost money investing in global equities over any 20 year period since records began. And I’m talking real, not nominal. That should be the starting point for any investor, albeit de-risked depending on his/her risk tolerance.

Now let’s take your approach, Sunny, which is to chop in and out due to (say) the political concerns that you cited earlier. It’s a flawed approach and one that condemns you to poor returns unless you are the Messiah.

A couple of further points, the returns from that fund sound poor. Global equities should have delivered around 10% over those periods.
Click to expand...

Says who? You??? I am delighted if you are investing in a global equity fund that is delivering a 10% annualised return in a 10 year period. Which one is by the way? I presume are you are invested in equities since nobody has ever lost money in a 20 year period??? Because we all know that past performance is a perfect indicator of future performance. Foolproof strategy there. I feel silly now.

And by the way I never said investing long term in equities wasn’t the right idea. That’s exactly what I am doing
 
I for one congratulate Sunny for his wisdom and for sharing his experience

It was obvious back in 2008 when p/e was through the roof that equities were overpriced.

What Sunny is saying makes perfect sense and this is a game pension fund managers get paid to do world over
 
moneymakeover said:
I for one congratulate Sunny for his wisdom and for sharing his experience

It was obvious back in 2008 when p/e was through the roof that equities were overpriced.

What Sunny is saying makes perfect sense and this is a game pension fund managers get paid to do world over
Click to expand...

Just to be clear, I missed 2008 and had to ride it out until they picked up again which it was always going to happen. I did well in 2015 thanks to China wobble and end of bull run. Missed brexit as well. I am not advocating not investing in equities. I am advocating that unless you have large sums ready to invest, it is not a bad idea to have some bit of your pension in a more defensive fund until an opportunity arrives.
 
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