Copy of "My shares have fallen 30%, what should I do?"

[NoRegretsCoyote]

Is this the case? I'm not so sure. Ample credit, liquidity, factors of production etc. There will be causalities but a supply side problem?

Large sectors of the economy are forcibly shut. Most of them will re-open when this passes, but some won't.

Also, workers that would have been hired won't be hired, and not all laid-off workers will be taken back on again.

This will have a supply-side impact.

 

[Fella]

I bought IRES this morning at 97 cent it was almost double that last time I bought . I'm not sure if that is good value or not , it was just down on my spreadsheet to buy this week and I hold investment trusts and IRES , not sure why I picked that must of been a reason .

Anyway would it be fair to assume that that is the sentiment towards where the house prices are going ? Or more generally do REIT'S tend to track property valuation? I know the rent freeze talk and sinn fein vote had some impact on price but not at same level as recent fall , thanks .

 

[SPC100]

On a yahoo finance chart that goes back to 2014, that is lower than any price since 2014! So it certainly is cheap! Well done for sticking to your plan. Looks like it has been doing 5-6c dividend per year last few years.

 

[joe sod]

I know you'll make the same point again, but at least make it in the right context, with the right facts.

Yes I read that link you posted its good and I agree with it, but it makes the point that yes if you had stuck with the ftse through all the turmoil of the last 20 years you would be still in positive territory (but you could make the same point about bonds or bank deposits), but the main point the article was making was that you should have been diversified globally to get the outsized returns so exposure to the US market was a must.
My point is which you are deliberately choosing to ignore is that the only market that delivered those outsize returns was the US market, therefore that was the only market actually that was a bull market. Of course the ftse and european are getting sold off like everything else and maybe it is just that they remain perennial laggards.
Even when I made this very point before in the thread "longest bull market in history" I was shot down because the bull market that was being discussed was the US not european or global markets. Therefore the implication was that the US was "the longest bull market in history"

 

[settlement]

Every bear market is 'different' and 'unexpected'
If it wasn't unexpected, it wouldn't have happened. World wars, recessions, Y2K... they all pass

 

[Duke of Marmalade]

Total Return Index - what about taxes and costs?

 

[McMoney]

But would it not be better to opt in and out of global equities in times of volatility. For example, say your portfolio has dropped 20% in value and you cash out. The value continues to fall (near 40% like what has happened now), then you buy back in, overall you have made no loss. The market may fall further or it may recover, either way you have limited loss and have increased potential gain (seeing that you purchased stocks at lower prices)

There were stock market investment experts during the American stock market crash of 1929 who thought they could ride it out. They were wrong. The great American depression of the 1930’s followed, until QE and the commencement of WW2 kickstarted the American economy again. What would have happened if your pension based on equities had matured in 1935, you would have got nothing from all your years of investing in stocks. This happened to ten of thousands of Americans.

 

[settlement]

But would it not be better to opt in and out of global equities in times of volatility. For example, say your portfolio has dropped 20% in value and you cash out. The value continues to fall (near 40% like what has happened now), then you buy back in, overall you have made no loss. The market may fall further or it may recover, either way you have limited loss and have increased potential gain (seeing that you purchased stocks at lower prices)

There were stock market investment experts during the American stock market crash of 1929 who thought they could ride it out. They were wrong. The great American depression of the 1930’s followed, until QE and the commencement of WW2 kickstarted the American economy again. What would have happened if your pension based on equities had matured in 1935, you would have got nothing from all your years of investing in stocks.

The problem is that you don't have a crystal ball and can't tell if the value will continue to fall. And if it does continue to fall you don't have a crystal ball to see when to buy back in.

 

[McMoney]

The problem is that you don't have a crystal ball and can't tell if the value will continue to fall. And if it does continue to fall you don't have a crystal ball to see when to buy back in.

I understand this, but you are still limiting loss by selling and rebuying. In the unprecedented situation that we currently find ourselves in, due to the virus, it was pretty obvious that stock markets would fall.

Last Monday the NYSE automatically stopped trading due to overall market cap falls of over 6%. This should have alerted most professionals equity investors that the market was turning very bearish, institutional investor houses were selling or being instructed to sell. These investors who sold at the start of the bear run can now rebuy the same amount of stock if they wish and still have at least 30% of the overall original cashed out sum held in cash. I agree no one has a crystal ball, but common sense would have dictated that a virus that interferes with free movement of people and goods would have a detrimental impact on stocks, particularly stocks that rely on such movements.

 

[settlement]

I understand this, but you are still limiting loss by selling and rebuying. In the unprecedented situation that we currently find ourselves in, due to the virus, it was pretty obvious that stock markets would fall.

Last Monday the NYSE automatically stopped trading due to overall market cap falls of over 6%. This should have alerted most professionals equity investors that the market was turning very bearish, institutional investor houses were selling or being instructed to sell. These investors who sold at the start of the bear run can now rebuy the same amount of stock if they wish and still have at least 30% of the overall original cashed out sum held in cash. I agree no one has a crystal ball, but common sense would have dictated that a virus that interferes with free movement of people and goods would have a detrimental impact on stocks, particularly stocks that rely on such movements.

Hi McMoney.

If it was obvious that markets would fall then I assume you shorted the markets and made a lot of money?

If so, congratulations.

 

[RedOnion]

it was pretty obvious that stock markets would fall

Of course it was...

institutional investor houses were selling or being instructed to sell

For every sale, there was a buy. So who was buying if all the investor houses were selling?

 

[McMoney]

Of course it was...


For every sale, there was a buy. So who was buying if all the investor houses were selling?

It was for me.

I never said all investor houses were selling some would have thought the stock was good value (I hope this was not your pension fund) and bought. They were wrong. The stock market is in free fall. There will be over selling and thus undervaluing of certain companies. Then it’s the time to buy.

 

[RedOnion]

I never said all investor houses were selling

So to be clear, you meant to say some were selling, but some were buying? So, we shouldn't infer anything from the comment?

I hope this was not your pension fund

My pension fund was already 100% in equities. So no, I wasn't buying apart from the additional AVC I made last week.

It was for me.

Well done.

Last night I was reading an Enid Blyton book to my kids. "A book of Pixie Stories". It's about Pixies, Brownies and fairies if you're not familiar with it. I'm almost convinced she also made stuff up.

 

[McMoney]

So to be clear, you meant to say some were selling, but some were buying? So, we shouldn't infer anything from the comment?


My pension fund was already 100% in equities. So no, I wasn't buying apart from the additional AVC I made last week.


Well done.

Last night I was reading an Enid Blyton book to my kids. "A book of Pixie Stories". It's about Pixies, Brownies and fairies if you're not familiar with it. I'm almost convinced she also made stuff up.

Your p

 

[McMoney]

So to be clear, you meant to say some were selling, but some were buying? So, we shouldn't infer anything from the comment?


My pension fund was already 100% in equities. So no, I wasn't buying apart from the additional AVC I made last week.


Well done.

Last night I was reading an Enid Blyton book to my kids. "A book of Pixie Stories". It's about Pixies, Brownies and fairies if you're not familiar with it. I'm almost convinced she also made stuff up.

Your pension funds value has decreased significantly, ups and downs of the market, investments can fall as well as rise and all that jazz.

Your a great Dad and a particular funny onion but in the morning the bear run will continue, (my crystal ball gazing sees this) fact over fiction and your pension fund will continue to drop in value. You may sprinkle some fairy dust on my predictions to make them go away. Let’s see who is right in the morning.

Tell your kids “ Those who don’t believe in magic will never find it.”

 

[JSnowWinterfell]

The market wants a gigantic fiscal response by governments. Monetry policy won't do it

This is the worrying point, it is showing the central banks have little tools available to control a crisis any longer. What happens if the central bank goes bust?

 

[joe sod]

What happens if the central bank goes bust?

how can a central bank go bust, sure they print currency out of nothing, you mean what happens if they lose credibility? germany 1920s or Venezuela now you mean. Surely in that scenario are you not better off sticking with the stock market at least you still own an asset

 

[joe sod]

stock markets must have risen a bit today, no doomsday predictions i notice

 

[Littlewillow]

Applying this to your personal financial situation.

If you have a pension fund, your investment horizon is long-term and you should not switch it to cash or bonds.

This makes sense. Conventional wisdom shows markets recover eventually and volatility comes with the territory, but what if you are due to 'retire' soon (18-24 months) and your pension pot is in a mainly equity based fund with with one of the main insurance firms, would it be wise to continue to do nothing? Or is there a case for switching to a 'less risky' fund which is more bond orientated?

 

[Brendan Burgess]

Hi Willow

I don't think so.

Most people will have the option of moving from a pension into an ARF on retirement, so there will be no need for them to exit the market.

It would be a different matter if you were obliged to buy an annuity.

Brendan