Irish Stock Market Plummeting

emsman

Registered User
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17
has anyone noticed that the ISEQ has been in free-fall the last couple of days. Having just put 25% of my investment into Celtic Freeway funds in Quinn life i wonder should i just get out of it. Even though i hope to leave the investment in for 3+ years.
 

capall

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339
If this is the way you are going to react the stock market is not for you my friend
 

demoivre

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2,585
has anyone noticed that the ISEQ has been in free-fall the last couple of days. Having just put 25% of my investment into Celtic Freeway funds in Quinn life i wonder should i just get out of it. Even though i hope to leave the investment in for 3+ years.
3 years is too short a time frame imo. 7 to 10 years is what I would be looking at for this type of investment.
 

Queenspawn

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57
Yes I noticed that alright. But as the others are saying this is the long game. If you don't have the nerve maybe you need to play a lower risk sport. The China fund fell like a lead balloon last month, everyone was tempted to bale out but lo and behold its up another 2-3%.

The Quinn funds are great because you can track them online.. the Quinn fund are a pain because you can track them online.


QP
 
J

Jaid79

Guest
Yes I noticed that alright. But as the others are saying this is the long game. If you don't have the nerve maybe you need to play a lower risk sport. The China fund fell like a lead balloon last month, everyone was tempted to bale out but lo and behold its up another 2-3%.

The Quinn funds are great because you can track them online.. the Quinn fund are a pain because you can track them online.


QP
What sort of fees would some body incur for taking part in The Quinn funds? also wouls 10k be a reasonable amount to start with?
 

joe sod

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690
The ISEQ has had an unbelievable run over the last few years especially the last year it peaked at 10,000, now its at 9100, As recently as a year ago it was at just 7100. Therefore I think it is reverting to the mean and is going to give back alot of those gains so be prepared for more big falls, the warning shot was fired last february when the market wobbled at 10100. Yes the mantra goes that investing is a long term game yet the nasdaq has still to recover the heights it achieved in 2000 and this is after a strong resurgance in high tech over the last two years. If you are concerned then put a 15% stop loss or what ever margin you are comfortable with, if the market falls to that level then sell and move onto something else.
 

ronaldo

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399
put a 15% stop loss or what ever margin you are comfortable with, if the market falls to that level then sell and move onto something else.
I think the strategy followed by most investors should be the exact opposite of the above. It's usually better to hold and buy as much as you can as the market drops.

Alot of inexperienced investors would say that, had you bought the FTSE 100 index at the hight of the 2000 bubble, you would only be making back your money now. However, had you kept buying as it dropped, your average cost wouldn't be that of the 2000 peaks - it would be alot lower. Add to that the dividends you would have received in the meantime and you would be sitting pretty now.

Think about it from this point of view - Everytime any market has dropped in history, it has always recovered and reached new peaks. Therefore, why sell when the prices drop 15%. Instead, you should buy more safe in the knowledge that, unless the markets do something that they have never done in history, you will recover your loses and gain more on top.
 
G

gonk

Guest
Alot of inexperienced investors would say that, had you bought the FTSE 100 index at the hight of the 2000 bubble, you would only be making back your money now. However, had you kept buying as it dropped, your average cost wouldn't be that of the 2000 peaks - it would be alot lower. Add to that the dividends you would have received in the meantime and you would be sitting pretty now..
Inexperience doesn't come into it. For the investments made at the peak of the market, you would only be making your money back now. The performance of the later stream of investments is irrelevant.

Think about it from this point of view - Everytime any market has dropped in history, it has always recovered and reached new peaks. Therefore, why sell when the prices drop 15%. Instead, you should buy more safe in the knowledge that, unless the markets do something that they have never done in history, you will recover your loses and gain more on top.
Well, after 17 years the Nikkei 225 is only around half of its 1990 peak. If it takes as long again to get back to par, you're into investment timeframes that are too long for all but quite young investors. As Keynes said, "in the long run, we're all dead."
 

PMU

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955
has anyone noticed that the ISEQ has been in free-fall the last couple of days. Having just put 25% of my investment into Celtic Freeway funds in Quinn life i wonder should i just get out of it.
Emsman, you should note that the ISEQ dropped by 30 % in 2002 and by about 4% the previous year. So it has experienced big drops in the past. As far as I can remember, based on recent performance, you’ve a one in three chance that an investment in the ISEQ will result in a loss in any year; or, to put it another way, you’ve a chance you will suffer a loss one year in every three. So there is nothing ‘significant’ about the way the ISEQ is behaving at present and we’re only halfway through the year.

If you are concerned then put a 15% stop loss or what ever margin you are comfortable with, if the market falls to that level then sell and move onto something else.
If you do this all you will end up with is a 15% loss. Your ‘something else’ will then need to increase in value by about 18% just to break even. It also means that you’ll lose all your capital after 6 bad investments.

It's usually better to hold and buy as much as you can as the market drops.

While I agree with ronaldo that market drops are an opportunity for buying , but it’s not to “buy as much as you can”, but to buy as much as you need to maintain the weighting of the index in your portfolio.

Also your asset allocation strategy should also have forced you to sell or to allocate away from the ISEQ when it was on the way up if it were taking up a greater % of your portfolio than its allocation justified.
 

joe sod

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690
"Emsman, you should note that the ISEQ dropped by 30 % in 2002 and by about 4% the previous year. So it has experienced big drops in the past. As far as I can remember, based on recent performance, you’ve a one in three chance that an investment in the ISEQ will result in a loss in any year; or, to put it another way, you’ve a chance you will suffer a loss one year in every three. So there is nothing ‘significant’ about the way the ISEQ is behaving at present and we’re only halfway through the year. "

Yes the iseq dropped in 2002 but it was not in bubble territory then, it was probably safer in 2002 than many other markets around the world, however the wobbles in 2001/2002 was caused by high tech in which the iseq wasn't especially overweight in, this time it is being caused by the subprime collapse and financial sector, and this is where the iseq is now overweight, the iseq has never before experienced a one year gain like the last year, so the best stategy is sit on the sidelines or invest in safer markets around the world
 

emsman

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17
Cheers for all replies. Didn't know it was gonna be that hot of a topic. But i have one more question onit.

I only intend to leave my money in these funds for 3-5 years. SO would it be better to take out my 25% in the Celtic Fund and transfer it to some other fund perhaps Emerging markets or China? I know all about leaving it in long term and the currency risk with other markets but the ISEQ is at its highest in years and i would think that in the next 3-5 years i cannot see myself makin a profit with it??
 

capall

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339
As has been explained in earlier posts by moving out of celtic funds you will be locking in your loss. This is only a valid stategy if you believe the ISEQ is going to continue to slide with no bounce back.
By moving to a china/emerging market funds which are areas which are potentially more volatile than say irish or european stock markets and also subject to currency risk you could find yourself cashing out in 3-5 years time taking another loss. In these funds you have to be able to sit out market volatility
 

emsman

Registered User
Messages
17
Yes, I understand all that. But that is my point I do think the ISEQ is gonna continue to slide in the short term anyways. So really what i'm asking is what do other people think on how the ISEQ is gonna fair out in the next 3-5 years??
 

charttrader

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117
SO would it be better to take out my 25% in the Celtic Fund and transfer it to some other fund perhaps Emerging markets or China? I know all about leaving it in long term and the currency risk with other markets but the ISEQ is at its highest in years

US markets are at all-time highs. European markets are at all-time highs. Emerging markets have been going absolutely bananas over the last few years and China, despite the recent correction, has enjoyed stratospheric returns over the last few years. I have no idea where the ISEQ will be in 3-5 years but if you're nervous because "it's at its highest in years", then the aforementioned markets are hardly the place for you either.
 

markowitzman

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interesting this eve on cnbc lehman asset manager was recommending protective puts on portfolios with exposure to banks etc.
 

joe sod

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690
My advice is stay away from the iseq, there are a few excellent companies in the iseq that compete internationally that are worth putting money into, i know im not allowed name them. It is true that the DOW has reached all time highs but it has only recently taken out the highs reached in 2000, so you would have waited 7 years to be back even in dollar terms, however when you take into account the substantial depreciation of the dollar over that time, the dow has still to reach the highs of 2000. Also the DOW is much more diversified than the iseq with the big oil companies and mining companies causing it to reach all time highs (dollar terms). The majority of the money in the iseq is held by overseas institions and hedge funds, and this money is not loyal but chases returns, that was the reason for the huge run up in the iseq last year. If you don't want to lose out in currency transactions then invest in the big european companies eurostox 50 etc.
 

joe sod

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690
I also agree with the other poster about staying away from emerging markets, because an awful lot of hot money has flowed into them, in fact the iseq is alot safer than emerging markets, i think europe is your safest bet then you wont lose out on currency although i can't see the euro rising much further against the dollar.
 
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