Stock market correction or bear market/crash? Either way I bailed.

you only lost 10% and it was your first time investing in the markets proper , if you take enough time out and work out which strategy suits you , you have plenty of time to do well out of the market in the coming years

you might be better with half your money in fixed income , not only is it less volatile , when equities tanked in 2008 , bonds rose ( though not to the extent which stocks dropped ) , the stock market is rigged in the short term , anyone who thinks otherwise is deluding themselves , only 50% of americans own stocks and americans own more stocks than anyone , most stocks are in the hands of the 1% , thats not a paul murphy style call for revolution but the big guys are always making money , even when they were on the brink in 2008 , they were handed tax payers money to continue their game some more

all the talk this past three or four months was ultra bearish , when greece happened , it looked like contagion would spread and markets dropped , then china appeared to be slowing down in a dramatic fashion and european markets gave back everything they had gained since draghi announced QE , nothing has changed since the first of october in terms of china , a sluggish europe or greece , yet the s+p is now possitive for the year and the german dax is up 16% in the space of four weeks despite being technically in a bear market

the market is rigged , only way money can be made is by becoming a trader ( which means giving up your day job and learning how to read technical charts of all kinds ) or to have a buy and hold strategy in a well diversified etf , take a look at the s+p statisitcs this past century , since 1985 , the market is up about eight times where it was in october of that year , from 1955 to 1985 , the returns were not far off that either , this despite the market being lower in early 2009 than it was in late 1996 at one point , if you have a short term view of even three years , you are very likely to make nothing , majority of people will never get rich in the market as either they are not smart enough or dont have enough capital to start out with , have modest goals and accept that everything is beyond your own control bar your refusal to hit the sell button everytime wall st decides to hold the little guy by the ankles and shake him for cheap stocks
 
forgot to add land lord , maybe you would be better not investing all in one go , maybe invest every quater or so , even in years like 2013 , there was a 5% pullback every few months

my hunch is that the markets are going to continue rising in the coming year or two , the fed in america is completely toothless and QE is only really beginning in europe , the big guys didnt like the 30% run up from january to march off the back of draghis announcement so it was all given back , new highs in europe should be seen in the next six months , especially the FTSE as energy appears to have bottomed and mining was as bad as it could possibly be
 
landlord said:
I only started studying the stock market at the start of this year. So would still most definitely consider myself a rookie. I invested a large lump sum at the start of August and lost just over 10% within three weeks and about 12% when I sold last week. (Mid sept 2015).
After a six year bull run I believed when I started investing in early August that the equities market had a year or two to go before it peaked and this may still be true. My goal was a 15 year long term investment.
It is said that the long-term investor should not try to time the market and sure, had I left my funds alone for 15 years I probably would have beaten deposit rates by a descent margin. But it just doesn't make sense to me to continue investing at the top or close to the top of a 6 year bull run, especially when there are so many negative indicators, both politically and economically. Stocks are massively overpriced and there currently seems to be tremendous economic instability. Statistical history suggests that this bull market may end fairly soon, so it seems logical to wait for better value.
I would hope within a year or two my original chosen funds would have dropped in value to a point below or significantly below what they are at now. (But who knows).
As for the timing of my exit, I did consider hanging in for a bit longer to at least try to recover my losses and at best pull out closer to the peak of the current bull run. (Greed?)
However after several restless nights concerned over when exactly that peak will be, I started to think to myself what would I do if the market suddenly dropped 5 or 10% in one day, well probably the same as most investors and consider the drop to be a temporary blip and wait for the rally the following day, potentially suffering an even greater loss if it's a genuine crash. After all the volatility in the markets in the last few weeks has frequently seen 2 to 3% falls and rises in the main indices in a single day. However I suspect a true crash would likely catch many including myself by surprise.

As Rory Gillen says in his book 3 steps to investment success (A great book I have to say), "Avoid letting volatility interrupt your savings or investment plan. I personally psychologically couldn't handle this volatility even though I had a 15 year long term investment plan. I suspect I would have handled it much better at the end of a 6 year bear run as opposed to the end of a 6 year bull run.
I am aware that I have possibly made a stupid rookie mistake and converted what may have been a temporary loss into a permanent loss. However perhaps I have saved a small fortune. Only time will tell. But either way I would prefer to bail out a year or two early then a day too late.
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Not to sound rude but had you studied sufficiently you would have known one of the most basic rules of investing: don't invest unless you are willing to leave the money alone for 5 years at least. You were not willing to leave it alone.
 
even the best investors can get it wrong Warren Buffet is not having a great run lately. He got Tesco badly wrong and then he sold it at its rock bottom last year, he also has big investments in Walmart and IBM which are doing badly. He invested in Intel a few years ago then quickly sold it before Intel appreciated by 65% reasonably quickly afterwards. Buffet was right about technology stocks back in 2000 but maybe he is wrong now as technology is a huge part of the global economy, can a huge fund like Berkshire continue to ignore it
 
joe sod said:
even the best investors can get it wrong Warren Buffet is not having a great run lately. He got Tesco badly wrong and then he sold it at its rock bottom last year, he also has big investments in Walmart and IBM which are doing badly. He invested in Intel a few years ago then quickly sold it before Intel appreciated by 65% reasonably quickly afterwards. Buffet was right about technology stocks back in 2000 but maybe he is wrong now as technology is a huge part of the global economy, can a huge fund like Berkshire continue to ignore it
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its strange how devoted to IBM buffett is , tech has a trendy vibe about it in terms of drawing investors , facebook and google are cool , apple no longer has the cool factor and IBM is a grand dad , the definition of old tech , i guess buffett is a hold forever investor so he probably thinks facebook is a short term success story and that IBM will be there when trends come and go
 
I was in a position yesterday where I could sell all my ETF's at no loss so I took it , got tired of the tax treatment and the 8 year roll up , I made a few thousand. I've learned a lot from the experience mostly that all shares seem to be rise and fall together .

Over yeseterday and today I bought 100k in investment trusts using the AIC website (thanks sarenco) I went with the cheapest trusts from a management cost and bought 10 of them , I went with a mix of global / uk / Japan a property fund and a biotech. These where all purchased with Saxo bank in gbp but my account is in Euro the fees where reasonable .
I had ~ 170k left in Saxo I picked 15 companies at random in different sectors and bought 10k worth of shares in each , they are large companies household names . My shares are all losers at the moment I think I'm -3000 or so that's just spread and currency costs and fees I reckon . Anyway I feel a lot better that I don't have to worry about the 8 years , I'm going to continue to maybe spend 5k a month on a random blue chip share for the next few years and with a bit of luck I should come out up.
 
Hi Fella

Overall a good strategy, but don't buy completely at random. Make sure that you are not overexposed to a particular sector or a particular currency. Randomness might achieve this, but it might also result in concentration by accident.

Fella said:
I'm going to continue to maybe spend 5k a month on a random blue chip share for the next few years and with a bit of luck I should come out up.
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With a pot of €250k, €10k represents only 4% of your invested money. Assuming you have a home and an income, then you do not need to be that diversified. When investing new money, it might be administratively easier to buy more shares in one of the companies you already own.

Brendan
 
Thank you Brendan ,

I am buying in different sectors , because I bought all the trusts in GBP I bought the individual shares in euro and dollars , I am very long term buy and hold , I have been reading about dividend income as I have never dealt with it before , I am a low tax payer so from my reading I basically have to do nothing as dividends are withheld at source. It seems complicated on revenue website , double taxation agreement etc depending on what exchange you bought the shares , I understand Irish dividends are taxed at source. I will wait and see what I do re dividends when I get paid I'll see what saxo deduct and contact revenue .

If there is much admin in the paying tax on the dividends then I will just top up on what I have. I have no real belief in stock market value I am happy to believe in efficient market and just top up monthly. I continue to save ~10k every month and have no real need for the money now I could deal with a 100k loss on my investment should the worst happen its only numbers on a sheet , i'm early thirties still so can give these shares 20 or 30 years .
 
I am going in that direction myself towards investment trusts. I have been investing for over 10 years now and this has been my worst year. I had a big proportion in energy stocks also spain, portugal, poland and russian etfs. The thing is Im giving back some of the gains I made before so its not as bad as losing new freshly invested capital. The gains I made previously probably made me a bit over confident. This year has made me lose confidence in my own judgement. Im still up alot on investments I made back in 2012 but everything I bought in the last 18 months has been going down.
 
Well 2016 has really started horribly and sentiment is terrible. From my understanding the only big thing that really happened was the lifting of selling restrictions on some Chinese shareholders. Yet it resulted in a crescendo of selling throughout the world. It begs the question are markets really rational. I'm surprised nobody has been commenting on the situation now I know the Irish market has not been affected as much. Even on other blogs there is very little rational analysis of the situation now nobody seems to be making sense of it.
 
I still have the same fears in the direction of the markets that I had a few months back.
My original portfolio has dropped by another 2% since I sold......and my new portfolio which includes gold related products including physical gold and gold/silver royalty companies like RGLD, FNV, SLW are doing well. I have taken a huge gamble on gold but I am able to sleep better at night, even when initially its value dropped fairly significantly.
 
fair play to you at least you took decisive action. Maybe gold has bottomed, or nearing it along with commodities in general but they have been falling since 2011. Thats what has damaged my portfolio I had too much oil and emerging markets including emerging europe in my portfolio. I thought I was buying cheap unloved stocks.For example I bought a polish etf in 2014, the polish economy has been very strong but the stock market has declined by nearly 20%, because of russian concerns and banking concerns but nothing concrete. Also I bought with US dollars which makes it look worse, because the dollar appreciated by 20% in that time. So therefore on paper I am down 40% on this ETF even though the polish economy has continued to prosper. I thought I was acting rationally but the markets have made a fool out of me.
 
landlord said:
I have taken a huge gamble on gold but I am able to sleep better at night, even when initially its value dropped fairly significantly.
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I would suggest you are sleeping well because your portfolio is doing well, not because you are comfortable with the risks you are taking.
 
Brendan Burgess said:
Hi Landlord

This makes no sense to me. If you have taken a huge gamble on anything, you should not be able to sleep very well.

Brendan
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What can I say except that I genuinely am able to sleep better? Perhaps I am using the word gamble more in my perception of how other investors might see it.

Jim2007 said:
I would suggest you are sleeping well because your portfolio is doing well, not because you are comfortable with the risks you are taking.
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As I said in my last post, initially my new portfolio went down, but this time round I didn't get that sinking feeling in my gut that I had made a bad choice. Gold may go down in the short time and equities bounce back, but I believe over a medium term investment 3-5 years that gold/silver has more upside potential than non precious metal equities. But who knows....I only invested a third of the amount I invested last time. I am taking a cash is king approach this time. But I will be making monthly purchases of gold/silver related products, but will keep my ratio of cash 2/3s to 1/3 precious metals the same.
 
Good luck in your investments everyone.

I deleted the app so never check if my investments are up or down I don't care , I am buying 5k a month now so if its down I am buying cheaper . As Warren Buffet says you don't buy a house/farm whatever and get it valued everyday. You can't control the markets history says I should be up but history also tells me I'm young now early thirties so i'm going to face a few crashes in my lifetime , no point beating myself up over each one.

The key to me now is every penny I have invested I can afford to lose , I don't need the money , in fact I am starting to realise that I probably have more money than I will ever need in my lifetime, if your over thinking it you have probably invested too much IMO.
I also think people shouldn't invest until they have all loans paid off (maybe with exception of very low trackers )and a decent few months worth of savings put away , but thats just my opinion.
 
Very sensible advice. If you're buying quality, are sufficiently diversified, and you have a long-term time horizon, periods like this merely represent a temporary loss of capital. And as was rightly pointed out, if you are investing on a monthly basis for many years to come, you actually want markets to be volatile. The trick is not to panic and turn a temporary loss of capital into a permanent one by selling your portfolio.
 
joe sod said:
Well 2016 has really started horribly and sentiment is terrible. From my understanding the only big thing that really happened was the lifting of selling restrictions on some Chinese shareholders. Yet it resulted in a crescendo of selling throughout the world. It begs the question are markets really rational. I'm surprised nobody has been commenting on the situation now I know the Irish market has not been affected as much. Even on other blogs there is very little rational analysis of the situation now nobody seems to be making sense of it.
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vast majority of s+p components are deep in bear territory , the overall market was deceiving as a handful of winning stocks were keeping the market up , this is the worst start to a year ever yet markets are only 9% from all time highs which suggests there is plenty of room to fall , things are incredibly bearish right now , a very possitive jobs report in the usa done nothing for stocks today , an economy can be improving while markets chose to go the other way
 
joe sod said:
fair play to you at least you took decisive action. Maybe gold has bottomed, or nearing it along with commodities in general but they have been falling since 2011. Thats what has damaged my portfolio I had too much oil and emerging markets including emerging europe in my portfolio. I thought I was buying cheap unloved stocks.For example I bought a polish etf in 2014, the polish economy has been very strong but the stock market has declined by nearly 20%, because of russian concerns and banking concerns but nothing concrete. Also I bought with US dollars which makes it look worse, because the dollar appreciated by 20% in that time. So therefore on paper I am down 40% on this ETF even though the polish economy has continued to prosper. I thought I was acting rationally but the markets have made a fool out of me.
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not only has oil not yet bottomed , its inches away from another leg down
 
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