Where to put the money safe if you think a crash is coming
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Gordon Gekko
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German bunds custodied in Switzerland!
Gordon Gekko
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It’s more likely the opposite, i.e. a sign that things are going well. Plus Spanish property prices fell hard and have recovered more slowly.
elacsaplau
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Well, there's definitely a crash on its way.
2 weeks ago, this landed in my inbox......
A Rare ‘Sell’ Signal on US Equity Markets: Trying to time markets isn’t a strategy we adopt but we do like to understand when the market appears to be moving from bull market conditions to bear market conditions and vice versa. The 120-year old technical indicator we follow, Dow Theory recently gave a ‘Sell’ signal on the US equity markets, raising the probability to about 60% that US markets are now in a bear market. On average, they have declined a further 11-14% from here over a 4-6-month period following such signals.
Yesterday, I received an update from the same organisation!!
Economic Backdrop Remains Supportive for US Equities: As we near the end of first quarter earnings season, it is clear that Trump’s tax cuts have given a boost to earnings, with reported earnings for the S&P500 running at a record 25.7% year on year. However, revenue growth, which does not reflect the tax cuts, is up 8.4% and is close to reaching the highest level of growth achieved by the S&P500 since the end of the financial crisis. The recent volatility and sell-off in equity markets seems to indicate a shift in investor’s focus away from the fundamentals as they seek to identify the next trigger that will send equity markets lower. But, this first quarter revenue growth serves as a reminder to investors that fundamentally the economic backdrop remains positive.
So - I think the position is pretty clear.
2 weeks ago, this landed in my inbox......
A Rare ‘Sell’ Signal on US Equity Markets: Trying to time markets isn’t a strategy we adopt but we do like to understand when the market appears to be moving from bull market conditions to bear market conditions and vice versa. The 120-year old technical indicator we follow, Dow Theory recently gave a ‘Sell’ signal on the US equity markets, raising the probability to about 60% that US markets are now in a bear market. On average, they have declined a further 11-14% from here over a 4-6-month period following such signals.
Yesterday, I received an update from the same organisation!!
Economic Backdrop Remains Supportive for US Equities: As we near the end of first quarter earnings season, it is clear that Trump’s tax cuts have given a boost to earnings, with reported earnings for the S&P500 running at a record 25.7% year on year. However, revenue growth, which does not reflect the tax cuts, is up 8.4% and is close to reaching the highest level of growth achieved by the S&P500 since the end of the financial crisis. The recent volatility and sell-off in equity markets seems to indicate a shift in investor’s focus away from the fundamentals as they seek to identify the next trigger that will send equity markets lower. But, this first quarter revenue growth serves as a reminder to investors that fundamentally the economic backdrop remains positive.
So - I think the position is pretty clear.
Definitely? But when... and when to sell equities and when to buy back again, that is the question you should answer if you are so certain. Also why sell when the corporation tax has been cut for US based companies, surely this is going to boost EPS?
moneymakeover
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What a load of codswallop
Talk about a U turn
I get these as well
gillenmarkets
What a load of rubbish
Steven Barrett
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Of course there's going to be a stock market crash, there has to be, markets can't always go one way. If you sailed a boat across the Atlantic, you wouldn't expect calm seas all the time.
You should keep doing what you are doing and not lose focus on what you long term goal is. Moving in and out of assets will lose you money in the long run. You may get lucky with your timing a few times but overall, you will miss out on growth by being out of the market.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
So are you saying hold equities regardless?
Steven Barrett
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No, I am saying that you shouldn't let volatility or a crash in the short term alter your long term strategy.
If you have a need for funds in the short term, you shouldn't be in equities anyway. If you don't have a need for the money for a number of years and are already in equities, there is no need to change that plan. Equity markets fall as well as rise. You can't have one without the other. Trying to just get the upside and no downside is market timing and will end in losing money.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
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.
moneymakeover
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What you're saying makes sense
But I think it's still timing the market
But I think it's still timing the market
It is to an extent but I don’t agree with the theory that you put your equities into one fund and then forget about it. I think you are missing an opportunity. Pensions are generally lazy because they will generally track an index. Even so called active managers will do that. However, there are times when I simply don’t want to be 100% in equities for a period of time. I got out of equities at the end of last year. Simply couldn’t understand the valuations considering the political noise. Got back in after the correction. Didn’t get out at the top or back in at the bottom but I did well out of it. Now I want to get again for the same reason but am reluctant to another switch so close because it does look like trying to time the market. I probably shouldn’t have gone back in after the correction so maybe you are right. I am just trying to time the market. Only thing is I refuse to pay for a switch and have three free a year so I am limited!!
Gordon Gekko
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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.
You are highly likely to end up materially less well-off as a result of your approach.
Why? I have been doing this for the last 15 years and has worked out I am not talking about daily, monthly or even annual trading. Like I say, I have gone nearly 4 years without touching my fund. I also never stop investing in equities. All contributions and a significant % of my fund will remain in equities. BUT. If i don’t like the macro climate, I will move a sizable percentage to a more defensive fund (not cash). I am not trying to see if equities are undervalued or overvalued. I am simply moving into a defensive view if I think it is appropriate.
Gordon Gekko
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What have your returns been?
The annualised return of the equity fund I am in for a 10 year period is 6% if I did nothing. I am seeing annualized returns of over 10% for the same period. On a 5 year period, I am more aligned with the fund but still outperforming as I didn’t have any reason to switch as much in recent years. Changing again though.