FTSE - WTF IS Going On ??
Discussion
I kind of understood last weeks falls but another big drop today means nearly 7.5% down in the last month.
Anybody care to speculate on where the bottom of this fall will be and when it will come?
I'm thinking it's time to buy albeit cautiously but I've been wrong lots of times before.
Anybody care to speculate on where the bottom of this fall will be and when it will come?
I'm thinking it's time to buy albeit cautiously but I've been wrong lots of times before.
This year has seen almost unprecedented volatility in the markets. You might get a FTSE tracker for next to sod all and it might faithfully follow the markets but let's not confuse investing with getting a handle on some of the basics of investing, such as diversification and establishing capacity for loss.
Market sentiment is low, some are waiting for the right time to get back in, and this morning's PMI Eurozone data shows that it is becoming harder for Merkel to resist some form of meaningful QE. There are so many factors bubbling along, but just because the market is low, it doesn't mean things are bad. Unles of course, you planned to cash out of that FTSE tracker tomorrow.
Market sentiment is low, some are waiting for the right time to get back in, and this morning's PMI Eurozone data shows that it is becoming harder for Merkel to resist some form of meaningful QE. There are so many factors bubbling along, but just because the market is low, it doesn't mean things are bad. Unles of course, you planned to cash out of that FTSE tracker tomorrow.
Ginge R said:
This year has seen almost unprecedented volatility in the markets. You might get a FTSE tracker for next to sod all and it might faithfully follow the markets but let's not confuse investing with getting a handle on some of the basics of investing, such as diversification and establishing capacity for loss.
Market sentiment is low, some are waiting for the right time to get back in, and this morning's PMI Eurozone data shows that it is becoming harder for Merkel to resist some form of meaningful QE. There are so many factors bubbling along, but just because the market is low, it doesn't mean things are bad. Unles of course, you planned to cash out of that FTSE tracker tomorrow.
I think that "volatility" is the underlying problem for the average investor.Market sentiment is low, some are waiting for the right time to get back in, and this morning's PMI Eurozone data shows that it is becoming harder for Merkel to resist some form of meaningful QE. There are so many factors bubbling along, but just because the market is low, it doesn't mean things are bad. Unles of course, you planned to cash out of that FTSE tracker tomorrow.
The institutions win on both falling and rising markets; they are no longer interested in long term capital growth. It is all about fast buck returns to the detriment of the saver trying to utilise lower-risk collective investments for retirement funds etc.
Looking better now, until tomorrow when it'll probably carry on going down.
Is it reasonable to think a market that has risen 10% average year on year for over half a decade will continue to do so after reaching a period of volatility?
I'm not sure, but I think it's more likely it'll go down than go up in the short term.
Dave
Is it reasonable to think a market that has risen 10% average year on year for over half a decade will continue to do so after reaching a period of volatility?
I'm not sure, but I think it's more likely it'll go down than go up in the short term.
Dave
Derek,
I wasn't so much using VIX, rather SD, Beta, R-Squared etc.
I did suggest 'almost' because of 2008/1987 etc although I confess that I wasn't ready to be as surprised as I was by the difference when I looked back just now. Compared to that latter period we're almost becalmed - good point well made.
I wasn't so much using VIX, rather SD, Beta, R-Squared etc.
I did suggest 'almost' because of 2008/1987 etc although I confess that I wasn't ready to be as surprised as I was by the difference when I looked back just now. Compared to that latter period we're almost becalmed - good point well made.
Ginge R said:
Unles of course, you planned to cash out of that FTSE tracker tomorrow.
That's the important thing. If you're in for the medium or long term it doesn't make a great deal of difference one way or the other - dividends won't be massively affected in the short term, and so long as this doesn't develop into a more general slump the market will recover. rdjohn said:
I think that "volatility" is the underlying problem for the average investor.
The institutions win on both falling and rising markets; they are no longer interested in long term capital growth. It is all about fast buck returns to the detriment of the saver trying to utilise lower-risk collective investments for retirement funds etc.
It all depends. The institutions win on both falling and rising markets; they are no longer interested in long term capital growth. It is all about fast buck returns to the detriment of the saver trying to utilise lower-risk collective investments for retirement funds etc.
If the market is punchy, you'd probably want funds with high beta (a measure of volatility) which increase your chances of getting ahead. If you anticipate the market to be poor as it is at the moment, you'd want funds with lower beta because they would (in principle) decline less in value than the index. So, a fund with a beta of 0.5 against a FTSE dropping 6%, would be expected to decline only 3%. A higher beta say, one with 1% means the loss would conceivably be the full 6%.
It's all in the spadework and not just a question of looking at the fund name, the returns, the fund assets, the approach or the price etc. Look on it like a 4 cylinder Jap engine needing to be ragged just to stay on the cam, compared to a big fat lazy American V8 which can burble along efficiently with bags of torque and low revs.
Mr Whippy said:
Is it reasonable to think a market that has risen 10% average year on year for over half a decade will continue to do so after reaching a period of volatility?
Dave
...and despite that is only where it was in 1999.Dave
Compare the FTSE to the DJI over the same period.
My opinion is the FTSE is going to see 10k in the next 3 years.
gregf40 said:
Mr Whippy said:
Is it reasonable to think a market that has risen 10% average year on year for over half a decade will continue to do so after reaching a period of volatility?
Dave
...and despite that is only where it was in 1999.Dave
Compare the FTSE to the DJI over the same period.
My opinion is the FTSE is going to see 10k in the next 3 years.
10,000 in 3yrs would be what, about 15% growth per annum year on year.
So definitely sell in 2018 then, because it'll be due a real tank slapper?
Or will it be going up another 15% a year, year on year, for another 3 years by that point?
As per DJI yes it's performed well since QE2 was announced, and from then on it seemed to deviate from the growth rate of the FTSE by quite a margin too.
And on that note, if you look at the value of Apple vs the total Russian stock market value, and think which has more fundamental value? I'm seeing hundreds of mines, factories, gas and oil facilities, financial institutions, manufacturers, etc, or a single company that makes it's money selling telephones and skimming mass media sales.
Personally I thought the FTSE topped back in March, which is when I took my pension from UK equities into cash.
Dave
So definitely sell in 2018 then, because it'll be due a real tank slapper?
Or will it be going up another 15% a year, year on year, for another 3 years by that point?
As per DJI yes it's performed well since QE2 was announced, and from then on it seemed to deviate from the growth rate of the FTSE by quite a margin too.
And on that note, if you look at the value of Apple vs the total Russian stock market value, and think which has more fundamental value? I'm seeing hundreds of mines, factories, gas and oil facilities, financial institutions, manufacturers, etc, or a single company that makes it's money selling telephones and skimming mass media sales.
Personally I thought the FTSE topped back in March, which is when I took my pension from UK equities into cash.
Dave
Edited by Mr Whippy on Wednesday 17th December 00:21
Ginge R said:
Derek,
I wasn't so much using VIX, rather SD, Beta, R-Squared etc.
I did suggest 'almost' because of 2008/1987 etc although I confess that I wasn't ready to be as surprised as I was by the difference when I looked back just now. Compared to that latter period we're almost becalmed - good point well made.
I disagree with the suggestion volatility is "unprecedented" this year - assuming you mean it's highly volatile. I wasn't so much using VIX, rather SD, Beta, R-Squared etc.
I did suggest 'almost' because of 2008/1987 etc although I confess that I wasn't ready to be as surprised as I was by the difference when I looked back just now. Compared to that latter period we're almost becalmed - good point well made.
The Implied Volatility Index gives a good indication. The YTD average is the lowest in some years. The yearly range is also the tightest since 2004.
I would say we've had two periods of high volatility this year. From mid September to mid October, and from the start of December to now. The rest of the year we've been in a 7% range.
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