Whoa! ISA plummets
Discussion
Long horizon invest for dividends. Capital gain is a bonus.
I don't have a big enough fund to worry about it too much and only look once in a while -to avoid over trading.
If I had £200k+ in it, I'd be more concerned.
If I took a £25k hit and sold into cash the day before the markets righted themselves, I'd probably not be too happy. But at least the cash buys a lot of tin foil, tinned food, water and ammunition.
I don't have a big enough fund to worry about it too much and only look once in a while -to avoid over trading.
If I had £200k+ in it, I'd be more concerned.
If I took a £25k hit and sold into cash the day before the markets righted themselves, I'd probably not be too happy. But at least the cash buys a lot of tin foil, tinned food, water and ammunition.
Ginge R said:
The people I feel sorry for, are those who have stopped earning fresh money and who are actually relying everyday, on their pension fund to live off. If they were in higher risk funds, sequential return risk means they'll have incurred losses they will probably never recoup.
Every single market fall in the last century has subsequently recovered over the course of a few years. Why should this one be any different?Translated for ordinary humans, sequential return risk simply means that it's harder for a "pot" to recover if you are spending from it day-to-day. But with the typical retiree now having a life expectancy around 25 years I think they'd have to be crackers to give up on risk investments. Take for example 2009 when "the end of the world was nigh" and the market fell to 4000. The market has even today substantially recovered at 6000 (compared with the 7000 high) and anyone who invested in 2009 is sitting on a 50% capital gain as well as having received a nice 6 years of income.
Don't panic.
Neil Woodford said:
The past few weeks in global financial markets has been just such a time. It appears that investors everywhere are dramatically rebasing expectations. The principal trigger for this market rout has been the combination of weak macro data from China along with the precipitous fall in Chinese equity prices, which has confounded the authorities’ increasingly clumsy and apparently desperate attempts to stabilise the market.
Regular readers of our blog will not have been surprised by either of these events. We have spoken about the equity market correction in China, which started in earnest in June and have been commenting on the weak China growth story for more than a year. Indeed, the strategy I have pursued since June last year has emphasised the weak global economic backdrop, led by slowing growth in China and its impact on global commodity prices.
I say this now to remind investors that these events, which triggered yesterday’s global equity panic have been embedded in the expectations that we have in place for the stocks we have chosen to invest in – and indeed those that we have chosen not to.
Consequently, little that we have seen recently with respect to macro fundamentals has come as a surprise, including today’s policy response in China (lower rates and more liquidity) or for that matter Renminbi devaluation.
We remain cautious of the global growth outlook and, on balance, believe that interest rate increases, both in the US and here in the UK, are further off than consensus has hitherto believed. Weak global growth and productivity, deflation and excessive debt remain our principal concerns.
With respect to the UK, where growth has been comparatively strong globally, we worry about the unbalanced nature of that growth (disproportionately led by consumer spending, which is reflected in the disastrous balance of payment deficits in recent history).
At the corporate level, we have also commented on the dangers posed by the gap between equity valuations (inflated by QE) and economic fundamentals. This is especially relevant because of the weak earnings backdrop.
We will continue to focus on businesses that do not need a broad economic revival to meet expectations but, as always, we will also look for opportunities in areas of the market where the falls have been heaviest and where we may not already be exposed.
It is always difficult to remain focused on fundamentals when markets fall dramatically. The distraction of seeing share prices fall indiscriminately can be overwhelming and distort rational perspectives. At times like this, having a few grey hairs helps, as does reminding yourself of Kipling’s timeless adage.
Regular readers of our blog will not have been surprised by either of these events. We have spoken about the equity market correction in China, which started in earnest in June and have been commenting on the weak China growth story for more than a year. Indeed, the strategy I have pursued since June last year has emphasised the weak global economic backdrop, led by slowing growth in China and its impact on global commodity prices.
I say this now to remind investors that these events, which triggered yesterday’s global equity panic have been embedded in the expectations that we have in place for the stocks we have chosen to invest in – and indeed those that we have chosen not to.
Consequently, little that we have seen recently with respect to macro fundamentals has come as a surprise, including today’s policy response in China (lower rates and more liquidity) or for that matter Renminbi devaluation.
We remain cautious of the global growth outlook and, on balance, believe that interest rate increases, both in the US and here in the UK, are further off than consensus has hitherto believed. Weak global growth and productivity, deflation and excessive debt remain our principal concerns.
With respect to the UK, where growth has been comparatively strong globally, we worry about the unbalanced nature of that growth (disproportionately led by consumer spending, which is reflected in the disastrous balance of payment deficits in recent history).
At the corporate level, we have also commented on the dangers posed by the gap between equity valuations (inflated by QE) and economic fundamentals. This is especially relevant because of the weak earnings backdrop.
We will continue to focus on businesses that do not need a broad economic revival to meet expectations but, as always, we will also look for opportunities in areas of the market where the falls have been heaviest and where we may not already be exposed.
It is always difficult to remain focused on fundamentals when markets fall dramatically. The distraction of seeing share prices fall indiscriminately can be overwhelming and distort rational perspectives. At times like this, having a few grey hairs helps, as does reminding yourself of Kipling’s timeless adage.
bad company said:
blindswelledrat said:
Soov535 said:
I've just sold my entire holding of Funds in my SIPP.
I'm going to sit on cash for a while.
Oops. About £15k that decision cost you?I'm going to sit on cash for a while.
Sorry
Edited by twinturboz on Tuesday 25th August 17:31
twinturboz said:
Based on one day? If this is the start of a major 40-60% crash then that will be a cracking decision.
Based on what is happening.The market may well slide again tomorrow and/or the next few days and weeks, it is a bit of a rollercoaster at the moment.
For me the clever thing to do is to sit tight and hold on OR to drip feed money into the market.
I did ask earlier.
I have a Neil Woodford fund bought in April. Was doing very well but all the gains have now been lost and I now have less than I put in.
I realise it should do well in the long term but as his quote above speaks about fully expecting the China crash, how come I've just lost a load of money.
Do the managers continue to look after these funds after they are bought or do they just invest your money at the beginning and then just leave it?
I have a Neil Woodford fund bought in April. Was doing very well but all the gains have now been lost and I now have less than I put in.
I realise it should do well in the long term but as his quote above speaks about fully expecting the China crash, how come I've just lost a load of money.
Do the managers continue to look after these funds after they are bought or do they just invest your money at the beginning and then just leave it?
croyde said:
I did ask earlier.
I have a Neil Woodford fund bought in April. Was doing very well but all the gains have now been lost and I now have less than I put in.
I realise it should do well in the long term but as his quote above speaks about fully expecting the China crash, how come I've just lost a load of money.
Do the managers continue to look after these funds after they are bought or do they just invest your money at the beginning and then just leave it?
When you buy into a fund you are buying a slice of a pie. Neil manages the the evolving ingredients of the whole pie and the owners of the slices all benefit or lose together. I have a Neil Woodford fund bought in April. Was doing very well but all the gains have now been lost and I now have less than I put in.
I realise it should do well in the long term but as his quote above speaks about fully expecting the China crash, how come I've just lost a load of money.
Do the managers continue to look after these funds after they are bought or do they just invest your money at the beginning and then just leave it?
croyde said:
I did ask earlier.
Do the managers continue to look after these funds after they are bought or do they just invest your money at the beginning and then just leave it?
What they do is take your money, then they read a bit about how Shell has been around for ages and how Glaxo makes pills for old people.Do the managers continue to look after these funds after they are bought or do they just invest your money at the beginning and then just leave it?
So they buy a bit of those.
Then they f
k off on holiday forever. /sOf course they actively manage the fund.
That is why they are called ACTIVELY MANAGED FUNDS.
Active.
Managed.
The tin - it does what is written on it.
The point about his quote above is simply that he has tried to invest in businesses that aren't exposed to the weaknesses that have caused the recent turmoil since he saw those weaknesses a while ago.
So while the whole market is down - so he is down, his picks should outperform.
walm said:
So while the whole market is down - so he is down, his picks should outperform.
And that is one of the biggest cons of the entire industry - outperform the market. So if the market is off 20% and you are only down 10% then you did "well". I'd prefer totally discretionary funds where they can go short or write/sell options against the position and try and MAKE money in ANY market, not just outperform.That's what I'd pay my management fee for, spotting the market weaknesses and doing something about it in advance to capitalise on it, not just pick stocks that don't get hit as hard by it.
And for who was asking about Woodford above, I read a good article this weekend about how he just has great marketing and over the last 15 years he is actually only about the 10th in the list of UK fund managers but he is probably the best known. Power of PR.....
R11ysf said:
And that is one of the biggest cons of the entire industry - outperform the market. So if the market is off 20% and you are only down 10% then you did "well". I'd prefer totally discretionary funds where they can go short or write/sell options against the position and try and MAKE money in ANY market, not just outperform.
That's what I'd pay my management fee for, spotting the market weaknesses and doing something about it in advance to capitalise on it, not just pick stocks that don't get hit as hard by it.
You just described the entire genesis of the hedge fund.That's what I'd pay my management fee for, spotting the market weaknesses and doing something about it in advance to capitalise on it, not just pick stocks that don't get hit as hard by it.
walm said:
R11ysf said:
And that is one of the biggest cons of the entire industry - outperform the market. So if the market is off 20% and you are only down 10% then you did "well". I'd prefer totally discretionary funds where they can go short or write/sell options against the position and try and MAKE money in ANY market, not just outperform.
That's what I'd pay my management fee for, spotting the market weaknesses and doing something about it in advance to capitalise on it, not just pick stocks that don't get hit as hard by it.
You just described the entire genesis of the hedge fund.That's what I'd pay my management fee for, spotting the market weaknesses and doing something about it in advance to capitalise on it, not just pick stocks that don't get hit as hard by it.
bad company said:
Based on what is happening.
The market may well slide again tomorrow and/or the next few days and weeks, it is a bit of a rollercoaster at the moment.
For me the clever thing to do is to sit tight and hold on OR to drip feed money into the market.
Which is fair enough, not sure I subscribe to the whole sit it out wait and see though, depends very much what your invested in. A major move down could well wipe out companies your invested in. The market may well slide again tomorrow and/or the next few days and weeks, it is a bit of a rollercoaster at the moment.
For me the clever thing to do is to sit tight and hold on OR to drip feed money into the market.
Take a look at some of the banking stocks, top of my head say Barclays, pretty sure the share price still hasn't recovered back to pre 2008 levels (taking into account all the rights issues etc). In that situation is the strategy of drip feeding or holding all the way down from 700 to 64p the wise one or would you rather have gone to cash at the signs of market weakness.
Don't get me wrong timing the market exactly is near impossible, but sometimes sitting there and just waiting isn't necessarily the right strategy either.
twinturboz said:
Which is fair enough, not sure I subscribe to the whole sit it out wait and see though, depends very much what your invested in. A major move down could well wipe out companies your invested in.
Take a look at some of the banking stocks, top of my head say Barclays, pretty sure the share price still hasn't recovered back to pre 2008 levels (taking into account all the rights issues etc). In that situation is the strategy of drip feeding or holding all the way down from 700 to 64p the wise one or would you rather have gone to cash at the signs of market weakness.
Don't get me wrong timing the market exactly is near impossible, but sometimes sitting there and just waiting isn't necessarily the right strategy either.
Yeah I agree with you. Just saying it's not time to panic sell & exit the market. We all buy & sell along the way.Take a look at some of the banking stocks, top of my head say Barclays, pretty sure the share price still hasn't recovered back to pre 2008 levels (taking into account all the rights issues etc). In that situation is the strategy of drip feeding or holding all the way down from 700 to 64p the wise one or would you rather have gone to cash at the signs of market weakness.
Don't get me wrong timing the market exactly is near impossible, but sometimes sitting there and just waiting isn't necessarily the right strategy either.
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