Is it me but does the Funds market look a bit frothy

[mikeiow]

Phooey said:

Personally I think I'd be looking to bang that cash back in now..

& herein lies the problem of 'timing the market'.
You could be right.
Or you could be very wrong - we could drop a further 5/10/20%+

If anyone here knows......I've got news....you don't !

[Sheepshanks]

mikeiow said:

If anyone here knows......I've got news....you don't !

The markets have an annoying habit of doing the opposite to what you expect!

[anonymous-user]

Phooey said:

Personally I think I'd be looking to bang that cash back in now..

Are you buying vigorously today on this excellent opportunity?

I remain with 98elise at present. With substantial advantage already in hand there's no need to try to buy at the bottom - and it seems unlikely markets will spike upwards while the geographic scope of this virus is still expanding. The economic impact, if any, may take many months to be understood.

I don't think it's a matter of timing the markets. It's about looking out the window to see if it's still raining.

[98elise]

rockin said:

Phooey said:

Personally I think I'd be looking to bang that cash back in now..

Are you buying vigorously today on this excellent opportunity?

I remain with 98elise at present. With substantial advantage already in hand there's no need to try to buy at the bottom - and it seems unlikely markets will spike upwards while the geographic scope of this virus is still expanding. The economic impact, if any, may take many months to be understood.

I don't think it's a matter of timing the markets. It's about looking out the window to see if it's still raining.

Yup.

The simple question is do you think it's likely we will see more, or less people/countries affected, and what will that do to the markets?

I suspect more people and countries, and the markets will fall further.

I'm not looking to buy at the bottom, I'm just looking to limit my potential for losses. The paper losses on my remaining funds are still pretty substantial, but it would be far worse if I'd not taken the precaution before the weekend.

[anonymous-user]

As I said in a previous thread, anything I decide to invest in has a tendency to tank the next week. Guess who setup a Vanguard account and invested in Life strategy 80 and 100 two weeks ago!

Traditionally, the second I sell up the market will rebound but I am in this for the long haul so I am sitting tight for now. I have left the direct debit ticking over but I am not going to invest any lump sums for now.

I assume that anyone who has a large pension pot and was looking to retire in the next few months has potentially lost a significant percentage?

[NickCQ]

Joey Deacon said:

I assume that anyone who has a large pension pot and was looking to retire in the next few months has potentially lost a significant percentage?

That's why the standard advice is to reduce your % allocation to equities as you approach retirement.
100 - [your age] is a good rule of thumb, so at normal retirement age only 35% equities allocation. Still painful but survive-able

[mikeiow]

Joey Deacon said:

As I said in a previous thread, anything I decide to invest in has a tendency to tank the next week. Guess who setup a Vanguard account and invested in Life strategy 80 and 100 two weeks ago!

Traditionally, the second I sell up the market will rebound but I am in this for the long haul so I am sitting tight for now. I have left the direct debit ticking over but I am not going to invest any lump sums for now.

I assume that anyone who has a large pension pot and was looking to retire in the next few months has potentially lost a significant percentage?

Oh, go on: sell, then the rest of us can continue back up ;-)

On that last point: yes, there is a thing called "sequencing of returns risk" - plenty of examples to google, one at https://www.thebalance.com/how-sequence-risk-affec...
You essentially don't want to be drawing down on that pension if it has taken an early dip.
The key appears to be in having enough cash resources to ride out any downturn. Which could be combined with a "tightening belts" approach to discretionary spending.
Of course, that downturn might be 3 months as it was 18 months back....or could last 1 or 2 years. Maybe more!

My *personal* view is that the current virus situation will likely worsen some more. All kinds of global supply chains are being affected that will lead to many companies making revised (downward!) messages to stockholders & the market, perhaps for many months.
That said....I also believe we will pull back out of it, and markets will pick up. I'm an optimist about things...which an investor ought to be, perhaps ;-)

In my case (being close to that point of retirement!), I have 'less risky' bonds/gilts/fixed interest options now covering 50% of my retirement DC pot.
Still have 50% in World/US equities, which I appreciate could dip further.
Time will tell how this approach works!

[Phooey]

rockin said:

Are you buying vigorously today on this excellent opportunity?

Yes. Although more as a result of a transfer from Standard Life to IM (currently sitting in cash waiting for BACS to clear). I could leave it in cash if I really wanted too but once cleared it's going straight into IM funds. I did also put some extra £ into Vanguard FTSE 100 and LS80/100 over Sunday and Monday but this was really trying to make the most of what is left of this years ISA allowance/s.

My (gut) feeling is within a few weeks the markets will have risen from today's point. I accept I could also be wrong, but I'm more uncomfortable being in cash than funds at this present moment in time.

[bmwmike]

NickCQ said:

That's why the standard advice is to reduce your % allocation to equities as you approach retirement.
100 - [your age] is a good rule of thumb, so at normal retirement age only 35% equities allocation. Still painful but survive-able

I'm 44 and a half, so I should only be 65.5% equities and the rest in cash? Or does the rule kick in x years from retirement?thx

[NickCQ]

bmwmike said:

NickCQ said:

That's why the standard advice is to reduce your % allocation to equities as you approach retirement.
100 - [your age] is a good rule of thumb, so at normal retirement age only 35% equities allocation. Still painful but survive-able

I'm 44 and a half, so I should only be 65.5% equities and the rest in cash? Or does the rule kick in x years from retirement?thx

I've always heard it expressed based on age, assuming you aren't retiring early / late.
Not a financial advisor myself but FWIW I'm 27 and probably 80% in equities (excluding my flat).

[98elise]

Phooey said:

rockin said:

Are you buying vigorously today on this excellent opportunity?

Yes. Although more as a result of a transfer from Standard Life to IM (currently sitting in cash waiting for BACS to clear). I could leave it in cash if I really wanted too but once cleared it's going straight into IM funds. I did also put some extra £ into Vanguard FTSE 100 and LS80/100 over Sunday and Monday but this was really trying to make the most of what is left of this years ISA allowance/s.

My (gut) feeling is within a few weeks the markets will have risen from today's point. I accept I could also be wrong, but I'm more uncomfortable being in cash than funds at this present moment in time.

Easy jet is with a punt if you're brave! 30% down over the past few days (1500 down to nearly 1000). Potential upside of 50% if this comes to nothing.

DYOR though...

[Phooey]

98elise said:

Easy jet is with a punt if you're brave! 30% down over the past few days (1500 down to nearly 1000). Potential upside of 50% if this comes to nothing.

DYOR though...

I'm neither brave or educated enough for individual shares - I just know very little about them or their companies tbh - and I firmly believe (as per the saying?) if you can't scribble down on a piece of paper what and why you chose them shares then you shouldn't be in them. I take my hat off to those who do their homework and make it work, but no, I'm sticking mainly to ETFs / passives / funds etc (if that's what you call them )

[Enut]

NickCQ said:

bmwmike said:

NickCQ said:

That's why the standard advice is to reduce your % allocation to equities as you approach retirement.
100 - [your age] is a good rule of thumb, so at normal retirement age only 35% equities allocation. Still painful but survive-able

I'm 44 and a half, so I should only be 65.5% equities and the rest in cash? Or does the rule kick in x years from retirement?thx

I've always heard it expressed based on age, assuming you aren't retiring early / late.
Not a financial advisor myself but FWIW I'm 27 and probably 80% in equities (excluding my flat).

The 'lifestyling' approach i.e. moving pension funds from equities into more fixed interest/cash holdings in the years leading up to retirement used to be more suitable when you were going to buy an annuity at retirement. With annuity rates being very low at the moment and the advent of 'pension flexibility' I would say that the vast majority of people approaching retirement are not buying annuities. If you are staying invested and intending to draw an income from you pension fund then transferring into more cautious assets is probably not needed or advisable as long as you are investing in assets that are suitable for your attitude to risk/capacity for loss etc.

[NickCQ]

Enut said:

The 'lifestyling' approach i.e. moving pension funds from equities into more fixed interest/cash holdings in the years leading up to retirement used to be more suitable when you were going to buy an annuity at retirement. With annuity rates being very low at the moment and the advent of 'pension flexibility' I would say that the vast majority of people approaching retirement are not buying annuities.

If you are staying invested and intending to draw an income from you pension fund then transferring into more cautious assets is probably not needed or advisable as long as you are investing in assets that are suitable for your attitude to risk/capacity for loss etc.

As you say, it's a personal choice.
I hope to have enough invested by the time of retirement to sustain my desired lifestyle at c. 3% withdrawal, invested in pretty safe fixed income assets.

[anonymous-user]

Phooey said:

98elise said:

Easy jet is with a punt if you're brave! 30% down over the past few days (1500 down to nearly 1000). Potential upside of 50% if this comes to nothing. DYOR though...

I'm neither brave or educated enough for individual shares - I just know very little about them or their companies tbh - and I firmly believe (as per the saying?) if you can't scribble down on a piece of paper what and why you chose them shares then you shouldn't be in them. I'm sticking mainly to ETFs / passives / funds etc

I think there's one or two of us in the same club as you. As I'm not an indexer I accept the need to pay others to do the research.

Well done with the buying. You have the absolute satisfaction of knowing that whatever happens, you weren't getting in at the top. I have a lot of time for anyone who puts their money where their mouth is. (Unlike so much of the armchair twaddle we see on the internet.)

[LeoSayer]

Well I took the opportunity to invest some cash that's been sitting in my ISA for over a year.

It's going into a Global Index ex-UK tracker and will be a long-term investment.

[irc]

Putting it in perspective I stuck £10k in a Vanguard Life 80 fund in Nov 2018. Even after the recent market fall I'm still roughly 10% up from where it would have been in a cash savings A/C

I had a bit of good fortune in that I cashed out of a £10.5k L&G ISA last Thursday. Got the Friday price and missed the market drop.

Keeping some as cash for possible holiday in October. Nothing booked yet until I see how the virus thing affects travel a few months on.

The rest going into a Vanguard. Just got to think if I do it as lump sum or spead it over a few months.

My view is that medium term 3 to 5 years from now the markets will be higher so may as well stay invested.

[Budflicker]

98elise said:

Easy jet is with a punt if you're brave! 30% down over the past few days (1500 down to nearly 1000). Potential upside of 50% if this comes to nothing.

DYOR though...

Or this gets worse as we go on and they go to 100?

Let's see in a month he.

[churchie2856]

bmwmike said:

NickCQ said:

That's why the standard advice is to reduce your % allocation to equities as you approach retirement.
100 - [your age] is a good rule of thumb, so at normal retirement age only 35% equities allocation. Still painful but survive-able

I'm 44 and a half, so I should only be 65.5% equities and the rest in cash? Or does the rule kick in x years from retirement?thx

100 - 44.5 = 55.5, not 65.5%

[bmwmike]

churchie2856 said:

100 - 44.5 = 55.5, not 65.5%

Gawd I feel old now then thanks for that