Just how far can Covid 19 drive down the markets?

[ecksjay]

Cogcog said:

I had sat on the proceeds of a house sale since Octobr waiting to see what happened with Brexit. Between COvid-19, Btexit and the Eurozone loking shaky I may just spend it on coke and hookers.

....need any company with that ??

[dmahon]

Rather than mess up the board I’ll ask here.

Made up numbers but say you have a 50k capital gain so owe 10k capital gains tax.

Then you lose 10k in the markets later in a taxable account.

Does that wipe out your capital gains liability?

Or do you pay 50k - 10K net gain = 20% of 40k = 8k tax?

Wondering how depressed to feel today!

[drmotorsport]

Just remember that for every panic sale there is a buyer who sees an opportunity. This is a great time to invest if only I had the cash!

[anonymous-user]

dmahon said:

... say you have a 50k capital gain so owe 10k capital gains tax.

Then you lose 10k in the markets later in a taxable account.

Does that wipe out your capital gains liability?

It can, but only if you also sell the investment that suffered the £10k loss.

IF you crystallise £10k of taxable gain and £10k of loss in the same tax year your net taxable gain is zero - so no tax payable. However, you would still need to submit a CGT tax return if the total proceeds of sale exceeded £48k.

IF your losses are bigger than your gains (NB that's all of your gains, not just your taxable gains) the excess loss can be carried forward for use in future years. However, the loss must be "claimed" in the year you incur it - again by completing a tax return even though no tax is payable.

You can't carry over any unused annual tax free allowance to future years.

[anonymous-user]

Note: If people are sitting on thumping losses as a result of market falls one possibility is to consider crystallising those losses. The losses can then be carried forward for use against future taxable gains. Yes, it's a zero sum game but can be very useful if you value future flexibility as to what you sell and when. In other words, it can avoid the future situation of wanting to sell a particular investment but being reluctant to do so because it would trigger a CGT liability.

i.e. You sell the investment you want to sell and make, say, a taxable capital gain of £20k. However, you won't pay any tax on that because you can deal with the liability by allocating against it some of the past losses you are carrying forward.

[ColdoRS]

Can anyone better read on finance than I, give their opinion on whether I should continue dripping a monthly sum into my S&P500 tracker fund, which has obviously taken a hit recently... or get out now and hold he cash in the bank, until the market is smoother?

I’m looking 10+ years ahead with this investment so I’m leaning towards continuing to buy every month and capitalise long term. Foolish? First time I’ve had to think much about my investment so not sure how to play it.

[bitchstewie]

ColdoRS said:

Can anyone better read on finance than I, give their opinion on whether I should continue dripping a monthly sum into my S&P500 tracker fund, which has obviously taken a hit recently... or get out now and hold he cash in the bank, until the market is smoother?

I’m looking 10+ years ahead with this investment so I’m leaning towards continuing to buy every month and capitalise long term. Foolish? First time I’ve had to think much about my investment so not sure how to play it.

Well as of today you're basically buying things that are on sale with 10% off.

The dilemma is whether tomorrow will they be on sale with 20% off or only 5% off?

Tough one but as a monthly drip feed I'm sure I'd be carrying on.

A lump sum less sure because of the dilemma above.

[Ayahuasca]

ColdoRS said:

Can anyone better read on finance than I, give their opinion on whether I should continue dripping a monthly sum into my S&P500 tracker fund, which has obviously taken a hit recently... or get out now and hold he cash in the bank, until the market is smoother?

I’m looking 10+ years ahead with this investment so I’m leaning towards continuing to buy every month and capitalise long term. Foolish? First time I’ve had to think much about my investment so not sure how to play it.

If you are going to be buying hamburgers for the next ten years, do you want the price of beef to go up or down?

It is not a tough call at all.

[craig1912]

ColdoRS said:

Can anyone better read on finance than I, give their opinion on whether I should continue dripping a monthly sum into my S&P500 tracker fund, which has obviously taken a hit recently... or get out now and hold he cash in the bank, until the market is smoother?

I’m looking 10+ years ahead with this investment so I’m leaning towards continuing to buy every month and capitalise long term. Foolish? First time I’ve had to think much about my investment so not sure how to play it.

Why foolish?? Just keep doing what you’ve been doing, you are buying more with your monthly amount and over a 10 year period you will be better off. Even if you did sell you don’t know when to buy in again and most people will buy in well above the bottom, so lose that growth.

[DonkeyApple]

bhstewie said:

ColdoRS said:

Can anyone better read on finance than I, give their opinion on whether I should continue dripping a monthly sum into my S&P500 tracker fund, which has obviously taken a hit recently... or get out now and hold he cash in the bank, until the market is smoother?

I’m looking 10+ years ahead with this investment so I’m leaning towards continuing to buy every month and capitalise long term. Foolish? First time I’ve had to think much about my investment so not sure how to play it.

Well as of today you're basically buying things that are on sale with 10% off.

The dilemma is whether tomorrow will they be on sale with 20% off or only 5% off?

Tough one but as a monthly drip feed I'm sure I'd be carrying on.

A lump sum less sure because of the dilemma above.

I’d tend to agree. If you’re currently investment strategy is buying units each month then that strategy is precisely built around events such as this and arguably you need to keep on for the benefits to deliver. All you’d do is double check that the units you’re buying are still valid in the new market. Ie the reason for choosing them back when you did still remain.

If lump summing then there is little argument to start today but rather wait until this phase of the market is over and it’s blatantly obvious that we are are in next phase. This point is usually pretty well confirmed by being when you start kicking yourself for not buying earlier and being a millionaire by now.

Re the 10% cheaper quip, I do t agree with that but prefer to think instead that everything is still potentially 50% over priced. . It’s a bear market rather than a bull market currently so we are in the process of emptying that metaphorical half full glass rather than filling it.

[anonymous-user]

DonkeyApple said:

….prefer to think instead that everything is still potentially 50% over priced. . It’s a bear market rather than a bull market currently so we are in the process of emptying that metaphorical half full glass rather than filling it.

That's a very real possibility. Hence my caution.

FTSE 100 dropped 13% from 7,500 to 6,500 in just two weeks and the underlying problem seems to be still accelerating. Hold tight for the ride!

For those who enjoy their arithmetic, we'd need 15.5% growth just to get back where we started.

[Ayahuasca]

Hopefully the price of a decent air cooled 911 will come down too.

[2Btoo]

I came into Finance just to post a thread very like this one, and am replying to see what everyone has to say.

Thanks Cogcog for starting it.

[95JO]

Luckily my S&S LISA holding were depleted late last year for my mortgage deposit otherwise I would've been crying right now I bet! I originally planned on buying within the next couple of months, weird how things work out!

I've just started a new DD with a Vanguard S&S ISA in to their LS100, so I think I'll be making a few one-off payments in the coming days/weeks whilst everything is on a bit of (overdramatic IMO) downward spiral...

[95JO]

Although, I must add that seeing my pension fund drop 8% has been pretty grim viewing.

Oh well, 30+ years to go

[rigga]

Was hoping to retire in august, projected figures a month ago looked feasible, might need to delay that .....

[Ayahuasca]

Sold another load of investments today.

[gazza5]

Wish I had sold some things, I have a small investment portfolio, I was happy on Friday as I cracked £3k paper profit, thats been short lived.

I am in it for th elong haul, but even in my short time of investing, I haven't sold when I should of, and I haven't bought when I should of, but even so (before this week) I had still made money drip feeding money in every month.

I only invest £200 a month, so I am in no way a big player, and being 36, got a while yet till retirement etc, so hoping to continue with the £200 a month, any spare cash try and invest it.

Biggest risk now everyone has started talking about recession (although this was talked about last year, and year before).

This is certainly different to the sell off that happened end of 2018 in america. I see this as long term, but I just know if I sold now, they would probably find a drug over the weekend that cures it! Thats just my luck!

[soupdragon1]

Just sitting riding out the storm rather than trying to time the market. The difficult part isn't deciding when to sell, its deciding when to buy back in.

Hints of recovery appear.....but is it just a bounce?

Phew, it was just a bounce. Bullet dodged.

Another hint of recovery, climbing higher than the last bounce....is this the peak before another drop?

And so on and so on....

[Simpo Two]

soupdragon1 said:

Just sitting riding out the storm rather than trying to time the market. The difficult part isn't deciding when to sell, its deciding when to buy back in.

Hints of recovery appear.....but is it just a bounce?

Phew, it was just a bounce. Bullet dodged.

Another hint of recovery, climbing higher than the last bounce....is this the peak before another drop?

And so on and so on....

As long as you buy at less than you sold for, logic decrees you must be ahead of where you would have been had you done nothing. Of course you may still lose, but you will not have lost so much.

I think that's right