Just how far can Covid 19 drive down the markets?
Discussion
I pulled a load out this afternoon. Some great returns on halfords, pmo, aml and iag have got me back to pre covid levels more or less.
And my Lloyd's, RBS and aviva stakes have gone up by about 20%.
I am down on pharma stocks, but hoping there are some gains there this month.
I havent sold stocks off completely, but I am now more in cash. I just dont understand how the ftse is where it is. I see another big dip coming, although I'm probably wrong and it will just keep motoring!!
And my Lloyd's, RBS and aviva stakes have gone up by about 20%.
I am down on pharma stocks, but hoping there are some gains there this month.
I havent sold stocks off completely, but I am now more in cash. I just dont understand how the ftse is where it is. I see another big dip coming, although I'm probably wrong and it will just keep motoring!!
Same situation sold off most stock on friday, just hold aa.l
Rally of the lows has served me well bought in on fed money stimulus news and have been active on the what's your big gamble forum...
S&P recovered for the year, nasdaq looking at 10k soon. It's the fiscal and monetary stimulus at work.
Boeing up 50% best month ever and only 8 days in so they were saying on cnbc when orders are down, air travel not likely to be back where it was for many years, max jet issues yet to be resolved and it's only 30% down from high.
Unemployment high, gov debt high, retail and leisure sectors hammered, companies will severely struggle afterwards but nope it's silly season buy anything anything and it will go up, cant do it forever due a pull back imo.
Rally of the lows has served me well bought in on fed money stimulus news and have been active on the what's your big gamble forum...
S&P recovered for the year, nasdaq looking at 10k soon. It's the fiscal and monetary stimulus at work.
Boeing up 50% best month ever and only 8 days in so they were saying on cnbc when orders are down, air travel not likely to be back where it was for many years, max jet issues yet to be resolved and it's only 30% down from high.
Unemployment high, gov debt high, retail and leisure sectors hammered, companies will severely struggle afterwards but nope it's silly season buy anything anything and it will go up, cant do it forever due a pull back imo.
Been another chunky up day on US markets, for no apparent particular reason.
I know these are random, but a couple of individual stock performances today are stunning - Hertz up 115%, it's now higher than before they went 'bust'. Chesapeake Energy Corporation up 182%. To reiterate - they're up that much in one day.
I know these are random, but a couple of individual stock performances today are stunning - Hertz up 115%, it's now higher than before they went 'bust'. Chesapeake Energy Corporation up 182%. To reiterate - they're up that much in one day.
I guess markets aren't always rational, am also in the camp who are slightly apprehensive about where the market may go.
I only use a passive equities tracker and it's come up a long way since march but don't understand how it's accurately reflecting the real world economy right now unless we are in for a a delayed reaction and subsequent drop later this year. I hope I am wrong but looking at the economy and jobs situation out there as a result of Covid makes me wonder...
I only use a passive equities tracker and it's come up a long way since march but don't understand how it's accurately reflecting the real world economy right now unless we are in for a a delayed reaction and subsequent drop later this year. I hope I am wrong but looking at the economy and jobs situation out there as a result of Covid makes me wonder...
Sambucket said:
I've concluded that if money supply is such an important part of the stock market index pricing, then I want to diversify away from that. I appreciate stimulus reduces downside risk but it all makes me nervous. Perhaps simply because I don't understand it, but peace of mind is important.
I'm a bit stuck with SIPP so it will probably get chucked back in to trackers at some point... but otherwise, I'm going to try and invest in real businesses. Including my own. It's not possible for everyone, but if you find passive investing tricky to sticky to, and are actively trading the stock market in times of crisis.... then you might as well go full active, and take control over your investments in a more direct way.
That’s how I feel about the stock market. It’s not really about picking great companies and maybe applying a bit of critical thinking. Bigger forces are at work and it’s hard to understand or reason about any of them. It’s a strange environment to gamble with your life savings or retirement with.I'm a bit stuck with SIPP so it will probably get chucked back in to trackers at some point... but otherwise, I'm going to try and invest in real businesses. Including my own. It's not possible for everyone, but if you find passive investing tricky to sticky to, and are actively trading the stock market in times of crisis.... then you might as well go full active, and take control over your investments in a more direct way.
Edited by Sambucket on Tuesday 9th June 09:33
The problem is where to put the money if not into the markets. Most options have downsides.
I’m nearly back to where I was pre COVID but feel like a rabbit in the headlights knowing where to invest.
Sambucket said:
I've concluded that if money supply is such an important part of the stock market index pricing, then I want to diversify away from that. I appreciate stimulus reduces downside risk but it all makes me nervous. Perhaps simply because I don't understand it, but peace of mind is important.
I'm a bit stuck with SIPP so it will probably get chucked back in to trackers at some point... but otherwise, I'm going to try and invest in real businesses. Including my own. It's not possible for everyone, but if you find passive investing tricky to sticky to, and are actively trading the stock market in times of crisis.... then you might as well go full active, and take control over your investments in a more direct way.
I’m not a passive investor and invest in a range of companies, bonds and funds etc. However, rather than doing it part-time myself, I accept I am a novice and therefore take advice from people I trust to invest on my behalf as their full-time job, who happen have decades of successful experience. It’s a bit like doing a DIY job round the house or paying a professional, the true professional will always do a better job and will make fewer mistakes. I'm a bit stuck with SIPP so it will probably get chucked back in to trackers at some point... but otherwise, I'm going to try and invest in real businesses. Including my own. It's not possible for everyone, but if you find passive investing tricky to sticky to, and are actively trading the stock market in times of crisis.... then you might as well go full active, and take control over your investments in a more direct way.
Edited by Sambucket on Tuesday 9th June 09:33
dmahon said:
That’s how I feel about the stock market. It’s not really about picking great companies and maybe applying a bit of critical thinking. Bigger forces are at work and it’s hard to understand or reason about any of them. It’s a strange environment to gamble with your life savings or retirement with.
The problem is where to put the money if not into the markets. Most options have downsides.
I’m nearly back to where I was pre COVID but feel like a rabbit in the headlights knowing where to invest.
Interest rates at historic lows, so you either put up with that, stick it under the mattress, or your in the market, most going into drawdown pensions will be invested in the stock market as we need to beat inflation plus a little bit more to maintain the pot. The problem is where to put the money if not into the markets. Most options have downsides.
I’m nearly back to where I was pre COVID but feel like a rabbit in the headlights knowing where to invest.
The stock market goes up over time, as long as you have enough to ride out the bumps its worked in the past and will continue to work in the future, until it doesn't..... and who knows when or if that will happen.
Phil. said:
I’m not a passive investor and invest in a range of companies, bonds and funds etc. However, rather than doing it part-time myself, I accept I am a novice and therefore take advice from people I trust to invest on my behalf as their full-time job, who happen have decades of successful experience.
Are we talking DFMs, IFAs or something else?covmutley said:
Be fearful when others are being greedy, and be greedy when others are fearful. That may be the one? It sounds relevant right now!
The greed index is quite high 
. https://money.cnn.com/data/fear-and-greed/Simpo Two said:
Are we talking DFMs, IFAs or something else?
I use a broker and IFA who communicate to ensure they are aligned to my priorities. Edited to say my broker is a DFM, they offer discretionary and advisory investment management - had to look up the term.
Edited by Phil. on Tuesday 9th June 15:12
Sambucket said:
Fair enough. Personally I meant active in a more buffet sense. Investing cash in businesses I have personal connections with etc.
In terms of funds vs passive vs active. Is any tracker really that passive? Ftse for instance is an active bet on oil and gas and banks. SP500 is an active bet on the big four tech companies. And a fund manager rarely does more than advise on weightings of these indexes.
These companies dominate world trackers to such extent, that no investment seems passive to me anymore. My pension is still going here like everyone elses. But otherwise, if my mental ram is going to be consumed by this stuff, I'd rather be actively involved
Understood. My best investment was in my business, well when I it sold it was. In terms of funds vs passive vs active. Is any tracker really that passive? Ftse for instance is an active bet on oil and gas and banks. SP500 is an active bet on the big four tech companies. And a fund manager rarely does more than advise on weightings of these indexes.
These companies dominate world trackers to such extent, that no investment seems passive to me anymore. My pension is still going here like everyone elses. But otherwise, if my mental ram is going to be consumed by this stuff, I'd rather be actively involved
Edited by Sambucket on Tuesday 9th June 11:18
Derek Chevalier said:
Agreed on bonds not being immune to downturns - 1916 saw a fall of 20% for example which must've been pretty painful for someone thinking they had a "cautious" portfolio.
I've been trying to bite my lip on this after your last comment about seeing how today's "star funds managers" performed during the great recession (when they hadn't even been born), but you have now had to go back over a century to try and prove your point and completely disregarded the historical context.In 1916 we were in the middle of the biggest global war the world had ever known (WWI) and so this was unprecedented and hardly a surprise bonds fell in value.
Over 18m allied soldiers were killed (including from my own family), wounded, or missing in action and 4m allied citizens were also killed.
People had a different view on the word "painful" back then, at it wasn't the elite temporarily losing 20% on their bond holdings.
rockin said:
IMO pure equity is fine so long as you've got the cojones and resources to avoid panic selling when there's an instant 20% fall in the market - such as we saw in April.
You may recall that when FTSE fell to 5000 there was a significant body of opinion saying "it'll get worse yet". To sell at that stage would, as things turn out, have been an absolutely disastrous decision.
Bonds aren't IMO a magic cure because these days almost every form of investment is correlated to a greater or lesser extent. (Gold is perhaps the exception but I wouldn't touch that with a barge pole. Cash is hopeless because at 1% interest rates your money is shrinking with inflation.) However, I do think bonds can provide a comfort zone - the degree of comfort depending upon the level of bond risk you select, which essentially means "junk", "investment grade" or "gilts" with returns that vary accordingly. My own comfort zone has been what I hope to be "good quality junk" and that element of my portfolio is slightly ahead of where it was in April. My equities took a 20% hit in April (ouch!) and have, I am pleased to say, now substantially recovered.
While equities were off 20% I took the opportunity to net off some gains and losses and create greater flexibility going forward in the general investment account (where CGT can be a nuisance). IMO effective tax management is critical for the private investor but you don't want the tax tail trying to wag the investment dog.
why wouldn't you touch Gold with a barge pole?You may recall that when FTSE fell to 5000 there was a significant body of opinion saying "it'll get worse yet". To sell at that stage would, as things turn out, have been an absolutely disastrous decision.
Bonds aren't IMO a magic cure because these days almost every form of investment is correlated to a greater or lesser extent. (Gold is perhaps the exception but I wouldn't touch that with a barge pole. Cash is hopeless because at 1% interest rates your money is shrinking with inflation.) However, I do think bonds can provide a comfort zone - the degree of comfort depending upon the level of bond risk you select, which essentially means "junk", "investment grade" or "gilts" with returns that vary accordingly. My own comfort zone has been what I hope to be "good quality junk" and that element of my portfolio is slightly ahead of where it was in April. My equities took a 20% hit in April (ouch!) and have, I am pleased to say, now substantially recovered.
While equities were off 20% I took the opportunity to net off some gains and losses and create greater flexibility going forward in the general investment account (where CGT can be a nuisance). IMO effective tax management is critical for the private investor but you don't want the tax tail trying to wag the investment dog.
I don't mean this in a spiteful or condescending way, just genuinely interested in your views on Gold
in case I've missed/can learn something newI doubt you'll learn much from me on the subject...
Gold has a very long history of popularity - not least because it's compact, relatively rare, very pretty and easy to work. But it doesn't really have any innate usefulness in the modern world other than as an electrical contact. It's not even particularly expensive when compared with some modern, exotic materials.
Gold has a traditional role as "something different" in which to put money although that seems to me always speculative. Gold never generates a return as result of anyone doing any work or thinking of a new invention. It never builds a new factory, opens more shops, introduces a new product range or enters new markets. It simply reacts to other things that are going on in the world.
Gold never pays a dividend (not a key factor to me).
Gold costs money to store and insure.
It's for these reasons I choose not to own gold. Nonetheless I recognise it may play a useful role in other peoples investment strategies. I don't own any Premium Bonds either and I wouldn't buy a BTL at present. It's all horses for courses.
Gold has a very long history of popularity - not least because it's compact, relatively rare, very pretty and easy to work. But it doesn't really have any innate usefulness in the modern world other than as an electrical contact. It's not even particularly expensive when compared with some modern, exotic materials.
Gold has a traditional role as "something different" in which to put money although that seems to me always speculative. Gold never generates a return as result of anyone doing any work or thinking of a new invention. It never builds a new factory, opens more shops, introduces a new product range or enters new markets. It simply reacts to other things that are going on in the world.
Gold never pays a dividend (not a key factor to me).
Gold costs money to store and insure.
It's for these reasons I choose not to own gold. Nonetheless I recognise it may play a useful role in other peoples investment strategies. I don't own any Premium Bonds either and I wouldn't buy a BTL at present. It's all horses for courses.
There is a great Warren Buffet thought experiment on gold (a few years dated now but the logic holds):
Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion.
For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually).
Current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.
A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything.
You can fondle the cube, but it will not respond.
Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion.
For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually).
Current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.
A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything.
You can fondle the cube, but it will not respond.
NickCQ said:
There is a great Warren Buffet thought experiment on gold (a few years dated now but the logic holds):
Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion.
For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually).
Current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.
A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything.
You can fondle the cube, but it will not respond.
Great quote!Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion.
For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually).
Current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.
A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything.
You can fondle the cube, but it will not respond.
Gassing Station | Finance | Top of Page | What's New | My Stuff