Where is the FTSE going?
Discussion
Simpo Two said:
The disconnect is that Mr Concerned Punter believes that by paying a professional adviser of finance, he will have his hand held through the difficult times. To be told 'Yeah whatever' is somewhat disappointing.
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Agreed. Would expect better than that..
Simpo Two said:
What differentiates a salesman of financial products from a fund picker?
I'm not sure either is what you should be looking for! DonkeyApple said:
I’ve not even looked at my pension or isa.
That's quite a good point on psychology perhaps.I've checked my ISA almost daily because I'm still in that habit.
I've not looked at my pension because it's long term and the I never see the money going into it because it's taken at source and managed by Royal London.
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hstewie said:
hstewie said:DonkeyApple said:
I’ve not even looked at my pension or isa.
That's quite a good point on psychology perhaps.I've checked my ISA almost daily because I'm still in that habit.
I've not looked at my pension because it's long term and the I never see the money going into it because it's taken at source and managed by Royal London.
Digga said:
Regarding platforms not working, there were some issues with the webnet over the last couple of days, so any perceived 'clunkiness' could potentially be this, as much as the platform itself.
Possibly. The main issue is that investment platforms are not built to handle heavy data flow so what happens when the market moves heavily is a two pronged attack on their robustness. Firstly everyone is logging in at the same time, every 5 minutes to check on how much they’ve lost. These platforms are designed to typically handle only a small % of clients ever logging in simultaneously. Secondly, the demands on exchange data spike well beyond what they have designed their system to ever handle. They may even have throttles on data as live data isn’t important in their model. It’s worse on platforms designed on non streaming data as the massive demand from clients gives an effective load that’s almost comparable and ping, they give up the ghost. In short, platforms designed for a product where a client might log in once a month will have an emotional breakdown like a mother running a toddlers party when all the clients are suddenly making demands every 5 seconds.
We seem to have entered the next phase where the initial sell off has halted and the market consolidates while it works out if it’s going to tank again or start the Santa Rally.
This is usually the point that I would start going long very small positions with stops around the 7000 mark. The intent being to open additional positions as the FTSE climbs back and. If general media sentiment continues to back the view. Brexit is a potential spanner in the works as it will almost certainly inspire short term, headline driven, volatility over the same period.
This is usually the point that I would start going long very small positions with stops around the 7000 mark. The intent being to open additional positions as the FTSE climbs back and. If general media sentiment continues to back the view. Brexit is a potential spanner in the works as it will almost certainly inspire short term, headline driven, volatility over the same period.
DonkeyApple said:
Armitage.Shanks said:
DonkeyApple said:
? Almost all traders wipe out in the end. I’ve a client who has dropped £500k on his £500k account this week, which is plain depressing to see. Over twenty years I can honestly say I’ve only had two clients who consistently make profits every year. Traders just repeatedly trade too big or too often chasing profits which aren’t sustainable. In my view, 10-40% per annum is the sweet spot for sustainability.
So in a nutshell ride it out rather than chase the potential for profits? On the trading side a trader should know very clearly what market conditions favour their style of trading. For most they favour rising markets so in conditions such as this it would make sense to sit it out, not in the market. Short term long positions should have been closed a while back to cut losses. October is crash month so any long only trader would have been very aware of the statistical risk and have wound down positions and deal sizes in advance anyway. Monday’s in October are especially favourable for crashes so you wouldn’t hold over weekends.
Where punters get it wrong is from holding on to loss making trades hoping they will bounce back in the short run, then they hope they will just bounce back to yesterday’s levels and finally their broker has to step in and close it out for them. They also start trying to guess the bottom and opening more long punts just to dig a deeper hole. Web stats for all retail brokers will have plummeted this month as clients decline to login to see how their positions have fallen and just hope that the market recovers before they are margined out.
I wish I had read them 10-15 years ago, before I did exactly as you describe in your last paragraph, and obviously lost the lot.
Today, I trade over a timeframe of a few days, and invest over a timeframe of a few decades.
With the benefit of more experience and honed analysis, I get it right more of the time, so trading gains from shorting FTSE last week offset losses on untouched long positions in ISA and SIPP.
sideways sid said:
Wise words as always DA!
I wish I had read them 10-15 years ago, before I did exactly as you describe in your last paragraph, and obviously lost the lot.
Today, I trade over a timeframe of a few days, and invest over a timeframe of a few decades.
With the benefit of more experience and honed analysis, I get it right more of the time, so trading gains from shorting FTSE last week offset losses on untouched long positions in ISA and SIPP.
Similar. I don’t trade that often. I don’t have the time or the inclination. My trading occurs when a particular market has been heavily over sold and I look to scale in over time as it gets bought back up to fair value. I don’t touch anything that isn’t governed by true institutional money and macro economics. I wish I had read them 10-15 years ago, before I did exactly as you describe in your last paragraph, and obviously lost the lot.
Today, I trade over a timeframe of a few days, and invest over a timeframe of a few decades.
With the benefit of more experience and honed analysis, I get it right more of the time, so trading gains from shorting FTSE last week offset losses on untouched long positions in ISA and SIPP.
In the decade of QE the ‘buy the dip’ strategy has fitted well with my style. I have scaled in to markets after heavy sell offs.
What took me years to learn and in reality I always knew it but the problem was a lack of confidence to follow my beliefs was that the vast majority of people in the markets, senior to me talked s
t. Pure unadulterated crap. Just like pretty much everyone on Twitter seems to talk crap. They’re all just talking their own book up. The purpose of them talking to me was for them to keep trying to convince themselves that they weren’t balls deep, long and wrong in some crappy stock. I remember years ago discovering what looked like an amazing arbitrage, free money opportunity during the take over of Northern Leisure by Luminar. The takeover had gone unconditional and was all paper with 4 Northern Leisures converting to 1 Luminar. But Luminar was trading at something like £8 whereas Northern Leisure was something like £1.80.
This meant that you could buy 4 Northern Leisures in the market on t5, sell 1 Luminar on t5 and all you had to do was phone up the registrar and get them to convert your 4 Northern Leisure shares into 1 Luminar and deliver that to the market to settle your short and you made 80p just for picking up the phone to the registrar.
I couldn’t really believe that this was that easy and I took it to all the senior brokers to ask their opinion. They all told me I was wrong and that I didn’t understand yet how the stock market worked. I spoke at length to the lady at the registrars who assured me that I was right and I went ahead and tested it in the market buying something like £20k of Northerns on extended settlement, selling the Luminar and crossing them at the registrars. It made me £2k that day and I then spent maybe two weeks soaking up every single pool of liquidity in Northern Leisure, crossing and delivering to settle the corresponding Luminar shorts. I was the highest earning broker in the company that year by an enormous margin which being still on the graduate training scheme marked my card somewhat.
DonkeyApple said:
What took me years to learn and in reality I always knew it but the problem was a lack of confidence to follow my beliefs
I know that feeling even though I've only been small time dabbling for 18 months or so. I could kick myself at missed opportunities, oh well better safe than broke
DonkeyApple said:
I was the highest earning broker in the company that year by an enormous margin which being still on the graduate training scheme marked my card somewhat.
Derek Chevalier said:
bhstewie said:
hstewie said: What, if anything, are people doing to diversify?
Assuming you hold a mix of global equity and quality bonds, I'm not sure how much further diversification you would require.Although the FTSE100 is a fairly global index anyway if you're heavily into it and want to diversify away a global property index tracker or just buying more stuff dollars is the way to go.
The pound is going to really get s
t on further if we have a no deal Brexit (although that might boost the FTSE in the short term) FredClogs said:
Derek Chevalier said:
bhstewie said:
hstewie said: What, if anything, are people doing to diversify?
Assuming you hold a mix of global equity and quality bonds, I'm not sure how much further diversification you would require.Although the FTSE100 is a fairly global index anyway if you're heavily into it and want to diversify away a global property index tracker or just buying more stuff dollars is the way to go.
The pound is going to really get s
t on further if we have a no deal Brexit (although that might boost the FTSE in the short term) FTSE 100 is a truly terrible global index - way too much volatility for the historical level of return.
Think you need to be a bit careful with property as a diversifier - when things go bad, property tends to suffer (using 2008-2009 data)
Derek Chevalier said:
bhstewie said:
hstewie said: What, if anything, are people doing to diversify?
Assuming you hold a mix of global equity and quality bonds, I'm not sure how much further diversification you would require.Personally I wouldn't touch gold or anything else which is guaranteed to produce no income. Neither would I touch btl at this stage (because its heavily taxed, illiquid, increasingly regulated, involves tenants and has significant costs of entry/exit).
Derek Chevalier said:
bhstewie said:
hstewie said: What, if anything, are people doing to diversify?
Assuming you hold a mix of global equity and quality bonds, I'm not sure how much further diversification you would require.bhstewie said:
hstewie said: I read a lot (always good to have lots of opinions/options) and there's something called the "Harry Browne Permanent Portfolio" which is an interesting approach.
One of the bloggers on Monevator essentially has this portfolio, 25% global stocks, 25% bond tracker, 25% gold, 25% cash. It's not going to get you rich quick though. Over a lifetime I'm sure it's a safe option.
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