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

[river_rat]

rockin said:

Your cojones are bigger than mine if you're buying at the moment.

Prices are all reduced now, best time to be buying IMO.

Better than waiting for stock prices to recover back to where they were and then buy surely?? Time will tell....

[bmwmike]

NickCQ said:

98elise said:

Agreed. Don't try to catch a falling knife.
I will buy my funds back when the news looks better.

This is sort of illustrating what I was saying earlier - you are outlining a strategy where you wait until prices go up, then buy.

That's my view too.

If it's a long term hold (everything I own is 7-10yr to go - both stocks and funds) then selling due to a global event like a virus is only useful if you sell immediately (aka dont dither) and then crucially have to buy back as soon as the bottom is reached (aka crystal ball).

Or just buy more on the way down in drips but don't buy when it's flying high.

Caveats being - the bottom turns out to be utter devastation and / or the virus turns out to be doomsday end of the world in which case all paper is off and only precious metals *in hand* are worth having anyway...

Imo/dyor/etc

[SJfW]

I had been moving more cash savings towards S&S ISA savings over the few months so this has all played out splendidly for me

Figured I would learn from past blunders and average in rather than pile in. First decent chunk went in in December, worked out ok. January’s chunk got invested right before the world took notice of the situation. February’s chunk went in after most of the worlds markets had stabilised from the first panic and America’s had marched on regardless.

Needless to say the past few days have seen yet more losses.

At the same time, there’s been useful learnings;
- I’m pleased I chose to average in rather than pile in.
- I’m pleased I altered my investment spread for the February pay in, correctly assessing the American markets had a reality check waiting and reduced my investment in that direction (in the time from the day of investment the Dow and S&P have fallen roughly double in percentage terms what other markets have).
- I’m disappointed I didn’t trust my instincts more to reduce February’s monthly investment.

With one monthly investment left this ISA year, I don’t have to make the call until mid-March but whilst I intend to put enough cash in to the account to take up this year’s allowance, I don’t think I’ll action all of it. Will depend when the global outlook is, but at this point I think I will just be making the minimum investment across my accounts to maintain the fee-free monthly investment.

[98elise]

NickCQ said:

98elise said:

Agreed. Don't try to catch a falling knife.
I will buy my funds back when the news looks better.

This is sort of illustrating what I was saying earlier - you are outlining a strategy where you wait until prices go up, then buy.

No I will buy when the news looks better ie the spread seems to be under control and numbers are dropping, the prices may still be going down at that point.

I'm not aiming to make any money from this dip. I'm aiming to limit the affects of any big drops if they come.

[NRS]

bmwmike said:

NickCQ said:

98elise said:

Agreed. Don't try to catch a falling knife.
I will buy my funds back when the news looks better.

This is sort of illustrating what I was saying earlier - you are outlining a strategy where you wait until prices go up, then buy.

That's my view too.

If it's a long term hold (everything I own is 7-10yr to go - both stocks and funds) then selling due to a global event like a virus is only useful if you sell immediately (aka dont dither) and then crucially have to buy back as soon as the bottom is reached (aka crystal ball).

Or just buy more on the way down in drips but don't buy when it's flying high.

Caveats being - the bottom turns out to be utter devastation and / or the virus turns out to be doomsday end of the world in which case all paper is off and only precious metals *in hand* are worth having anyway...

Imo/dyor/etc

I think you probably need to have a drop closer to 10%+ drop in the market for the standard person to get it right with that buy/sell strategy (most of the time!). It usually needs to be closer to 5%+ drop to be noticed before selling as it happens so quickly. Then wait to see bottom, it climbs a bit and so that puts you closer to at least 10% drop to avoid buying a possible bounce of say 1-2% from bottom/see the bottom is in and turning. And drops of 10%+ are relatively rare, so hard to be sure of only doing this for a correction/proper market reset, without accidentally doing it for all the smaller drops between those large ones too.

I've not sold anything now, but put my normal ~monthly buy for my usual funds 2 days ago, as they normally take ~2 days to go through. Was guessing there would be at least a few days before any bounce so if it is a "buy the dip" it's probably closer to it. If it's a proper big drop then I cost-average on the way down as I am very unlikely to be able to know when the bottom is in.

[Tony Angelino]

I am a (very) small time player here and only have 2 investments, one is in a large building supplies company through an employee share options scheme and the other is a brand new ISA with PH Equity, my 2nd modest monthly direct debit is about to go in.

Building supplies down around 10% in the last week or so after being +12% or a few weeks ago. .

Currently have 2 share scheme options, 1 maturing December 2020 and the second maturing 12/2021. Overall these are both up roughly 20% compared to the discounted price they can be purchased at, I ideally want to sell them as soon as I can so hopefully things will have time to recover by then.

[Gandahar]

river_rat said:

rockin said:

Your cojones are bigger than mine if you're buying at the moment.

Prices are all reduced now, best time to be buying IMO.

Better than waiting for stock prices to recover back to where they were and then buy surely?? Time will tell....

So you think we have already reached the bottom and on the way up again?

What leads you to that analysis?

[Gandahar]

NRS said:

bmwmike said:

NickCQ said:

98elise said:

Agreed. Don't try to catch a falling knife.
I will buy my funds back when the news looks better.

This is sort of illustrating what I was saying earlier - you are outlining a strategy where you wait until prices go up, then buy.

That's my view too.

If it's a long term hold (everything I own is 7-10yr to go - both stocks and funds) then selling due to a global event like a virus is only useful if you sell immediately (aka dont dither) and then crucially have to buy back as soon as the bottom is reached (aka crystal ball).

Or just buy more on the way down in drips but don't buy when it's flying high.

Caveats being - the bottom turns out to be utter devastation and / or the virus turns out to be doomsday end of the world in which case all paper is off and only precious metals *in hand* are worth having anyway...

Imo/dyor/etc

I think you probably need to have a drop closer to 10%+ drop in the market for the standard person to get it right with that buy/sell strategy (most of the time!). It usually needs to be closer to 5%+ drop to be noticed before selling as it happens so quickly. Then wait to see bottom, it climbs a bit and so that puts you closer to at least 10% drop to avoid buying a possible bounce of say 1-2% from bottom/see the bottom is in and turning. And drops of 10%+ are relatively rare, so hard to be sure of only doing this for a correction/proper market reset, without accidentally doing it for all the smaller drops between those large ones too.

I've not sold anything now, but put my normal ~monthly buy for my usual funds 2 days ago, as they normally take ~2 days to go through. Was guessing there would be at least a few days before any bounce so if it is a "buy the dip" it's probably closer to it. If it's a proper big drop then I cost-average on the way down as I am very unlikely to be able to know when the bottom is in.

The problem with this is you are using a calculator and percentages against a virus which is a free will and nobody knows what will happen.

The markets over night have shown overnight they cannot handle this outside context scenario. They are still trying to second guess it ... using a very advanced calculator.

The upside is that unlike 2008 no banks are likely to go bust, due to more stringent rules put in place after. So if you have money in the bank keep it there and wait till it really bottoms out.

Bottom feeding time would be lovely, lets see. Be patient ...

[bitchstewie]

I doubt most retail investors have access to the information institutional investors have so arguably we're getting "scraps" from this come what may.

I tend to think if you're going to try and take advantage drip-feed to smooth things out a bit and don't try and catch the very bottom or be too smart.

Fingers crossed invest in good companies through funds run by reputable fund managers and sit back and hope they're earning their corn and that you've got your risk tolerance right.

[river_rat]

Gandahar said:

So you think we have already reached the bottom and on the way up again?

What leads you to that analysis?

I don't think they are at the bottom, but I do think they will recover to where they were 2/3 weeks ago at some point, so buying now make sense (all in my opinion) as a long term outlook.

Obviously if I knew when the bottom had arrived I would be waiting until then, but I don't.

[NickCQ]

98elise said:

NickCQ said:

98elise said:

I will buy my funds back when the news looks better.

This is sort of illustrating what I was saying earlier - you are outlining a strategy where you wait until prices go up, then buy.

No I will buy when the news looks better ie the spread seems to be under control and numbers are dropping, the prices may still be going down at that point.

By the time the news is better, the market will have incorporated it as well.
It's basically impossible to trade on these things as a retail investor because they get priced so quickly in by quant funds.

[NickCQ]

Gandahar said:

The upside is that unlike 2008 no banks are likely to go bust, due to more stringent rules put in place after.

I wouldn't be so sure - 'history doesn't repeat itself but it often rhymes'
Banks do look safer than in 2007 from a capital and liquidity perspective, but some other part of the financial system may go pop with systemic consequences.

[i4got]

NickCQ said:

By the time the news is better, the market will have incorporated it as well.
It's basically impossible to trade on these things as a retail investor because they get priced so quickly in by quant funds.

I guess if your broker supports it, a buy stop order may help.

[CalNaughtonJnr]

I have a Lifetime ISA with HL with (very) small amounts in Vanguard LS60 and 80 with some cash also - should I be looking to put some cash into these at the moment? (I'm 39 so looking at 20+ years time to withdraw without penalty)

[anonymous-user]

98elise said:

I'm not aiming to make any money from this dip. I'm aiming to limit the affects of any big drops if they come.

^^^ This.

The problem at the moment isn't what will happen about the virus but what will happen about "fear of the virus". Seems to me the situation is far from clear at the moment so I'm not buying anything in the immediate future.

Anyone who sold before the significant drop will still be in a strong position to buy back at a cheaper price even after markets have started rising from the bottom - wherever and whenever that bottom may turn out to be. Any negative impact on company profits won't be seen until results are announced many months forward from here.

[NRS]

Gandahar said:

The problem with this is you are using a calculator and percentages against a virus which is a free will and nobody knows what will happen.

The markets over night have shown overnight they cannot handle this outside context scenario. They are still trying to second guess it ... using a very advanced calculator.

The upside is that unlike 2008 no banks are likely to go bust, due to more stringent rules put in place after. So if you have money in the bank keep it there and wait till it really bottoms out.

Bottom feeding time would be lovely, lets see. Be patient ...

Of course, but pretty much anyone in retail will never have a proper idea if a correction is actually the start of a full blown crisis, versus say a "dip" in the market.

Put it this way for the professionals on here: should retail sell up now, to limit the downside? Or just sit tight? That's the tricky thing - generally retail will make mistakes with panic selling. This time it might not be, but it's hard to know which of the corrections in an economic cycle is the one to pick to sell out of to get out before the larger cycle ends, versus just normal smaller cycles within the larger one.

[bitchstewie]

Terry Smith 'relaxed' over coronavirus impact on Fundsmith

[anonymous-user]

Well, good for Terry. It's obviously not in his interests to be anything but optimistic. We'll see how his clients fare as the picture unfolds!

I'm still inclined to the cautious end of cautious on this one.

[98elise]

NickCQ said:

98elise said:

NickCQ said:

98elise said:

I will buy my funds back when the news looks better.

This is sort of illustrating what I was saying earlier - you are outlining a strategy where you wait until prices go up, then buy.

No I will buy when the news looks better ie the spread seems to be under control and numbers are dropping, the prices may still be going down at that point.

By the time the news is better, the market will have incorporated it as well.
It's basically impossible to trade on these things as a retail investor because they get priced so quickly in by quant funds.

Looking at the FTSE (and my SIPP) this morning and I'm very happy with my decision to convert to cash before the virus hit Europe.

I'm currently 50% cash vs funds and will probably go to 75% if the virus continues to spread.

So glad I liquidated a large chunk before there was any serious impact.

[Phooey]

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