S&P500 at record highs - time to stay in or pull out?
Discussion
butchstewie said:
Blue_star said:
I cant either but we are at once in generation situation, dont you think?
I apologise to all here - i cannot quote multiple posters in one post
Now?I apologise to all here - i cannot quote multiple posters in one post
Honestly no I'm not sure we are.
And if we are it's not been very long since the last once in a generation situation (Covid) is it?
okgo said:
Blue_star said:
Why dont you comment on how we are at all time high when global supply routes are so damaged?
And I did sell
Because I have no idea how the markets will react to this, or any other news. So I don t try. And I did sell
Inlineonline said:
There s an argument that even at retirement it may not be wise to be too defensive.
At 60 for a couple there is a very high chance that at least one of you will reach 90. Going bond heavy at 60 pretty much guarantees that your total assets will be eroded by inflation, while you still actually have plenty of time to weather the stock market and therefore gain from higher returns
Also worth considering that if younger lucky enough to have a DB pension then you should consider this (and the state pension as well really) in effect to be an index linked bond when working out your overall asset allocation.
In that case even putting some of your investment account into bonds would be extremely conservative.
At 60 for a couple there is a very high chance that at least one of you will reach 90. Going bond heavy at 60 pretty much guarantees that your total assets will be eroded by inflation, while you still actually have plenty of time to weather the stock market and therefore gain from higher returns
Also worth considering that if younger lucky enough to have a DB pension then you should consider this (and the state pension as well really) in effect to be an index linked bond when working out your overall asset allocation.
In that case even putting some of your investment account into bonds would be extremely conservative.
Historically your opinion has been correct. I only say historically, because we can never be certain about the future, but I don't use bonds/gilts long-term.
One aspect that you may be interested in.
I have a DB pension in payment, with the usual modest annual increases, probably rarely exceeding (pensioner) inflation.
Over the years, total dividend increases have far exceeded the pension increases.
Pension providers cannot be over generous, whereas businesses share their profitability with shareholders.
That is why some dividend increases can sometimes be +10% or +20%.
Never get that from bonds.
Panamax said:
Although so does inflation.
In rough terms you need to double your money every 20 years just to stand still. This is what makes holding cash so challenging, bonds a pretty limited return and Premium Bonds next to useless. And if any compounding income or gains are taxable the picture is even tougher.
Agree again thought I think this comes down the comments earlier in the thread.In rough terms you need to double your money every 20 years just to stand still. This is what makes holding cash so challenging, bonds a pretty limited return and Premium Bonds next to useless. And if any compounding income or gains are taxable the picture is even tougher.
I suppose this is an S&P 500 thread so the focus will be on the S&P but if we take that as the example.
100 people go and speak to a UK advisor/IFA.
How many do you think walk out having been advised they should put all or even a significant portion of any existing wealth or ongoing contributions into just the S&P 500?
I doubt it's many if any at all.
Said it before but there often seems to be a "gap" on forums in general between "cash" and "all in equities" when as we all know it's more like a set of dials where you can and should tune those dials to what's appropriate for your situation.
Blue_star said:
Okgo, btw instead of talking about what me and you can/do do it would be good to share your opinion on current valuations.
But that s falling into the trap of thinking one knows more than they do, again. Or more likely being sucked into such views by some commentator who also has no clue. Passive investing by design allows you to avoid getting involved in this. And given almost all active managers (with endless analyst resource and whatever else that gives them an edge over a 212 user) lose eventually to the market, trying to think I know more and can time it better than them is completely mental.
Of course a broken clock is right twice a day, so there may be a correction where you get to say ‘told you’ - but you don’t know when, how long it will last and crucially when then to re-enter so inflation doesn’t erode your capital.
butchstewie said:
Said it before but there often seems to be a "gap" on forums in general between "cash" and "all in equities" when as we all know it's more like a set of dials where you can and should tune those dials to what's appropriate for your situation.
This is something I find remarkable. Risk is a spectrum, yet people want to either be all out 100% risk on in equities or 100% risk off in cash.
There s;
a) a massive amount of data that shows trying to switch between the above 2 leads to really poor outcomes for investors
and
B) a wide range of good products that fill the various gaps between the 2 which anyone can access.
Very very strange !
Edited by simon800 on Saturday 9th May 16:53
Car bon said:
We might be, but the bigger question is where we are on that path - how many more AI boom years are there before the (almost) inevitable correction. Or may be an energy crisis recession ? Who knows, but the point is the same, things may climb for several more years, or they may drop tomorrow......
Tech had a fairly decent correction from October last year until end of March this year, down 15% as a sector, since then it's recovered and is now up 8% on October highs. That's a swing upwards of 23% in the last 5 weeks. The market thinks the AI spend is going to continue for a while yet and that spend is likely to be in significant hardware capacity.The losers in that sector are the software giants, the clear winners are semiconductor and especially memory chip producers and chip fabrication machine manufacturers. One of my memory chip manufacturers is up 777% in 1 year. The huge spend for AI and cloud providers in infrastructure is driving this, which is why the spenders like META are getting hammered as they invest in this hardware.
If this all goes tits up because the spend doesn't generate the expected income, it will be the spending software and cloud companies that will take a bath, the hardware manufacturers will have made out like bandits and be on the beach already.
732NM said:
If this all goes tits up because the spend doesn't generate the expected income, it will be the spending software and cloud companies that will take a bath, the hardware manufacturers will have made out like bandits and be on the beach already.
I agree with this - I’m having my best year ever based on semiconductor etfs and stocks. The old saying was in the US gold rush it wasn’t the miners who made fortunes, it was the people selling them picks and shovels. It’s the same gig now - the AI guys are going to spend an additional $600Bn this year on datacentre kit - that’s cold hard cash in the hands of the component guys while the AI people try and monetise their product.Stocks showing crazy gains in the last 6M: micron, Hynix, Samsung, sandisk, western digital, AMD, Intel. And I don’t think it’s over, giving the spending commitments.
Some of the daily % gains are scarcely believable.
simon800 said:
butchstewie said:
Said it before but there often seems to be a "gap" on forums in general between "cash" and "all in equities" when as we all know it's more like a set of dials where you can and should tune those dials to what's appropriate for your situation.
This is something I find remarkable. Risk is a spectrum, yet people want to either be all out 100% risk on in equities or 100% risk off in cash.
There s;
a) a massive amount of data that shows trying to switch between the above 2 leads to really poor outcomes for investors
and
B) a wide range of good products that fill the various gaps between the 2 which anyone can access.
Very very strange !
…when cash is paying 4.6%?
At what point does fixed income start to look appealing to somebody who doesn’t yet hold any?
Really interested to hear views on this by the way, I think about it a lot.
PhilboSE said:
Some of the daily % gains are scarcely believable.
Tell me about it.I'm retired now, but my fund is yo-yo-ing by a month's income in a day. Most of the bounces are upwards, but It's f
king frightening. Up four month's income in nine days.I don't know why I ever went to work.
pingu393 said:
PhilboSE said:
Some of the daily % gains are scarcely believable.
Tell me about it.I'm retired now, but my fund is yo-yo-ing by a month's income in a day. Most of the bounces are upwards, but It's f
king frightening. Up four month's income in nine days.I don't know why I ever went to work.
Hustle_ said:
At what point does fixed income start to look appealing to somebody who doesn t yet hold any?
It’s not difficult to answer. The 30yr Gilt touched 5.8% this week. The 10yr touched 5.1%Think of it like this - if you could take 5.8% for the next 30 years or 5.1% for the next 10, would that appeal to *you*?
Obviously inflation to take into account and the fact yields have fallen since Tuesday (they could rise again(?)) but you have to weigh up the risk/reward vs (insert asset class)
Phooey said:
Think of it like this - if you could take 5.8% for the next 30 years or 5.1% for the next 10, would that appeal to *you*?
Obviously inflation to take into account and the fact yields have fallen since Tuesday (they could rise again(?)) but you have to weigh up the risk/reward vs (insert asset class)
Obviously inflation to take into account and the fact yields have fallen since Tuesday (they could rise again(?)) but you have to weigh up the risk/reward vs (insert asset class)
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