Fellow armchair economists....

[hallion]

What's your prognosis of the global economy over the next couple of years? Is it time to sell your stocks and shares and sit on cash until the next downturn or will you bull ahead and keep investing?

[Simpo Two]

I'd say it depends what you invest in. I believe that no matter what happens, there is always someone making money when the herd has gone the other way.

[williaa68]

Interesting question. We've had almost six years of pretty strong markets. It is hard to believe we will have another six but I dont think anything will change materially until we start to see interest rates going up, which may be post the summer in the US, but I think will be a while elsewhere. I think a lot depends on one's attitude to risk. For me, loses and gains are not symmetrical - ie I'd worry about losing 20% of my assets much more than I'd be happy to add 20%. I've not sold eveything but I've certainly increased the amount of cash I hold, although with cash <2% for 12 months and the iShares dividend tracker at >4% that isnt an easy call either!

[gregf40]

williaa68 said:

Interesting question. We've had almost six years of pretty strong markets.

I don't agree you can look at it in those terms.

The FTSE100 is only where it was in 1999. Since about 1997 the FTSE has bobbed up and down but not really gone up at all.

Compare this with the DJIA which has more than doubled since the late 90's.

I think UK shares look cheap at the moment and have been buying them heavily since 2010 - and am continuing to do so.

The FTSE will be at 10000 in the next 3-5 years IMO.

[greygoose]

I still can't see interest rates heading upwards in the next six months, the recoveries and growth figures in the U.S. and UK are not that great and Europe still faces problems. Growth in China has slowed and there still seems a lot of uncertainty out there with the Middle East and Russia.

[mike9009]

gregf40 said:

williaa68 said:

Interesting question. We've had almost six years of pretty strong markets.

I don't agree you can look at it in those terms.

The FTSE100 is only where it was in 1999. Since about 1997 the FTSE has bobbed up and down but not really gone up at all.

Compare this with the DJIA which has more than doubled since the late 90's.

I think UK shares look cheap at the moment and have been buying them heavily since 2010 - and am continuing to do so.

The FTSE will be at 10000 in the next 3-5 years IMO.

I hope so, as I am fairly heavily invested in the FTSE100. Just trying to diversify at the moment - but I hold a similar opinion about the FTSE (not sure about reaching 10000 though?)

Growth is still fairly stagnant, especially in our neighbouring european countries. Once growth increases and interest rates start rising to 'normal' levels, I think this is the point to really divest out of the stocks and shares to wait for the next 'big' fall. I would definitely not jump ship yet....

How long was the recovery after the 'big' depression of the 1920s?

I love doing this as usually the exact opposite of what I say happens.....#

Mike

[williaa68]

I'd say it has done more that bobbed up and down a bit! i sympathise with your basic point though - i bought a FTSE index tracker in my PEP in March 1998 and it took almost 17 years for the index to get back to those levels. However, when I look at the actual value my £6000 is now worth c£9500 due to reinvesting the dividends (and paying a fair bit in fees!). I could have done a lot better in other things but it isn't too bad overall. However, I still worry about a correction.....