S&S ISA and Coronavirus
Discussion
Has anyone considered pulling their money out into to cash until the effects of the correct outbreak are fully known and finished?
If the stockmarket takes a massive dive if things get pandemic level would you not be better in cash rather than a S&S based fund?
I'm not saying it will, but if it does and shares crash then would the upside of doing this not outweigh the downside if nothing does happen?
If the stockmarket takes a massive dive if things get pandemic level would you not be better in cash rather than a S&S based fund?
I'm not saying it will, but if it does and shares crash then would the upside of doing this not outweigh the downside if nothing does happen?
It's already gone down a chunk so you may have missed the boat. Also consider any CG liability by selling to cash.
My opinion is that usually, by the time these things hit the news, it's too late because the smart money has already made its move. So you tuck in and wait for the recovery when everybody realises they were panicking over nothing.
You could of course invest in whichever companies are selling stuff to deal with the outbreak... which might give you 'up' rather than 'level' or 'down'...
My opinion is that usually, by the time these things hit the news, it's too late because the smart money has already made its move. So you tuck in and wait for the recovery when everybody realises they were panicking over nothing.
You could of course invest in whichever companies are selling stuff to deal with the outbreak... which might give you 'up' rather than 'level' or 'down'...
The answer to the question probably depends on if you need the money imminently? Or are happy to leave it for years?
Unless this this outbreak brings about the end of society then it’s likely this will just be a blip as part of the bigger picture.
And most of the western markets seem to be recovering slowly
Unless this this outbreak brings about the end of society then it’s likely this will just be a blip as part of the bigger picture.
And most of the western markets seem to be recovering slowly
Simpo Two said:
It's already gone down a chunk so you may have missed the boat. Also consider any CG liability by selling to cash.
OP said ISA so there would be no CGT liability. Also, time in the market beats timing the market. If you can’t handle a few days sip, stocks and shares may not be for you.
Just let it do it’s thing...
I was running some numbers on this today as I have plans to fling a couple of sizeable monthly investments in to my S&S ISA over the remainder of this tax year.
Looking at the funds I am already invested in; developed market funds have dipped on average 2-2.5% from their previous peak this year, emerging market funds have dipped 4-5% on average.
Using monthly regular investments, my normal percentage split is about 75:20:5 in to developed, emerging and bonds respectively.
Bonds I’m done with for now, I have achieved the total monetary sum I wanted in them and the returns just aren’t there at the moment.
So for the next few months I’m going to up the split to more like 60:40 developed:emerging.
There is risk in the strategy, the Chinese government pumped in a lot of stimulus to help the economy recover after the SARS outbreak and I don’t think they could do the same this time round. At the same time, the world’s dependency on the Chinese economy for certain commodities has only grown since those days so a more organic recovery should be achievable.
I’m not a financial advisor, and by Christ I’ve called it wrong in times gone by, but this feels like a time to top up or re-balance. The time to bail out was a week to ten days ago.
Looking at the funds I am already invested in; developed market funds have dipped on average 2-2.5% from their previous peak this year, emerging market funds have dipped 4-5% on average.
Using monthly regular investments, my normal percentage split is about 75:20:5 in to developed, emerging and bonds respectively.
Bonds I’m done with for now, I have achieved the total monetary sum I wanted in them and the returns just aren’t there at the moment.
So for the next few months I’m going to up the split to more like 60:40 developed:emerging.
There is risk in the strategy, the Chinese government pumped in a lot of stimulus to help the economy recover after the SARS outbreak and I don’t think they could do the same this time round. At the same time, the world’s dependency on the Chinese economy for certain commodities has only grown since those days so a more organic recovery should be achievable.
I’m not a financial advisor, and by Christ I’ve called it wrong in times gone by, but this feels like a time to top up or re-balance. The time to bail out was a week to ten days ago.
Budflicker said:
Has anyone considered pulling their money out into to cash until the effects of the correct outbreak are fully known and finished?
If the stockmarket takes a massive dive if things get pandemic level would you not be better in cash rather than a S&S based fund?
I'm not saying it will, but if it does and shares crash then would the upside of doing this not outweigh the downside if nothing does happen?
I have £26k in a Gold ETF, however that has nothing to do with the Coronavirus (which is a very minor concern - financially - in the scheme of things). I do not believe that the Coronavirus will be a catalyst in itself - but adds to on-going issues with the Chinese economic slowdown and trade tensions (ignore the US tranche 1 trade deal - face saving exercise, nothing else). If the stockmarket takes a massive dive if things get pandemic level would you not be better in cash rather than a S&S based fund?
I'm not saying it will, but if it does and shares crash then would the upside of doing this not outweigh the downside if nothing does happen?
I got it wrong with my move into Gold last year because I misunderstood (an understatement) the effect of Powell's Dec 18 interest rate flip-flop and the tsunami of cheap money that is sloshing around the global financial system. Govt / Corporate debt? F**k that - doesn't matter under MMT; when the music does eventually stop, it will be us suckers (tax-payers) picking up the bill.
As others have said, if we reach truly 1918 Spanish flu [influenza] levels, then whether my money is in stocks or cash, isn't much of a consideration when the Spanish flu killed more people than were killed during WW1 1914 - 1918.
If brown fecal matter hits the fan, than unless it is a black swan event, it is more likely to happen in 2021 than 2020. There doesn't appear to be any real appetite for Politicians or the Central Banks (which are probably getting to the limits of monetary policy, unless they really kick out the jams and head into deep negative rate territory) to ween the markets off the sugar rush.
To the OP, unless you need the money imminently, in which case maybe you shouldn't be invested in shares at all, I would say the chances are you would be better off just leaving it where it is.
Personally I am investing with a 15 - 20 year horizon, so any time share / fund prices go down, I will be trying to scrape a bit of cash together to buy at a cheaper price. I can't see me selling ANYTHING for at least 12 - 15 years.
Personally I am investing with a 15 - 20 year horizon, so any time share / fund prices go down, I will be trying to scrape a bit of cash together to buy at a cheaper price. I can't see me selling ANYTHING for at least 12 - 15 years.
Edited by BlackG7R on Saturday 1st February 17:40
Budflicker said:
Well, looking back at when I started this thread I'm glad I ignored the advice and cashed everything out on the 11th.
Phew...
I believe there is a long way further down yet to come.
OK so you've timed it well this time, but what are you going to do with the cash, and when are you going to get back in ?Phew...
I believe there is a long way further down yet to come.
Trying to market time is usually a bad idea, because the chances are you won't get it right next time.
Watch a few interviews with John Bogle (of Vanguard) on Youtube, he makes a very convincing case for just riding out the highs and the lows, gradually adding each month, and just ignoring what the market does. Warren Buffet says similar if you buy a good company never sell it.
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