Timing the market vs Time in the market.

[BlackG7R]

Tell me if you think i'm mad, I know they say "Time in the market is more important than timing the market" and I do try not to fiddle too much. Just pay in steadily every month, and pound cost average.

But my Fundsmith is now almost back up to the previous peak i'm showing about 17% up. The seems crazy to me, and totally out of whack with what is going on.

I'm seriously thinking about cashing out and just waiting for a while to see what happens. Even considering stimulus packages from various central banks, I just don't see how near future earnings can possibly support the current valuations. Surely this is a classic Bull trap, and it's going to crash down hard again.

Opinions ?

[Simpo Two]

I do look at the numbers and think 'Recession, what recession?' It only takes one company to say 'We might have a vaccine' and the world shoots up 4-5%.

But judge by what you see. If you believed the media we'd all be dead by now and markets at zero.

I still predict a mini-boom ahead.

As for the question, both. Obviously if you invested this March you'd have a much better starting point than last December.

[bmwmike]

aaaaand with all the magic money tree and stuff why hold cash? I see stocks as a purchase of the future work effort and innovation of others. Cash is sidelines spectating. BoE sold debt at negative interest rates this week didnt they, that doesnt bode well for future cash deposits.

[FredClogs]

I'd be more worried about Terry Smith remaining midas than the general market falling much from here if all your eggs are in his basket.

[BlackG7R]

FredClogs said:

I'd be more worried about Terry Smith remaining midas than the general market falling much from here if all your eggs are in his basket.

Not all my eggs are in Terry's basket, but it is by far my best performing basket, and yes that has also occurred, how long can he keep out performing.

Maybe get out while the going is good, and re evaluate as more earnings results come out.

Warren Buffet already had a large pile of cash, and he has sold all his airline stocks at a loss. I'm not aware of him actually buying anything at the moment.

He seems quite happy to sit on the "sidelines" for a while, and he's 90 !!

Edited by BlackG7R on Thursday 21st May 19:33

[PrinceRupert]

Timing the market is much better if you consistently get it right.

You won't.

[Benbay001]

I think there is a much greater chance of the market halving than there is of the market doubling and time soon.

Would i want to sell out completely? No.

[mikees]

Benbay001 said:

I think there is a much greater chance of the market halving than there is of the market doubling and time soon.

Would i want to sell out completely? No.

I agree. I’m 60% cash now. I’ll buy back but not yet. To quote a local advisor to these parts, “Are you more worried by losses or missing out in gains?”

Me ? I’d like to take advantage of losses if I can but can accept loss of gains.

[MSBravo]

I'm a doctor working in a very busy ED and felt when Covid was here. I remember texting my dad and banning him from work a week ahead of lockdown.

Pulled the plunge every month, including end of Feb, end of March, end of April, into my S&S ISA (I am also in Fundsmith.). This was against my gut instinct, head not heart decision, £2k/month down the drain potentially...

I'm now firmly of the Prof. Karol Sikura school of thinking - I doubt there will be a second wave, and I am confident we will be over this, in full, within 2 months.

I see boom months ahead and far from thinking "how much higher can it go", I feel like it will continue apace.

I am also likely to be totally wrong but I am absolutely confident that a monthly approach is tried and tested, and will work now as it did in 2008 etc.

[BlackG7R]

MSBravo said:

I'm a doctor working in a very busy ED and felt when Covid was here. I remember texting my dad and banning him from work a week ahead of lockdown.

Pulled the plunge every month, including end of Feb, end of March, end of April, into my S&S ISA (I am also in Fundsmith.). This was against my gut instinct, head not heart decision, £2k/month down the drain potentially...

I'm now firmly of the Prof. Karol Sikura school of thinking - I doubt there will be a second wave, and I am confident we will be over this, in full, within 2 months.

I see boom months ahead and far from thinking "how much higher can it go", I feel like it will continue apace.

I am also likely to be totally wrong but I am absolutely confident that a monthly approach is tried and tested, and will work now as it did in 2008 etc.

Interesting view, is there anything specific that makes you think there won't be a second wave ?

Going back to the beginning of March, I didn't think this would come to much, and it would be a V shaped recovery. My attitude has changed a bit now.

Firstly the market seemed a bit "frothy" anyway, Covid19 just happened to be the pin that came along to pop the bubble.

Secondly there are still going to be some horrendous earnings results, unemployment figures, and tax revenues being released for the rest of this year at least.

Thirdly some industries have been so damaged by this, that they can't just come back to work and pick up where they left off.

Airlines for example, I doubt very much if you can just leave a fleet of aircraft on the tarmac for months, then just turn up and fly away without some fairly major mechanical checks / maintenance. Mechanical things don't like being left unused, especially outdoors.

Even after lock down is lifted, who's going to want to be sealed in a metal tube with two hundred other people, not me !! Until the airlines recover the oil industry won't fully recover, and so on, and so on.

I just don't see what's holding up the stock market at the moment, I feel there's got to be another dip. But I may be wrong, I usually am.

Edited by BlackG7R on Friday 22 May 02:21

[BlackG7R]

Can't help feeling we are right between Bull trap & Return to normal on this chart.

[CzechItOut]

I'm thinking similar. My two biggest holdings are Fundsmith which is back to its peak and Blackrock Gold & General which has gone mental.

The question is, if you sell, do you hold cash or invest elsewhere. Even holdings which are well below their peak have bounced back 15% since late March, meaning the short term gains have been missed.

[Phooey]

BlackG7R said:

I just don't see what's holding up the stock market at the moment..

Bit of insight into the US market which I found very interesting https://life.spectator.co.uk/articles/reality-chec...

[Condi]

BlackG7R said:

I just don't see what's holding up the stock market at the moment, I feel there's got to be another dip. But I may be wrong, I usually am.

Trillions of dollars poured into money markets and a fear of inflation, mainly.

If inflation goes to 3, 4, 5% then nobody wants to be holding cash.

Personally, I have no idea where this market goes from here, my portfolio is as diversified as it's ever been for that reason. Cash holding is about 20%, which is too much really, but I have a few orders in to buy if/when the market goes a bit lower and so need the cash there for the moment.

Edited by Condi on Friday 22 May 13:15

[BlackG7R]

CzechItOut said:

The question is, if you sell, do you hold cash or invest elsewhere. Even holdings which are well below their peak have bounced back 15% since late March, meaning the short term gains have been missed.

I realise it's a risk, but no not thinking of investing elsewhere for the moment.

I mean for the reasonably unsophisticated average person, if you're going to be invested, where better than Fundsmith ?

Edited by BlackG7R on Friday 22 May 13:36

[gareth h]

BlackG7R said:

FredClogs said:

I'd be more worried about Terry Smith remaining midas than the general market falling much from here if all your eggs are in his basket.

Not all my eggs are in Terry's basket, but it is by far my best performing basket, and yes that has also occurred, how long can he keep out performing.

Maybe get out while the going is good, and re evaluate as more earnings results come out.

Warren Buffet already had a large pile of cash, and he has sold all his airline stocks at a loss. I'm not aware of him actually buying anything at the moment.

He seems quite happy to sit on the "sidelines" for a while, and he's 90 !!

What does Warren know? I bought Jet 2 (Dart) shares a couple of days ago and they’re up 20%! Interesting piece on their website showing cash position assuming one of three return to flying dates July / Jan / April.

Edited by BlackG7R on Thursday 21st May 19:33

[covmutley]

I am no expert, but it does seem odd. People were saying the market was due a correction even before covid.

What I dot quite understand though, is that there are plenty of stocks like BP, RBS, Lloyds, Aviva- all of which I have (some before some purchased in the last week), that are still way, way down. I can only assume that these are the ones that happen to be expected to be hit hardest?

Im now about a 50/50 in shares and funds/cash. I think there are further dips to come, but who knows. My view is that if I miss some of the bounce back, then so be it. It will mean things are 'ok' and hopefully this will be reflected in my job income. If the economy is a mess and the market goes down when im all in, that's a double whammy!

[highpeakrider]

Its an interesting question.
At 60 who knows how long you can stay invested, or if you would be better in cash then you have it to spend over the next few years worry free.

Its something I keep looking at and can't resolve.

[bitchstewie]

I say it every time but "invested" doesn't mean being 100% in equities with the accompanying volatility v sitting on a pile of cash in a bank earning 0.001%.

Look at dialling down the risk or going multi-asset or all-weather perhaps.

[xeny]

covmutley said:

What I dot quite understand though, is that there are plenty of stocks like BP, RBS, Lloyds, Aviva- all of which I have (some before some purchased in the last week), that are still way, way down. I can only assume that these are the ones that happen to be expected to be hit hardest?

any chance those are stocks that were generally owned by people looking for dividend income, and were sold due to suspended dividends?