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Post by aidanw on Mar 2, 2020 8:28:14 GMT
Dump p2p yes. Buy equities no. The panic hasn't even began. Governments are offering financial support but they need to start building hospitals now for the tsunami of cases that are sure to follow.
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hazellend
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Post by hazellend on Mar 2, 2020 8:43:03 GMT
Dump p2p yes. Buy equities no. The panic hasn't even began. Governments are offering financial support but they need to start building hospitals now for the tsunami of cases that are sure to follow. The paradox of the stock market is that when nobody thinks it is a good time to buy, the bears have all capitulated and the next leg up begins. The market could easily crash from here, but there’s enough panic and capitulation to make me happy about holding and adding. By time it seems safe to buy the bottom (whatever it turns out to be) will be in and markets will be higher. The danger for market timers is they then anchor themselves to that lower price and never buy back in. In summary Aidanw, I sense that you are risk averse so why not just buy something like vanguard life strategy 40;60 or 60:40 and then stay the course
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r00lish67
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Post by r00lish67 on Mar 2, 2020 9:28:14 GMT
Dump p2p yes. Buy equities no. The panic hasn't even began. Governments are offering financial support but they need to start building hospitals now for the tsunami of cases that are sure to follow. The paradox of the stock market is that when nobody thinks it is a good time to buy, the bears have all capitulated and the next leg up begins. The market could easily crash from here, but there’s enough panic and capitulation to make me happy about holding and adding. By time it seems safe to buy the bottom (whatever it turns out to be) will be in and markets will be higher. The danger for market timers is they then anchor themselves to that lower price and never buy back in. In summary Aidanw, I sense that you are risk averse so why not just buy something like vanguard life strategy 40;60 or 60:40 and then stay the course On that note, global markets up 3.1% so far today. Of course that could well all collapse in moments, but just shows how unpredictable they are.
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aj
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Post by aj on Mar 2, 2020 10:26:14 GMT
Over half the cases in Hubei are now reported as recovered, about a month after the initial outbreak picked up there. China seem to believe they have a handle on the outbreak.
The rest of the world just seems to be kicking off at this point so it will likely be April before light at the end of the tunnel there.
I am moving cash from P2P into my trading account but no big buys yet. I think a floor for global markets is likely due later this week but no urgency in trying to time it; better to be late than early in this situation!
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daveb
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Post by daveb on Mar 4, 2020 18:09:26 GMT
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hazellend
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Post by hazellend on Mar 4, 2020 21:56:16 GMT
So this correction hasn’t amounted to much. For those who cashed out or were waiting for lower prices, your time may come.
My advice, as always, is to choose an asset allocation that matches your risk tolerance. We have seen 2 crashes of 50% this century so I use that as a worst case scenario if you are 100% equities (still beats P2P!),
If you are fully in cash or holding off investing because you are worried about a crash, then keep a higher percentage of your assets in gov bonds/cash to suit your reduced tolerance/ability to take risk. Then just buy and hold no matter what the market is doing. Stick to index investing.
The evidence is clear that this strategy will outperform almost all amateur and professional investors after costs in the long term.
Ignore all media and expert commentary on the markets.
For all those who are still in the wealth accumulation phase of life (including myself) an equity crash is a blessing in disguise.
My naught market timing secret is that I hold 50k in premium bonds so that I have some fun money to invest in a proper crash. Other than that and not including my DB pension and P2P (all being rebalanced into equities) I’m 100% equities
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Post by aidanw on Mar 4, 2020 22:46:01 GMT
In summary Aidanw, I sense that you are risk averse so why not just buy something like vanguard life strategy 40;60 or 60:40 and then stay the course On that note, global markets up 3.1% so far today. Of course that could well all collapse in moments, but just shows how unpredictable they are. Hi hazellend, broadly agree with most of what you said there; my equity allocation is about 60%. But I just don't see a 10% drop, taking us back to where the markets were a mere six months' ago as a good enough reason to increase equity allocation right now. The drop seems rational and if anything an under-reaction. Time of course will tell. There's a lot to be said for Vanguard 60:40 buy and hold because no one ever consistently times the market well. I'm looking at reducing my p2p from 10% to below 5% (it was 15% a year ago) and keeping equity allocation at 50-70%.
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hazellend
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Post by hazellend on Mar 4, 2020 23:19:43 GMT
On that note, global markets up 3.1% so far today. Of course that could well all collapse in moments, but just shows how unpredictable they are. Hi hazellend, broadly agree with most of what you said there; my equity allocation is about 60%. But I just don't see a 10% drop, taking us back to where the markets were a mere six months' ago as a good enough reason to increase equity allocation right now. The drop seems rational and if anything an under-reaction. Time of course will tell. There's a lot to be said for Vanguard 60:40 buy and hold because no one ever consistently times the market well. I'm looking at reducing my p2p from 10% to below 5% (it was 15% a year ago) and keeping equity allocation at 50-70%. Sounds like a great plan and one that most people should consider. Once you settle on an allocation, there is no need to ever increase your allocation to equities. Just rebalance once or twice a year to keep to your allocation.
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Post by Ace on Mar 4, 2020 23:34:35 GMT
So this correction hasn’t amounted to much. For those who cashed out or were waiting for lower prices, your time may come. My advice, as always, is to choose an asset allocation that matches your risk tolerance. We have seen 2 crashes of 50% this century so I use that as a worst case scenario if you are 100% equities (still beats P2P!), If you are fully in cash or holding off investing because you are worried about a crash, then keep a higher percentage of your assets in gov bonds/cash to suit your reduced tolerance/ability to take risk. Then just buy and hold no matter what the market is doing. Stick to index investing. The evidence is clear that this strategy will outperform almost all amateur and professional investors after costs in the long term. Ignore all media and expert commentary on the markets. For all those who are still in the wealth accumulation phase of life (including myself) an equity crash is a blessing in disguise. My naught market timing secret is that I hold 50k in premium bonds so that I have some fun money to invest in a proper crash. Other than that and not including my DB pension and P2P (all being rebalanced into equities) I’m 100% equities While I agree with almost all of what you say, and follow a very similar equity strategy, I think it's too early to state that "equities beat P2P". The long term average return from global equities is ~5%. I'm expecting my P2P investments to beat that (tin hat is firmly in place). I've only been investing in P2P for a little over 2 years, but my XIRR so far is ~7%. I realise that it's too early to determine a long term average, but I believe that my current returns are somewhat understated due to many of my loans not paying returns until maturity. Looking through my loans, I expect the unrealized gains to outweigh the unrealized losses. I'm happy to have a roughly 70/30 split between S&S and P2P. Having written that, I suppose it proves that I'm not that convinced that my P2P investments will beat my equities or it would be the other way round! Ever the hypocrite. I also keep at least a year's living expenses in cash and bonds. It's actually more like 2 years currently, but I'm trying to reduce this by increasing my investments in the safer end of the P2P scale, mainly through the rolling withdrawal technique on the AC and Loanpad notice accounts, but also by increasing investments I lower paying loans that I wouldn't otherwise have considered. I'm very well diversified in my P2P investments and am lucky enough to have avoided any serious losses from the failed/failing platforms. I find P2P to be much more rewarding from an enjoyment point of view. I also think it's easier to make a difference by putting effort in to P2P than it is in S&S, at least it seems to for me. I have great sympathy for those that have been caught by the fraudulent borrowers and platforms that we should have been better protected from, but I feel that the general gloom regarding P2P is a little over done.
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hazellend
Member of DD Central
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Post by hazellend on Mar 4, 2020 23:43:26 GMT
So this correction hasn’t amounted to much. For those who cashed out or were waiting for lower prices, your time may come. My advice, as always, is to choose an asset allocation that matches your risk tolerance. We have seen 2 crashes of 50% this century so I use that as a worst case scenario if you are 100% equities (still beats P2P!), If you are fully in cash or holding off investing because you are worried about a crash, then keep a higher percentage of your assets in gov bonds/cash to suit your reduced tolerance/ability to take risk. Then just buy and hold no matter what the market is doing. Stick to index investing. The evidence is clear that this strategy will outperform almost all amateur and professional investors after costs in the long term. Ignore all media and expert commentary on the markets. For all those who are still in the wealth accumulation phase of life (including myself) an equity crash is a blessing in disguise. My naught market timing secret is that I hold 50k in premium bonds so that I have some fun money to invest in a proper crash. Other than that and not including my DB pension and P2P (all being rebalanced into equities) I’m 100% equities While I agree with almost all of what you say, and follow a very similar equity strategy, I think it's too early to state that "equities beat P2P". The long term average return from global equities is ~5%. I'm expecting my P2P investments to beat that (tin hat is firmly in place). I've only been investing in P2P for a little over 2 years, but my XIRR so far is ~7%. I realise that it's too early to determine a long term average, but I believe that my current returns are somewhat understated due to many of my loans not paying returns until maturity. Looking through my loans, I expect the unrealized gains to outweigh the unrealized losses. I'm happy to have a roughly 70/30 split between S&S and P2P. Having written that, I suppose it proves that I'm not that convinced that my P2P investments will beat my equities or it would be the other way round! Ever the hypocrite. I also keep at least a year's living expenses in cash and bonds. It's actually more like 2 years currently, but I'm trying to reduce this by increasing my investments in the safer end of the P2P scale, mainly through the rolling withdrawal technique on the AC and Loanpad notice accounts, but also by increasing investments I lower paying loans that I wouldn't otherwise have considered. I'm very well diversified in my P2P investments and am lucky enough to have avoided any serious losses from the failed/failing platforms. I find P2P to be much more rewarding from an enjoyment point of view. I also think it's easier to make a difference by putting effort in to P2P than it is in S&S, at least it seems to for me. I have great sympathy for those that have been caught by the fraudulent borrowers and platforms that we should have been better protected from, but I feel that the general gloom regarding P2P is a little over done. I loved P2P. It was the unethical behaviour of the P2P companies that ruined it (Lendy and Coll in particular). Personally, I’m getting out and won’t be back as I can’t trust any P2P companies anymore (except ablrate, but I think that may just be survivorship bias)
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Post by Ace on Mar 4, 2020 23:54:03 GMT
While I agree with almost all of what you say, and follow a very similar equity strategy, I think it's too early to state that "equities beat P2P". The long term average return from global equities is ~5%. I'm expecting my P2P investments to beat that (tin hat is firmly in place). I've only been investing in P2P for a little over 2 years, but my XIRR so far is ~7%. I realise that it's too early to determine a long term average, but I believe that my current returns are somewhat understated due to many of my loans not paying returns until maturity. Looking through my loans, I expect the unrealized gains to outweigh the unrealized losses. I'm happy to have a roughly 70/30 split between S&S and P2P. Having written that, I suppose it proves that I'm not that convinced that my P2P investments will beat my equities or it would be the other way round! Ever the hypocrite. I also keep at least a year's living expenses in cash and bonds. It's actually more like 2 years currently, but I'm trying to reduce this by increasing my investments in the safer end of the P2P scale, mainly through the rolling withdrawal technique on the AC and Loanpad notice accounts, but also by increasing investments I lower paying loans that I wouldn't otherwise have considered. I'm very well diversified in my P2P investments and am lucky enough to have avoided any serious losses from the failed/failing platforms. I find P2P to be much more rewarding from an enjoyment point of view. I also think it's easier to make a difference by putting effort in to P2P than it is in S&S, at least it seems to for me. I have great sympathy for those that have been caught by the fraudulent borrowers and platforms that we should have been better protected from, but I feel that the general gloom regarding P2P is a little over done. I loved P2P. It was the unethical behaviour of the P2P companies that ruined it (Lendy and Coll in particular). Personally, I’m getting out and won’t be back as I can’t trust any P2P companies anymore (except ablrate, but I think that may just be survivorship bias) Totally understandable. Twice bitten etc. But it's a bit of a shame to be put off something you "loved" because of a couple of bad eggs. I agree with you on ABLrate, one of my favourites, but very much at the higher end of the risk scale. There are plenty of other lower rate/risk platforms IMHO. Anyway, good luck with your escape.
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easynow
Member of DD Central
Popcorn anyone?
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Post by easynow on Mar 5, 2020 9:30:00 GMT
Just looked at BT currently trading at £1.37 per share. The dividend on that is around 11%. And regardless of how popular mobiles are vast majority of homes still have landlines and their fibre optic network in the uk is still popular. Yes, but expect that to drop by 30% in 2021, do your research.
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rogedavi
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Post by rogedavi on Mar 5, 2020 10:07:46 GMT
Its at times like these that I like to read back through the old Livermore quotes
"Do not anticipate and move without market confirmation—being a little late in your trade is your insurance that you are right or wrong.” “Go long when stocks reach a new high. Sell short when they reach a new low”. “Trade only when the market is clearly bullish or bearish”
In other words, making sure you are on the right side of the trend is far more important then cherry picking the highs and the lows. Simply because drawdowns in bear markets can be of the order of 40-50% whilst bull markets can increase your investment 300-1000% over a decently long time frame. When you look at it that way gaining/losing 5% is really irrelevant.
There are a lot of headwinds currently - Pandemic, EU banking/funding crisis looming (repo crisis late last year was a canary in the coal mine), Colonel Sanders (aka American Corbyn) potentially getting into the white house, US civil unrest (election aftermath). Personally I've participated in this bull market for most of the last decade I sold the top to the day recently (more by luck than judgement as I happened to be transferring brokers), and am staying out until new highs are made and the bull trend is confirmed to resume.
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r00lish67
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Post by r00lish67 on Mar 5, 2020 11:39:52 GMT
In other words, making sure you are on the right side of the trend is far more important then cherry picking the highs and the lows. Simply because drawdowns in bear markets can be of the order of 40-50% whilst bull markets can increase your investment 300-1000% over a decently long time frame. When you look at it that way gaining/losing 5% is really irrelevant. Thing is, by that logic you'd have sold out on Dec 24th 2018, after the market fell 8% in just a couple of days. It then rose sharply right afterwards and by 20%+ through 2019. When would you have bought back in? Even if you bought straight back in then you'd be down a few % plus trading costs, but might you have perceived it as a dead cat bounce and waited longer? Most of the time a correction is just that, a blip that is quickly reverted. Whilst we can all speculate, we've no way of knowing. It's easy to retrospectively argue that that time was different, but at that point there were all sorts of pundits predicting the end of the bull market for a whole host of convincing reasons. edit: FWIW, putting my speculator's hat on, I agree with much of what you say and I wouldn't be at all surprised if they fall significantly. Although I also wouldn't be too surprised to see them rise as they have done in the last few days (until today it seems). Markets are nuts.
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IFISAcava
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Post by IFISAcava on Mar 5, 2020 11:47:36 GMT
In other words, making sure you are on the right side of the trend is far more important then cherry picking the highs and the lows. Simply because drawdowns in bear markets can be of the order of 40-50% whilst bull markets can increase your investment 300-1000% over a decently long time frame. When you look at it that way gaining/losing 5% is really irrelevant. Thing is, by that logic you'd have sold out on Dec 24th 2018, after the market fell 8% in just a couple of days. It then rose sharply right afterwards and by 20%+ through 2019. When would you have bought back in? Even if you bought straight back in then you'd be down a few % plus trading costs, but might you have perceived it as a dead cat bounce and waited longer? Most of the time a correction is just that, a blip that is quickly reverted. Whilst we can all speculate, we've no way of knowing. It's easy to retrospectively argue that that time was different, but at that point there were all sorts of pundits predicting the end of the bull market for a whole host of convincing reasons. edit: FWIW, putting my speculator's hat on, I agree with much of what you say and I wouldn't be at all surprised if they fall significantly. Although I also wouldn't be too surprised to see them rise as they have done in the last few days (until today it seems). Markets are nuts.Hence decide an allocation, buy and hold, and turn off the news for 20 years. Easy to say, difficult to do.
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