Is anyone panicking yet ?

[1nvest]

A new paradigm. Previously those that could legally 'counterfeit' money, print/spend money - that devalues all other notes in circulation in the process, instated rules controlling just how far that could be pushed. Now however the ECB/US ...etc. have opted to lighten up on those restrictions. So they can print unlimited amounts to buy up most bonds, pushing prices higher, yields lower, and inducing others to rebalance out of higher priced/valued bonds into other assets such as stocks, pushing stock prices higher. How far might that extend ??? The US Fed for instance now has the authority to buy up to 70% of each/any bond series, potential $8Tn of new money being injected into the markets (higher prices). Wouldn't be surprised if the EU went as far as printing to buy up all assets, stocks, homes ... a grand nationalisation. How far before others might say 'enough' ... flight the Euro and induce a subsequent run (hyperinflation) event ???

Before we had banks playing the heads they win, tails the taxpayers bail them out gameplay, now we have countries playing the exact same game - but massively more scaled up. Something somewhere is at risk of snapping, and when it does things will tend to happen very quickly.

History suggests that the next phase will be Yield Curve based controls. Rather than printing $x billions to buy bonds, they'll instead print enough to keep bond yields at a particular 'target' level. Often the mere declaration of such intent will have the markets pricing bonds to that yield without the Fed having to print/buy that much bonds themselves. But when the Fed is both the largest holder and buyer ??? Reminds one of the story of the guy who bought some shares one day, and on seeing the price rise opted to buy more the next day, and again on seeing the price rise opted to buy more the next day ... repeatedly, until he decided to sell to take profits and the market maker said 'sell? Who to?'.

Can what more normally would be considered as being a massive Ponzi system sustain, and how long for? Of all, the EU is one of the greatest culprits, and is perhaps at risk of being the first to endure the flight. But such controls/manipulation can sustain for ages. The hyperinflation event hitting one/more could be days away, weeks, months, years or decades. Wait 'out of the market' and your missed opportunity costs could be more than the losses endured during the 'correction'. Better to be more neutral, 50/50 stock/gold instead of all stock or all gold for instance. Whilst being totally right is nice, that risks having been totally wrong, diversification and being half right/half wrong is broadly a better stance overall. And not being concentrated into any one single currency. UK home, US stock, gold (global currency and commodity) ... ancient Talmud advocated style, is my preferred choice.

[WickedLester]

I thought I'd resurrect this thread that I started during the pandemic crash as we appear to be facing an even more uncertain future at the moment.

How are we all faring in the current market? I think I am now about 20% down from this year's high but am remaining invested as I don't believe a recession will drive any of my investments to the wall as most of them are profitable and have strong balance sheets with net cash. I don't know what the outlook for interest rates and inflation is now that the BofE have announced yet more QE to prop up the bond and currency markets (isn't this even more inflationary?).

I have started saving more to invest at what I think will prove to be keen prices in a couple of years time but am in no rush to invest more at the moment.

So what are you all doing. Are you sitting tight, or going into cash or some other asset or investing more?

[Darka]

So what are you all doing. Are you sitting tight, or going into cash or some other asset or investing more?

Down -1.4% on the year so far (retirement funds) and -3.7% Net Worth (some of this loss was the purchase/install of a new bathroom and some home maintenance).

I will have been retired 1-year next month (retired at 52) and that year has included a whole host of economic/financial turmoil/war and pretty much everything else that can go wrong

So, I'm mostly doing nothing and enjoying my retirement, I bought some more Merchants Trust shares today and will continue to buy other investment trusts when I have funds to do so as I will continue to invest in my SIPP until I can access it in just under 2 years' time.

Wife's birthday tomorrow so we've got 4 'dates' planned to do various things including lunch, dinner, etc which will be fun, and I will just ignore the market as I try to do most of the time.

We have most of the income we need for next year already (saving this year's dividends for use next year) and looking at a fairly solid increase in income hopefully depending on how dividends play out for the rest of this year.

Also rebuilding some of the cash we spent on the bathroom, etc. and boosting holiday funds for next year and boosted our premium bonds a little today too.

regards,
Darka

[flyer61]

Down 7% this year.....cushioned by being very long the USD. Up to recently almost breakeven. Biggest three direct equity holdings MSFT, PM and PEP (Microsoft, Philip Morris and Pepsico). No panic at all as have seen so many calamities over the years that it is best to ride through them. Going to have to look under LGENs bonnet a little more as it obviously couldn't cope with the sudden and substantial gilt sell off. ULVR and Diageo holding up well.
Income will be the highest ever this year due USD strength.

Have bought a bit of income today - NBMI, and BIPs a day or two ago.

Thinking of buying more CLDN.

[Bouleversee]

Are you talking about capital value or total return?

[Itsallaguess]

So what are you all doing?

Are you sitting tight, or going into cash or some other asset or investing more?

I'm still working, and that's very important when it comes to my approach to things.

Whilst it's always interesting to hear how different people manage their investments, I think one of the key aspects to appreciate initially is just where individuals might be in their life, in terms of potentially still being employed, or perhaps being retired and living off their investments and perhaps pensions too.

Those are likely to be key drivers for people, and without knowing a little more about personal-context when it comes to responses to questions like this, I think it's difficult to fully appreciate how and why different people might take different approaches...

With that said then, and with me still working, I'm happy to remain fully invested with my 'already-invested' holdings, and tend to manage my own risk appetite by using a separate cash float. This is made up of regular savings from paid employment, as well as dividends accrued from current investments.

I'll tend to always have some level of minimum cash-float, where above that I will then drip-feed additional accrued cash into the market once the account-specific cash level reaches an amount that's sensible in terms of associated trading costs, which is usually around £2000. That's what I would call me 'normal running' configuration.

When there seems to be periods of market volatility or unusual 'issues', I am happy to stop those periods of regular investment and will allow my cash float to grow to a much higher level. I should point out though, that by doing this I'm actually much more interested in the personal psychological benefits of doing that than I am about the potential to make any sort of 'improved returns' from that growing cash float. This is a *key driver* for me, as over the years and through a number of highly-volatile market periods, doing so has *definitely* made it much easier for me to stay 'fully invested' with my 'already invested' holdings, and so even any potential for 'lost earnings' on that growing cash float is absolutely insignificant to me when compared to the primary requirement, which is to be able to calmly stay fully invested with my existing portfolio...

At the current time, I've actually been growing that cash float for a while now, and it's now reached a level where I'm actually happy to maintain that much higher (than usual) cash float, whilst now allowing future additional accrued cash (wages and dividends) to step back into 're-investment mode' once those fresh funds have reached a sensible 'investment packet' level of around £2000, so I'm currently in the position of never actively selling down existing holdings, but having quite a substantial cash buffer available if the market were to absolutely tank, but also now being happy to continue drip-feeding capital back into the market over and above that enlarged cash-buffer level...

Having written the above, I can see how it might feel a little overcomplicated, but having cycled through the various stages a number of times over the years whilst still being able to remain 'fully invested' with my existing holdings, and persistently being in a comfortable mental state with the whole process, that for me is the single most important thing, over and above any potential granular returns that might or might not be lost whilst managing those different cash-float levels.

Mental comfort is a huge driver for my approach to investment, and especially so as my investments have grown in value over the years, and so finding a personal process that suits my investment personality has been very important to me, and I'm happy to say that the above process does just that...

Cheers,

Itsallaguess

[flyer61]

Boulversee

That is from the highest capital value my pot has ever reached.

Bought more Caledonia (CLDN) this morning.

[tjh290633]

I'm still reinvesting dividends if I don't need the cash for anything else. That are still mostly increasing from last year's levels, with some very high payments from the miners. I think that I am getting better value from those dividends than I would from switching into cash or any other medium.

With rising interest rates, gilts are on a hiding to nothing. Cash is still not attractive.

TJH

[Boots]

I was about 10% down, and quite sanguine. Rebalancing back to the asset allocation as required.

Then the mini-budget happened. About 15% down now, and rather unhappy about the current administration, but that is not the point of this thread.

Not panicking, but more stressed than I would like. The ancient Chinese curse comes to mind, "May you live in interesting times", I should quite like the times to get a little less interesting now.

[absolutezero]

4.5% down from my all time high.
Bought SWDA iShares global tracker this morning.

Panicking? No. I will just continue to drip feed money regularly into the market.
Got 15/20 years until retirement.

I'm more bothered about a Labour government raiding my ISA and SIPP than market movements.

[Adamski]

.. more bothered about a Labour government raiding my ISA and SIPP than market movements.

I'd expect wealth tax would exclude pensions, but could be wrong! Certainly be politically more difficult to raid pensions.

[Adamski]

Not panicking either. We're in a bear market this year, expect it to be a negative year with war in Europe and number of other crisis. Shouldn't change long-term plan except no harm in diversifying more.

[absolutezero]

.. more bothered about a Labour government raiding my ISA and SIPP than market movements.

I'd expect wealth tax would exclude pensions, but could be wrong! Certainly be politically more difficult to raid pensions.

Didn't stop G Brown