Prediction about the next crash

[UncleEbenezer]

Thing about the Guardian (and of course all its peers) is they have column inches to fill. Relentlessly, every day. You can rely on them to predict several hundred of every 10 market crashes.

Even if you do predict a crash, you don't know how it'll play out. In 1992 the government of the day gave in and cut our losses; in 2008 they refused to cut losses and did "whatever it takes". I avoided high-risk high-interest savings like Icesave in 2005-8, without knowing that the idiots then in power would not merely drive us off a cliff but then raid the public finances to bail out the greedy. Let alone the big one - the money-printing that prevented a meaningful correction in house prices and priced me out of an annuity in my lifetime.

And now we have an election where all outcomes look financially grim and the least bad outcome seems to be another hung parliament where neither of the principal loonies can enact their most damaging fantasies.

[simoan]

I heard Rana Foroohar on the Today programme this morning. Nice plug for her book but she said nothing of any substance. I guess it's just a case of who you know, not what you know. I'm sure there are many more deserving authors who could use a nice 5 minute promotional slot on Radio 4 during prime time.

All the best, Si

[Hariseldon58]

After 30 years of investing I now realise I don't KNOW very much more than anyone else, I cannot control or influence it, I can control what I do though, without any oversight.

Having achieved FIRE in 2007 I have chosen a diverse portfolio of international investments with an equity bias, with some diversifiers and a pot of cash to last out a period of time when there is market disruption. I ensure that my costs are incl brokerage are around 0.2% and I minimise taxes, I can control these things.

When I was building my investments I invested month in and out, I was buying in December 1999 at market highs and at the market lows of 2002-2003, I had a good result.I survived 2008 -2009 and hope to emerge from the next market collapse, whenever it is, because I did not panic, I had a plan in the event of bad times.

No one can reliably time markets, you can try and you may be lucky...or not, why bother trying ? What edge have you got ? I have finally fully settled on a lazy portfolio, which I will leave alone apart from very occasional rebalancing and reinvesting of dividends.

(It's very tempting to do something, I have succumbed to temptation in the past....)

[LooseCannon101]

After 30 years of investing I now realise I don't KNOW very much more than anyone else, I cannot control or influence it, I can control what I do though, without any oversight.

Having achieved FIRE in 2007 I have chosen a diverse portfolio of international investments with an equity bias, with some diversifiers and a pot of cash to last out a period of time when there is market disruption. I ensure that my costs are incl brokerage are around 0.2% and I minimise taxes, I can control these things.

When I was building my investments I invested month in and out, I was buying in December 1999 at market highs and at the market lows of 2002-2003, I had a good result.I survived 2008 -2009 and hope to emerge from the next market collapse, whenever it is, because I did not panic, I had a plan in the event of bad times.

No one can reliably time markets, you can try and you may be lucky...or not, why bother trying ? What edge have you got ? I have finally fully settled on a lazy portfolio, which I will leave alone apart from very occasional rebalancing and reinvesting of dividends.

(It's very tempting to do something, I have succumbed to temptation in the past....)

I agree wholeheartely with this post. It is impossible to control the markets, but it is possible to control one's actions. A strategy of pound-cost averaging by the monthly purchase of a low-cost, highly-diverse world equity fund and dividend re-investment, has worked for me over the past 20 years. A study of financial markets over long time periods, listening to the legendary investors e.g. Warren Buffett, and being disciplined should give you an edge over the average retail investor.

[Wasron]

No one can reliably time markets, you can try and you may be lucky...or not, why bother trying ? What edge have you got ? I have finally fully settled on a lazy portfolio, which I will leave alone apart from very occasional rebalancing and reinvesting of dividends.

(It's very tempting to do something, I have succumbed to temptation in the past....)

Hari,

I’m pretty sure I don’t have an edge, but enjoy investing as a hobby that should allow me to retire at 55.

I wasn’t investing in 1999, but if I was I wonder if I would have bought into the internet boom.

FAANG stocks are seen by some as a paradigm shift, as winner takes all tech stocks. I’m not convinced that I agree with that analysis, and with lots of money tied up in global trackers there’s not much I can do to avoid them without explicitly trying to avoid them.

I originally posted the article to generate some discussion of the theoretical risk, and there’s been less of that than a dismissal of the author, but I will be following what you suggest, investing across a broad spectrum every month. In the Uk at the moment you’d need to consider you have an edge to do much else

Wasron

[tjh290633]

Wasron, I was investing in 1999 and studiously avoided any outfit which didn't pay dividends. Consequently I decoupled from the index at that time, as a chart comparing my unit price and the index indicates.

TJH

I’m pretty sure I don’t have an edge, but enjoy investing as a hobby that should allow me to retire at 55.

I wasn’t investing in 1999, but if I was I wonder if I would have bought into the internet boom.

FAANG stocks are seen by some as a paradigm shift, as winner takes all tech stocks. I’m not convinced that I agree with that analysis, and with lots of money tied up in global trackers there’s not much I can do to avoid them without explicitly trying to avoid them.

I originally posted the article to generate some discussion of the theoretical risk, and there’s been less of that than a dismissal of the author, but I will be following what you suggest, investing across a broad spectrum every month. In the Uk at the moment you’d need to consider you have an edge to do much else

Wasron

[77ss]

....
I wasn’t investing in 1999, but if I was I wonder if I would have bought into the internet boom.....
Wasron

When the world and his wife are talking about certain shares, be very cautious.

Or - 'by the time I've noticed a bandwagon - I've missed the boat'.

I wasn't very active at the period, but I clearly remember deciding that internet stocks were bargepole territory for me. Everybody at my workplace seemed to be talking about them.

[Hariseldon58]

@wasron

I’m pretty sure I don’t have an edge, but enjoy investing as a hobby that should allow me to retire at 55.

I wasn’t investing in 1999, but if I was I wonder if I would have bought into the internet boom.

FAANG stocks are seen by some as a paradigm shift, as winner takes all tech stocks. I’m not convinced that I agree with that analysis, and with lots of money tied up in global trackers there’s not much I can do to avoid them without explicitly trying to avoid them.

I originally posted the article to generate some discussion of the theoretical risk, and there’s been less of that than a dismissal of the author, but I will be following what you suggest, investing across a broad spectrum every month. In the Uk at the moment you’d need to consider you have an edge to do much else

I think it's the nature of forums that threads take on a life of their own, we all tend to one to expand on our hobby horses !

The tech bubble was visible and I was heavily into UK Equity Income Income Trusts then, but the whole market suffered in the aftermath. The GFC had a much wider impact than everyone ( well virtually everyone..) could have anticipated.

Regards the FAANGS, who really knows ? World tracker plus a supplement of World tracker High Yield Dividends, gives a value tilt plus selects only the more substantial dividend payers, with a bias to the larger holdings and some other diversifiers is my choice for a do nothing approach.

[Alaric]

but the whole market suffered in the aftermath.

A mostly domestic effect perhaps, but did the near collapse of Equitable LIfe have an effect? Not directly, but the FSA did crack down on the use of equities as backing for insurer's with profit funds, perhaps leading to lack of demand for equities, forced sales and replacement by bonds. At around that time there was also a strong lobby that defined benefit pension funds shouldn't be in equities either.

[Hariseldon58]

@Alaric

A mostly domestic effect perhaps, but did the near collapse of Equitable LIfe have an effect? Not directly, but the FSA did crack down on the use of equities as backing for insurer's with profit funds, perhaps leading to lack of demand for equities, forced sales and replacement by bonds. At around that time there was also a strong lobby that defined benefit pension funds shouldn't be in equities either.

The market sell off in early 2000 was initially more local, but by March 2000 US tech hit its peak and the markets fell steadily and heavily world wide through 2002 -2003.

I remember Equitable Life well, I had small pension with them, the news broke on a Friday and I had transferred my holding the same day to a unit linked one with Norwich Union taking a small hit, I learnt a lesson there.... sell on the rumour !!!!!