Crap January?

[YeeWo]

I've missed the real disasters of Capita and Carillion, nonetheless I'm still down 3.73% for the month! While I totally appreciate many people are Income rather than TR focused, how's everybody else done in January?

[swill453]

Down 1.4%, from what was of course an all time month-end high in December.

Scott.

[SalvorHardin]

Down almost 3%, from an all-time high on 31st December. I'm very much a total return investor, with a portfolio yielding roughly 1.4% (if anything I'm the near opposite of a HYP investor).

This isn't a surprise; I periodically have bad months, far worse than the market, because of my over-concentration in certain sectors - particularly North American railroads, New York real estate and consumer goods. The near 5% fall in the US dollar against the pound has been the biggest contributor because I am heavily invested in America (and Canada).

Am I bothered? Not really. Falls like this come with the territory and I've got used to it.

[dspp]

Down about 2% from mid-month, and that includes Carillion (most of which went long ago mind you). I don't know what the end-year number was because I don't look that often, but for some reason the iii goings-on have caused me to keep diving in. And of course I bought some HUR which is always a reason for it to subside a little. Hey ho.
regards, dspp

[spiderbill]

And February starting even worse!
Pan African (gold miner) down 15% today, RPC down 3.4%, Shell down 2.5%, Vodafone down 4.5%.

Down about 5k in the last two weeks - double my total losses on Carillion.
What with utilities feeling the political pressure, house builders now too after the gov threatened to cancel planning permissions, tobacco getting a wave of negativity, pubs/brewing under a cloud, and Pharma possibly getting hit with Trump's latest pronouncements, it's getting hard to see where the good news is coming from.

[Urbandreamer]

I'm down 5% and it's wearing. The thing is that the timeing is starting to make me feel uncomfortable. If the same happened April-July I'd shrug and say "well this happens most years". The fact that it has started in Jan is triggering Bearish thoughts in me.

I'm letting dividends and SIPP contributions remain in cash and seriously considering "taking some money off the table".

The next step is trying to identify alternatives to equities and cash. I don't fancy bonds, gold or Bitcoin.

[GeoffF100]

The 360 day implied volatility for the FTSE 100 was 16% last year, which is historically low. This equates to a one month volatility of 16% / sqrt(12) = 4.6%.

The change in the FTSE 100 last month was almost exactly 2% from 31 Dec 2017 to 31 Jan 2018 according to Google:

https://www.google.co.uk/search?rlz=1C1 ... oLa4BA_5:0

The FTSE 100 hardly moved by historical standards.

[richfool]

Well it looks like a correction could be underway, - in the US anyway. This evening, after the UK markets closed, the Dow Jones index went on to fall 665 points (2.54%), and the Nasdaq fell 144 points (1.96%). That was after previous falls over the last couple of days. That should unsettle Asian and UK markets on monday morning.

[DiamondEcho]

-127k in January.
An unexpectedly crappy month, when I had half a weary eye out for New Year optimism.
I suspect said optimism is delayed... but isn't that a simple comfort to think? The geo-political background seems to be 'straight-lining' these days, in fact it's verging on boring. So I think ANY story is blown out of proportion and causes volatility. There are no wars, invasions, threats of major governments toppling, yet the markets are acting in such a delicate/sensitive way. Heads down and keep on going?

[GeoffF100]

Not good if you're looking to sell shares.

Keep a sense of proportion. The market is only down 2% on the month. It could be half its present value in a few months time.

So I think ANY story is blown out of proportion and causes volatility.

But volatility is pretty much at a historical low.

The plan is to keep saving, dollar cost averaging a giant position of Vanguard LS100 no matter what, and add a tilt to small companies exposure via FCS and HSL, emerging markets via VFEM, and quality via Fundsmith.

LS100 is expensive if you have a giant position. Everybody seems to think that it is a good idea to overweight small companies and emerging markets. You rarely profit by following the dumb money. What is "quality", and how do you identify it? Fundsmith has high charges and has been lucky. Its luck will run out.

[Dod101]

I am down 2.5% on the month, having avoided any disasters. There is I think a lot of good common sense on this Board. Goodness only knows what will be the reaction if we do have a proper 'correction'.

No one can judge a portfolio on one month's results, how about five years?

Dod

[Steveam]

I’m not worried about the drop and have lived through several pretty large corrections. A drop of 20 or 30% (perhaps more) will happen and it’s pretty uncomfortable when it does happen. To be honest I find relatively quick, large drops easier to deal with than the slow multi-year grinds downwards. The result may be the same but I find the grinding downwards depressing.

There are a number of techniques for coping such as imagining the worst, being clear (in advance) about ones objectives and responses to events. Having lived through a few rough times my advice is to distinguish between real threats to your lifestyle and psychological discomfort. You can deal with real threats by taking actions (such as having cash buffers, diversification, de-risking, buying an annuity, etc). Psychological discomfort is about knowing yourself - how will you react when the market is down 30% AND might well drop another 30%, how will you react after month after month after month of the market slowingly grinding downwards?

There is a great tendency to recency bias - try to keep a sense of perspective (this is helped by good record keeping). Even after horrible drops are you better off (whatever that means: capital or income or some combination) than you were 1, 2, 5 years ago?

I’m 3.3% down on peak capital.

Best wishes,

Steve

[andyalan10]

To answer YeeWo, the original poster, down 1.6% in January, and the FTSE down 2%.

As mentioned earlier in the thread, volatility has been almost non-existent recently and I regard that as a bad thing.

Even of you are a steady state investor neither adding or reducing total exposure, volatility gives you the opportunity to rebalance.

In answer to spiderbill's comment about it's hard to see where the good news is, I think there is a tendency on the Fool boards at the moment (particularly around HYP) to only talk about bad news.

From my 30 share portfolio the following rose in January - Aviva, Man, Easyjet, Lloyds, Rockhopper, Sainsbury's, Soco. So examples from financials, airlines, oil and food retailers.

I prised open the piggy bank for some more Imperial Brands on Thursday, and will buy some more stuff if the markets fall further, if they go back up I'll sell something.

Andy

[GeoffF100]

I am a poor judge of quality, but Terry Smith literally wrote the book on how to spot junk. His record is outstanding. I think I am right to outsource the quality arbitration to him. Or maybe he is just freakishly lucky in which case all the more reason to take a risk with him. You too can buy outlandish luck like his for 1% per annum, which I think is well worth it.

LS100 is cheap as chips.

Why small? Because there are limits to growth for any big multinational. And you don't want to set out to make a forest of money purely by buying in mature oaks. You get the forest by bringing In saplings and acorns.

Why emerging? I work in an emerging market and can see the writing on the wall. The old world is not going to persist as these nations emancipate their economies.

I am not willing to pay anything for luck.

LS100 is more expensive its constituents.

When small caps are popular, they sell at an inflated price.

I hold a market weighting in emerging markets, but I would not significantly overweight them. They are likely to grow more rapidly than the developed markets, but, historically, stagnant markets usually gave shareholders better returns than growing markets.

[GeoffF100]

Warren Buffett has a couple of rules, 1. never lose money and 2. never forget rule 1. i.e. if you can't sell for more than what you paid, then don't sell (might as well just keep it and perhaps sell at another time when it is in profit).

I believe he sold out of Tesco.

[dspp]

A strategy I've used in the past involves calculating a log stochastic measure. Bottom = book value, current = current price/value, top = twice the current price. The log stochastic calculation will have you all in at the bottom, all out at the top, and provide a indicator of current appropriate levels of stock and cash.

I'm not saying you are wrong, but is not what you are suggesting just a mathematically-phrased version of charting ?

regards, dspp

[SalvorHardin]

Warren Buffett has a couple of rules, 1. never lose money and 2. never forget rule 1. i.e. if you can't sell for more than what you paid, then don't sell (might as well just keep it and perhaps sell at another time when it is in profit).

Like many of Buffett's "rules" he doesn't follow it strictly. For example, Berkshire Hathaway realised heavy losses on ConocoPhillips back in 2009. And of course Berkshire Hathaway's losses on Tesco are well-known. And recently he's been realising losses on IBM.

Rather it is about focusing investors' attention and avoiding the mindset where you lightly enter into (and out of) investments. So you do your due diligence carefully and you don't sell up simply because the price has fallen. It certainly isn't intended to be "long term buy and forget and ignore everything that happens".

https://www.cnbc.com/2017/02/23/why-war ... sting.html

It's similar to his idea that investors should approach investing over a lifetime as if they had a twenty-hole punch card; every investment uses up one slot and when you've no slots left you cannot make any more investments.

https://www.fool.com/investing/general/ ... nches.aspx

[melonfool]

Well, I was too busy in December to do any reckoning but I did it end Nov and end Jan and between those two dates I am 1% up (that is everything in the ISA, value of equities plus received dividends).

It's not quite like-for-like as I bought a fund for £1k in Nov, with accumulated dividends.

Mel

[gbjbaanb]

I'll happily say I am 3.7% down, but that's not January, that's from my peak which was sometime in August.

I say happily because this is nothing new, I've been keeping a bit of a reckoning, and in 2016 China said it wasn't going to grow as fast as before and I lost £20k in January (I remember as I was thinking of selling up loads... in Feb sigh, in readiness for volatility over Brexit), and last year my net wealth dropped by a fair bit in January too.

In both cases things recovered strongly. Now I'm not sure the same will happen here too or whether this is the start of the big crash everyone's been predicting since they started looking at pretty pictures of graphs.

today is pretty bad, but again.. it goes up again. it always does, just a matter of time.

[Urbandreamer]

today is pretty bad, but again.. it goes up again. it always does, just a matter of time.

Well it always has in the past. Though as remarked in this thread
viewtopic.php?f=31&t=9934
in the past some people have had to wait over 20 years to get back to where they started.

FWIW, I am NOT predicting that. What I AM pointing out is that what has happened in the past could, at some point, happen again.