|
Post by rgs2001uk on Mar 18, 2020 20:07:20 GMT 7
Inspired by CM, and worthy of a thread of its own, after everything what now?
Too be honest, I dont know, what this meltdown has confirmed is what I already knew,
a, cash is king
and
b, if you cant take the heat get out of the kitchen.
A, cash is king, whether in the form of a monthly pay cheque, pension cheque or pure cash savings.
B, we have had newer members coming here seeking financial advice, they will be on a different learning curve to others, this isnt my first rodeo, for others it will be, and I can well understand if their confidence is shot. they may well seek other investment avenues, eg, property, gold etc etc, not paths I would follow, but understandable.
No one, and I mean no one saw this coming, the best we can hope for is to insulate ourselves and hope we have enough cash to keep us going until sanity prevails.
CM tossed some numbers up elsewhere, for me as follows,
Alliance Trust account, down, 33%
Stockbroker account, down 27%
Overall, down 30%
These figures are based on previous highs before the meltdown, overall, I am still up on initial purchase price.
As I have mentioned before, those of us in shares, are always the first to be hit, the aftershocks are now being felt (for brits) exchange rates, liquidity, etc etc. Personally I know of people who have now had to reschedule their retirement dates, not for financial reasons, because of their destination.
Any input from the sage of Bolton, welcome, 55555.
The botton line, for me, the new car wont be purchased this year.
|
|
AyG
Crazy Mango Extraordinaire
Posts: 5,871
Likes: 4,555
|
Post by AyG on Mar 18, 2020 20:40:11 GMT 7
Cash is never king. Its value is eroded each year by inflation. It's the investment solution to nothing.
It's not so much about "can't take the heat", but keeping a cool head.
I was rather amused by a circular email from a finance-related consultancy that I follow (The Lang Cat) that I received earlier today. It included (tongue in cheek) the number for The Samaritans (apparently 116 123 from the UK if you need it). Perhaps the number for Dignitas might have been more helpful.
|
|
|
Post by rgs2001uk on Mar 18, 2020 21:21:28 GMT 7
^^^ poor grammar on my part, I mean at this moment in time, I am using cash brought over here at 60+ baht, I aint taking cents on the dollar to fund myself.
Goes back to, after the goldrush, how much % age wise will you keep in cold hard?
Personally, I have enough to keep me going for X years, after that all bets are off.
|
|
|
Post by rgs2001uk on Mar 30, 2020 21:24:26 GMT 7
FYI, a hard rains a gonna fall, enough of his bobness, makes me laugh when I read the crap posted elsewhere about, divis and such stalwarts like BHP, Rio Tinto, Royal Dutch, BP, and ATT&T, cop for some of this, read the bit about divis. www.rathbones.com/knowledge-and-insight/quarterly-investment-update-novel-danger-and-response
|
|
|
Post by rgs2001uk on Mar 31, 2020 21:01:29 GMT 7
|
|
|
Post by Fletchsmile on Apr 2, 2020 17:04:58 GMT 7
Perhaps no-one saw this coming in terms of cause, i.e virus, but a crash was always going to come at some point. So that side of things isn't a surprise. I have an auto-plotted chart that I update with monthly assets data going back to 1 Jan 2000. Then draw a line of best fit thru the peaks and make a tramline (parallel on bottoms to give an idea of bands it might fluctuate in. While the timing and cause weren't foreseen the magnitude wasn't a surprise at all, and fits pretty well within expectations. (Scale removed of course ) It's ny no means perfect, but one way of developing an expectation. The impact is in line with 2008 crisis from GFC even though cause and nature different
|
|
|
Post by Fletchsmile on Apr 2, 2020 17:20:01 GMT 7
I don't see cash as king. Just that people should keep adequate cash buffers to ride it out. On top of that cash I have my borrowing facilities should I wish, to draw down on, at low interest rates (which are always lowered in recessions/ difficult times. Then on top of that some liquid assets like bonds. If I were working now, I'd be looking to add more than usual to the marekt via baht cost averging in and even adding phased lump sums, as looking back in 10 years time it will probably look top have been a good buying opportunity. Am also looking now at increasing leverage and drawing on borrowing facilities to invest though in no rush just yet. As usual, my investment trusts have fared worse than comparative unit trusts because of the difference in structure where share price on investment trusts drops more than NAV. Invetsment trusts aren't my choices for liquid assets in these circumstances as 1) there aren't decent bond ITs which are liquid 2) widening of discounts to NAV 3) often liquidity issues. They could, however, represent opportunities on buy side if I start looking in more detail at discounts. ITs often fall lower and rise higher. Now we're in the period of falling lower in a downturn Also nice is having dividen paying investments. I'm not that bothered at all in their prices. Dividends on average are less volatile than the capital side. While they may well get cut/ reduced, as a basket / portfolio they are often less volatile than capital only returns. So for me, it's all just ride it out. Always that nagging difference at the back of my mind though, that this time it could be different and may not pick up for a very long time but I have that doubt every crisis - 19987, 1997, 2008 etc
One small silver lining is that the the Woodford debacle caused his fund to be wound down. I've received cash on that and not re-invested it yet. As a result the disappointment fof that wind up, has cushioned a 25% to 30% fall in FTSE 250/ 100 as the money wasn't invested That's less than 2% of portfolio though
|
|
AyG
Crazy Mango Extraordinaire
Posts: 5,871
Likes: 4,555
|
Post by AyG on Apr 2, 2020 17:24:38 GMT 7
I have an auto-plotted chart that I update with monthly assets data I presume the vertical axis is linear. Is that rational? Surely it should be logarithmic, or something similar. An x points increase 20 years ago is worth substantially more than the same increase today. I'd add that if one simply looked at the last 10 years, the recent drop would be well outside the trendlines, though I think that can probably be explained by the bonkers monetary policies being pursued by various governments over this period.
|
|
AyG
Crazy Mango Extraordinaire
Posts: 5,871
Likes: 4,555
|
Post by AyG on Apr 2, 2020 17:32:10 GMT 7
Also nice is having dividen paying investments ... Dividends on average are less volatile than the capital side. I'm not a dividend investor, but have been rather surprised by the rapid drying up of dividends. Germany has said that companies that pay dividends won't get state support. The UK has leant on banks not to pay dividends. And various other companies have suspended their dividends such as DFS, British Land, Halfords, Rentokil, Dunelm, Whitbread, ITV, Kingfisher, M&S, Greggs, Card Factory, Bellway and Persimmon. Whilst investment trust dividend heroes are going to be OK for a year or so having built up reserves, UK income funds are undoubtedly going to disappoint massively and add to some pensioners' pain.
|
|
|
Post by Fletchsmile on Apr 2, 2020 18:15:12 GMT 7
I have an auto-plotted chart that I update with monthly assets data I presume the vertical axis is linear. Is that rational? Surely it should be logarithmic, or something similar. An x points increase 20 years ago is worth substantially more than the same increase today. I'd add that if one simply looked at the last 10 years, the recent drop would be well outside the trendlines, though I think that can probably be explained by the bonkers monetary policies being pursued by various governments over this period. It's linear. Just one simple tool of several. Yes rational, but no not perfect There are lots of other imperfections such as assets make up, additions / dipaosals etc etc, so it's not intended as a be all and ened all. Just a quick idea Takes a minute to adsjut the tramlines each month.
Looking at simply the last 10 years would be pointless for this exercise as 10 years doesn't capture a significant crisis/ downturn. GFC is now over 10 years ago. It doesn't cature 1997 as I didn't start collecting the same data back then. The whole point is to capture a downturn and at least a full cycle. Last 10 years only has neither crisis/sigifcant downturn nor a full cycle, so wouldn't help at all in giving any idea of what impact a crisis might have
|
|
|
Post by rgs2001uk on Apr 2, 2020 23:07:46 GMT 7
I don't see cash as king. Just that people should keep adequate cash buffers to ride it out. On top of that cash I have my borrowing facilities should I wish, to draw down on, at low interest rates (which are always lowered in recessions/ difficult times. Then on top of that some liquid assets like bonds. If I were working now, I'd be looking to add more than usual to the marekt via baht cost averging in and even adding phased lump sums, as looking back in 10 years time it will probably look top have been a good buying opportunity. Am also looking now at increasing leverage and drawing on borrowing facilities to invest though in no rush just yet. As usual, my investment trusts have fared worse than comparative unit trusts because of the difference in structure where share price on investment trusts drops more than NAV. Invetsment trusts aren't my choices for liquid assets in these circumstances as 1) there aren't decent bond ITs which are liquid 2) widening of discounts to NAV 3) often liquidity issues. They could, however, represent opportunities on buy side if I start looking in more detail at discounts. ITs often fall lower and rise higher. Now we're in the period of falling lower in a downturn Also nice is having dividen paying investments. I'm not that bothered at all in their prices. Dividends on average are less volatile than the capital side. While they may well get cut/ reduced, as a basket / portfolio they are often less volatile than capital only returns. So for me, it's all just ride it out. Always that nagging difference at the back of my mind though, that this time it could be different and may not pick up for a very long time but I have that doubt every crisis - 19987, 1997, 2008 etc
One small silver lining is that the the Woodford debacle caused his fund to be wound down. I've received cash on that and not re-invested it yet. As a result the disappointment fof that wind up, has cushioned a 25% to 30% fall in FTSE 250/ 100 as the money wasn't invested That's less than 2% of portfolio though
Agreed, poor choice of words, at this moment in time, I aint selling for cents on the dollar, am cashing in my cash reserves, and locking into certainty, I can get 40+ to the pommie peso on my cash reserves, How long to ride it out? Take your investment manual and toss it out the window, the times they are a changing, the old school of thought, have at least 3 or 6 months worth of savings to help you are long gone. For me personally, cash is king, I aint losing anything from my standby money.
|
|
|
Post by rgs2001uk on Apr 3, 2020 20:36:57 GMT 7
Well a little analysis today, my Alliance Trust account has dropped, 26.2%, my stockbroker account has dropped 22%, overall a drop of 23.5%, basically back to where I was 2 years ago, a paper loss, but no loss in monetary terms.
Carrying on from above post, transferred from my HSBC UK bank account cash reserves today enough to keep me going for the next year. This isnt a gloat post, for those who choose to wait before transferring cash, I hope you can get a better rate than me, for me, its all about peace of mind.
|
|
chiangmai
Crazy Mango Extraordinaire
Posts: 6,233
Likes: 5,242
|
Post by chiangmai on Apr 4, 2020 10:56:26 GMT 7
Well a little analysis today, my Alliance Trust account has dropped, 26.2%, my stockbroker account has dropped 22%, overall a drop of 23.5%, basically back to where I was 2 years ago, a paper loss, but no loss in monetary terms. Carrying on from above post, transferred from my HSBC UK bank account cash reserves today enough to keep me going for the next year. This isnt a gloat post, for those who choose to wait before transferring cash, I hope you can get a better rate than me, for me, its all about peace of mind. We recently had a discussion here about the benefits of planning for different scenarios, I wonder if anyone planned for this one currently - having read the thread now I see they did, well done. I seem to be down 11% overall on last June, add to that another 10% for July/March so circa 21%, WTH, its only numbers.
|
|
|
Post by rgs2001uk on Apr 6, 2020 20:39:26 GMT 7
Well a little analysis today, my Alliance Trust account has dropped, 26.2%, my stockbroker account has dropped 22%, overall a drop of 23.5%, basically back to where I was 2 years ago, a paper loss, but no loss in monetary terms. Carrying on from above post, transferred from my HSBC UK bank account cash reserves today enough to keep me going for the next year. This isnt a gloat post, for those who choose to wait before transferring cash, I hope you can get a better rate than me, for me, its all about peace of mind. We recently had a discussion here about the benefits of planning for different scenarios, I wonder if anyone planned for this one currently - having read the thread now I see they did, well done. I seem to be down 11% overall on last June, add to that another 10% for July/March so circa 21%, WTH, its only numbers. Too be honest CM, no one saw this coming, I have seen currency crashes, housing market crashes and stock market crashes, this is like a perfect storm. For me personally, three things will happen, 1, no trip to the UK this year, the only lucky thing for me is, this happened now, and not after my intented trip back to blighty. 2, no new car this year, cash reserves being used elsewhere. 3, I wont be reinvesting my dividends, they will be used to rebuild my cash reserves. One thing I learned a long time ago was to ask myself, what would happen if i lost this job tomorrow? I cant give any answers, its horses for courses, our circumstances are different (I dont mean you personally).
|
|
|
Post by rgs2001uk on Apr 6, 2020 20:43:04 GMT 7
Well a little analysis today, my Alliance Trust account has dropped, 26.2%, my stockbroker account has dropped 22%, overall a drop of 23.5%, basically back to where I was 2 years ago, a paper loss, but no loss in monetary terms. Carrying on from above post, transferred from my HSBC UK bank account cash reserves today enough to keep me going for the next year. This isnt a gloat post, for those who choose to wait before transferring cash, I hope you can get a better rate than me, for me, its all about peace of mind. We recently had a discussion here about the benefits of planning for different scenarios, I wonder if anyone planned for this one currently - having read the thread now I see they did, well done. I seem to be down 11% overall on last June, add to that another 10% for July/March so circa 21%, WTH, its only numbers.Got to love the gallows pole sense of humour, as I have said before, it just means there will be less left for the mrs. Ha ha ha, its all telephone numbers to her any way. Probably a good job she doesnt know what she is worth, I might get kicked down the stairs tonight, 55555.
|
|