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Original poster

I think the markets going to tank, any thoughts?

30 replies

AdmiralCain · 04/10/2021 12:46

I've just had a feeling... After the credit crunch the world debt was exposed and the futures market probably made a killing on who would be holding the toxic debt when it got exposed.
UK has gone up from 800 (odd) billion to over 1.15 trillion debt. People just wanted to get back to the good life and have loaded up on debt and credit cards are still charging 18% when interest rates are .25%
Every ten years you get a correction roughly, nothing in 2018 but the market took a big hit in March 2020 with covid but has more than recovered.
Today I have withdrawn everything from my private pension funds and put it all into a cash fund with HSBC as I think the market is going to crash badly very soon.
Stagnation, inflation, debts, energy crisis, political strife, geo political strife.

Anybody else worried?

OP posts:

TiddleTaddleTat · 04/10/2021 12:49

Don't know but I've started investing again. As good a time as any for well diversified index funds over the long term ?

lightand · 04/10/2021 12:50

I dont know much, and couldnt possibly advise on someone elses' financial situation. I have enough problem guessing my own.

I am wondering if you think the start of things[if things have not already started] from the US or China[their property market, including Evergrande], or somewhere else?

You say stagnation. Do you mean stagflation[from what little I know and dont quote me I think stagflation may be how things would go?].

Original poster

AdmiralCain · 04/10/2021 14:12

I really diversify, Global funds, eco funds, asia, pacific etc but I've noticed it all going down, I do my research, what the funds invest in, the fund manager quartile performance, alpha and beta but I' m gonna leave it in cash. That will stop me loosing more and if things crash that will be a good time to reinvest or go for index linked things.
I don't think China will help the USA, They'll do what's best for themselves.

OP posts:

nannynick · 04/10/2021 15:34

If it does then that means stocks are On SALE. A rebound may take months, maybe years. Are you thinking it would never rebound?

Could be an issue for anyone needing to take out money. Less of an issue for those in the accumulation phase as they are buying things cheaper than they were before.

Original poster

AdmiralCain · 04/10/2021 16:23

Oh of course they'll rebound I believe, they always do, it may take 2 or 3 years. I'm happy to buy when they're on sale and wait years for them to climb up. I don't need the money now, I'm in the accumulation phase

OP posts:

Candleabra · 04/10/2021 16:28

Always stay invested. By the time you know the market is climbing, you've missed the boat for the really good returns.
If you're in for the long game (5-10 years plus) you stay put.
It's scary when you see those paper losses, but they're just on paper until you cash in.

Linguaphile · 04/10/2021 21:05

Annoyingly we put a 20k lump sum in just at the peak back in August. Kicking myself for not easing it in over a few months because (aside from the losses) we used up our isa allowance, so we can’t take advantage of the better prices. Oh well. It wasn’t unexpected that things would jump around, and we know it’s just a case of riding it out over the years. It’s a shame though knowing we paid full price just before what feels like the mid season sale.

I do feel pessimistic that this decade coming up will be a lot more volatile and gains will be a lot less than the past decade. I’ve read a few articles recently saying that investors are looking at more like 4% annualized returns over the coming years compared with the huge gains investors have been seeing recently. I am managing my expectations for what we’ll see in gains over the next 10 years.

RosieGuacamosie · 04/10/2021 21:12

Did you not pay an extortionate amount of tax on your pension if you withdrew it and put it in cash?

LizzieSiddal · 04/10/2021 21:15

Did you not pay an extortionate amount of tax on your pension if you withdrew it and put it in cash?

Yes was just going to ask the same thing.

3cats4poniesandababy · 04/10/2021 21:22

A lot economies round the world are recovering fairly well and not all consumers everywhere have built up debt.

You sound like the type of person who every year I see on mumsnet predicting house prices will 'reset'.

The stock market never moves in a completely linear fashion.

Dindundundundeeer · 04/10/2021 21:28

Today I have withdrawn everything from my private pension funds and put it all into a cash fund with HSBC as I think the market is going to crash badly very soon

Good luck with inflation.

AuntieJoyce · 04/10/2021 21:35

Think OP means switching out of equities to cash still within the PP wrapper although that’s not what he/she said

There is a lot of general concern about a bear market but where to go? I prefer a good diversified fund and ride it out

Sarahlou63 · 04/10/2021 21:38

I have a few small pension pots in the UK and Ireland and I'm thinking of cashing in/moving to cash funds. The gulf between what's happening in the real world and what's happening in the stock markets (and in the UK property market) is widening. It's not a matter of if, but when.

Original poster

AdmiralCain · 05/10/2021 08:53

AuntieJoyce - That's exactly what I meant, my PP gives me the option of going into a deposit fund, where they put all the money in HSBC, it's still within my investment options and doesn't face any charges.

OP posts:

Residentnumber1 · 05/10/2021 14:22

A brave decision. Maybe it will work, but chances are that overall it wont. There is plenty of research around about the dangers of trying to time the market, it only takes missing a few good days of market increases, to have a significant impact on the end result. Maybe better to have put the money in to more defensive funds/investments, instead? Hope it works out for you, and you have a good crystal ball, but history isn't on your side.

fromdownwest · 06/10/2021 11:22

Time in the market not timing the market.

If you are concerned about equity crashes, why not a low risk fund with fixed interest security exposure that works well in a falling market.

100% cash in a pension is madness, especially given the fears you have with inflation?

PersonaNonGarter · 06/10/2021 11:24

No help is coming from China - that is where the problem will start.

Dindundundundeeer · 06/10/2021 11:57

If you are concerned about equity crashes, why not a low risk fund with fixed interest security exposure that works well in a falling market but works very badly with inflation.

To be honest anything other than real assets is madness right now

Amboseli · 08/10/2021 22:14

I'm thinking the same. Maybe not a crash but a "sharp correction" as the Bof E said today.

I read that people are still investing as if we are still in a low inflation, low interest rate, economic climate and not factoring in the reduction of government support for the economy, rising interest rates and inflation, lower consumer spending due to squeezed income because of tax rises and higher bills.

Despite all that I am still investing some money in various tracker funds. However I'm going to drip feed it in more slowly than I had originally planned to hopefully benefit from any downturn in the next 6 months.

@Residentnumber1 I've been looking into defensive funds. I like something called lindsell train global equity fund (not the investment trust). It hasn't done very well so far as it's not invested in the big tech stocks like Apple etc. It's more consumer staples like diagio and Unilever. I'd be interested in your opinion on this?

I'm also investing in a global tracker and couple of others including a robotics and AI fund on the basis that this is DHs area of expertise and he's confident it will do well over 10 years.

I'm very much a newbie to investing, have spent a lot of time reading up recently but still have an awful lot to learn!

Amboseli · 08/10/2021 22:16

@Dindundundundeeer when you say real assets do you mean things like property and/or gold?

TheBugHouse · 09/10/2021 00:04

Dh has been thinking of transferring his final salary pension out to a drawdown pension to retire early. The gilt price has risen in the last month so his pot is reducing. So was going to get out before it falls more… but now reading about a possible crash has made me jittery whether he should leave it where it is for now. I’ve no idea which way to jump as don’t want to take it out snd lose it!

Ozanj · 09/10/2021 00:11

It is worth buying equities right now, particularly global ones.

Ozanj · 09/10/2021 00:15

I had huge paper losses during the financial crisis for exactly 12 months. I took the opportunity to invest more and buy when equities were cheap and after a year I had made back 140% of my total investment. There is a strategy for uncertain markets - selling up at loss when you can possibly avoid it isn’t a good one.

Residentnumber1 · 09/10/2021 08:46

@Amboseli

I have, on the whole, carried on investing in a wide range of funds, etfs and trusts. One thing I have done is invest more in a couple of defensive assets; Ruffer Investment Trust and Capital Gearing Trust. These are more defensive than global equity funds, and hopefully should provide some defence if markets do drop. The other thing is holding a bit more cash than normal, but the cash is sitting in the investment account, so ready to invest if an opportunity arises. If there is no major correction within the next couple of months, then I'll fully invest that. Usually I don't try to time the market, goes against all the normal principles I apply, but caution is getting the better of me at the moment

Residentnumber1 · 09/10/2021 08:48

@Ozanj

What's your time scale, if its long term, then yes, its worth carrying on investing in a range of diversified funds/etfs/trusts. Long term would be at least 10 years, in my opinion.

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