Savings and Investments thread

Chaz Hill

Got notification of my £100 ‘fairer share’ payment from Nationwide today. Very kind of them 😉

IdleHans

Better than my premium bonds. Cheers, NW!

redman

Diebythesword said:

redman said:

golfaddick said:

Weird statement by the Deputy Governor of the BOE today, although I do think the BBC have made it more sensational than it really is.

Yes markets are at their all time highs (well US & Japan are, UK and Europe are still around 5% off theirs) but then that's what things do.....they go up in value. Would you not buy a car today because they are more expensive than they were 5 years ago ?  Stockmarkets dont tread water for years on end - they go up & down in a daily basis and over time their trajectory is upwards. As has been commented on here recently, if you sit on the sidelines waiting for a fall / dip / crash you could miss out on plenty of growth before that ever happens. 

And some of the other things she alludes to aren't really part of every day life like private credit. God knows what she things she is going to achieve by saying all this......apart from panic !

The stock market is no business of hers she should not be making these comments.

However I do agree with her. We have been in a strong bull run and P/E ratios are well above historical averages (except Japan I believe). This in itself doesn't mean anything but a lot of other economic factors are not strong. Certainly agree long term would still be profitable in gilts but you could be looking at a longer timescale than usual. Certainly wouldn't be putting in much new money if I wasn't looking at 10 years. Don't believe in dipping in and out either, so not really a seller. Anyway I'm not an IFA so take it all with a pinch of salt. 

Personally I strongly disagree. The recent strong bull run has been the recovery from Covid and now ai, which may well achieve remarkable productivity which would justify lofty valuations. The world’s largest economy is still largely roaring away. I think we’re still a few years away from a market downturn, that’s if a certain man across the Atlantic doesn’t suffocate it first. 

Films like the big short have a lot to answer for, everyone’s now trying to look like a genius when calling for the next market downturn which only happen once every couple of decades. We’ve already had one severe market downturn in covid this decade. 

Well it's a valid view and it is quite possible markets will continue to rise. AI may prove the valuations are justified. However it is difficult to ignore P/e ratios at very high levels (not just tech companies) and net margins/ ROI at historical high levels. You can continue to pile in but I'll be more cautious and sit on the side lines. 
Incidentally your statement of a downturn every 2 years is factually wrong. We have had 14 bear markets (MSCI world index) since 1970, each with market falls of over 20% up to 59% (source JP Morgan).