Unprecedented times, my SIPP is down 13%, but could be worse. Time to take as much tax advantage as I can.
Mine is "only" down 8%. But that's because, more by accident than design, it actually has 30% in cash. Which means I can buy at these lower prices, but then again, as I'm nearly 66, I have to be careful about what I buy.
Unprecedented times, my SIPP is down 13%, but could be worse. Time to take as much tax advantage as I can.
Mine is "only" down 8%. But that's because, more by accident than design, it actually has 30% in cash. Which means I can buy at these lower prices, but then again, as I'm nearly 66, I have to be careful about what I buy.
Unprecedented times, my SIPP is down 13%, but could be worse. Time to take as much tax advantage as I can.
Mine is "only" down 8%. But that's because, more by accident than design, it actually has 30% in cash. Which means I can buy at these lower prices, but then again, as I'm nearly 66, I have to be careful about what I buy.
At 66? Buy more cash!
I'm probably being dim or about to be whooshed, but are you suggesting I liquidate my funds, at these levels?
Unprecedented times, my SIPP is down 13%, but could be worse. Time to take as much tax advantage as I can.
Mine is "only" down 8%. But that's because, more by accident than design, it actually has 30% in cash. Which means I can buy at these lower prices, but then again, as I'm nearly 66, I have to be careful about what I buy.
At 66? Buy more cash!
I'm probably being dim or about to be whooshed, but are you suggesting I liquidate my funds, at these levels?
No of course not, ride that out with the exposure you currently have. But there is a way down to go yet in my opinion - I'm certainly not touching equities at the moment but I will in due course.
Unprecedented times, my SIPP is down 13%, but could be worse. Time to take as much tax advantage as I can.
Mine is "only" down 8%. But that's because, more by accident than design, it actually has 30% in cash. Which means I can buy at these lower prices, but then again, as I'm nearly 66, I have to be careful about what I buy.
At 66? Buy more cash!
I'm probably being dim or about to be whooshed, but are you suggesting I liquidate my funds, at these levels?
No of course not, ride that out with the exposure you currently have. But there is a way down to go yet in my opinion - I'm certainly not touching equities at the moment but I will in due course.
Right. I am just gently feeding some cash into lower risk funds such as Vanguard Life Strategy 20% Equity.
It's now starting to resemble the Great Depression - startling market falls across the world on a scale that's quite mindblowing. I think the majority of Governments are pretty clueless what action to take.
It's now starting to resemble the Great Depression - startling market falls across the world on a scale that's quite mindblowing. I think the majority of Governments are pretty clueless what action to take.
One action they could take is to take no action. The markets have smelt fear & are baying for blood. They know Governments dont know what to do & now nowhere else to go in terms of fiscal policy.
It's now starting to resemble the Great Depression - startling market falls across the world on a scale that's quite mindblowing. I think the majority of Governments are pretty clueless what action to take.
One action they could take is to take no action. The markets have smelt fear & are baying for blood. They know Governments dont know what to do & now nowhere else to go in terms of fiscal policy.
It's now starting to resemble the Great Depression - startling market falls across the world on a scale that's quite mindblowing. I think the majority of Governments are pretty clueless what action to take.
One action they could take is to take no action. The markets have smelt fear & are baying for blood. They know Governments dont know what to do & now nowhere else to go in terms of fiscal policy.
Not a good time.
No end in sight to losses at present.
There must be an end sometime, because if the FTSE fell to 0 that would mean ALL the 100 constituents are worthless.........
It's now starting to resemble the Great Depression - startling market falls across the world on a scale that's quite mindblowing. I think the majority of Governments are pretty clueless what action to take.
One action they could take is to take no action. The markets have smelt fear & are baying for blood. They know Governments dont know what to do & now nowhere else to go in terms of fiscal policy.
Not a good time.
No end in sight to losses at present.
There must be an end sometime, because if the FTSE fell to 0 that would mean ALL the 100 constituents are worthless.........
And finally, financial news. The FTSE 100 closed today at 16.32, down 0.1, with a surprise new entry 'The Valley Cafe'.
Some commentary on the markets. Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
Some commentary on the markets. Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
Let me stress my cynicism is not aimed at you - indeed thanks for posting - but I've pissed myself laughing at the bit that says stock markets should fully recover in the 2nd half of the year! The finance industry just can't help itself, can it?
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
This is what I received from Investec on 13th March:
Following on from my recent Coronavirus letter and after the dramatic events of the past few days, I felt it sensible and prudent to write again with our latest thoughts. I certainly do not want to bombard you with letters, but given the vast amount of media attention this is generating, it feels appropriate for us to stay in close contact.
As you will be aware, in the last 10 days, we have seen a significant increase in market volatility, as the epidemic continues to unsettle investors. On Monday, a new factor was introduced with an extraordinary fall in the oil price (down 30% at the start of trading) after Saudi Arabia walked away from the OPEC meeting, unleashing an all-out price war with Russia, which threw already unsettled markets into turmoil. This has caused the FTSE 100, our premier index, to fall nearly 30%, year to date.
Unfortunately the sharp decline suffered by global markets has triggered a fall in the value of your portfolio since the last formal valuation. As such, I wanted to write to you to reassure and to let you know that I am here, monitoring things closely and will react immediately, if we feel we should alter your investments.
Please do be assured that through sensible asset class diversification and appropriate stock selection, we are certainly not experiencing the full level of falls seen by global equity markets.
Whilst undoubtedly the economic impact of the virus will be material in the short term, we do feel many shares have already moved into oversold territory and do expect markets to recover well, once the outbreak is under control. There may well be further volatility over the coming few weeks and even months yet, but without dismissing the serious nature of this, we are certainly not panicking this end.
Some of the factors supporting this view are expanded on within the Weekly Digest, which I have enclosed with this letter. Clearly, this situation is moving rapidly, so please forgive me if anything we write already appears out of date. We can set clients up to receive this Digest via email every week, so if this would be useful and of interest, please let me know.
One thing is very clear, central banks and government will be doing everything they can to calm nerves and stabilise the global economy. We can see this by the 0.5% cut in interest rates by the Federal Reserve and Bank of England over the past few days. This is part of massive and coordinated global fiscal packages, to ensure that we protect global growth.
This will not, of course, prevent immediate stock market volatility or reduce the short term spread of the virus. However, when normality returns (and we are confident it will), it should rapidly accelerate the recovery.
We saw this intervention work well after the financial crises of 2008. We should not forget that then we were facing the collapse of the global banking system and yet we pulled comfortably through that. We see no reason to believe this will be any different.
So to conclude, we have always stuck to quality investments that will deliver on your objectives for you. Whilst we are all currently feeling battered and bruised, we will eventually move through this and, we are of course also looking at the portfolios to ensure that we fully participate in the upturn in the market.
Some commentary on the markets. Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
Let me stress my cynicism is not aimed at you - indeed thanks for posting - but I've pissed myself laughing at the bit that says stock markets should fully recover in the 2nd half of the year! The finance industry just can't help itself, can it?
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
Are the stock markets really something for you? You seem to have a very little level of trust for anyone involved.
Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?
With the pound crashing in value do you have any tips for those of us abroad to take advantage of the situation?
Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?
With the pound crashing in value do you have any tips for those of us abroad to take advantage of the situation?
Only very boring advice I am afraid, which is, longer term, try to be hedged by holding savings in your home currency, as well as in the UK. Us mug punters really have no way to "play" the forex markets. Actually against the Czech crown the pound has not really plunged at all, but in turn that is largely a consequence of the crown significantly weakening against the euro. Forex markets are impossible for most of us to predict. e.g. if I were optimistic on your behalf, I might think that the big slow down in China will lead to a weakening of the RMB, but I could be completely wrong.
Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?
No worries, thought I would pass it on. I worked in the interest rate/fx markets for a long time. If you want to hear bullsh*t, that and other markets are the place to go. Can't help but think the community is talking its book to a certain extent. Did seems strange that contradictory statement.
Thanks a lot for posting that, @wwaddick. Let's kick it around as dispassionately as possible.
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?
With the pound crashing in value do you have any tips for those of us abroad to take advantage of the situation?
Only very boring advice I am afraid, which is, longer term, try to be hedged by holding savings in your home currency, as well as in the UK. Us mug punters really have no way to "play" the forex markets. Actually against the Czech crown the pound has not really plunged at all, but in turn that is largely a consequence of the crown significantly weakening against the euro. Forex markets are impossible for most of us to predict. e.g. if I were optimistic on your behalf, I might think that the big slow down in China will lead to a weakening of the RMB, but I could be completely wrong.
We've gone from 9.01 RMB to the pound to 8.5 in a matter of days, I wasn't really thinking of 'trading' to turn a profit, but perhaps sending a chunk home, to keep there if it drops to 8.
It's also worth remembering the RMB doesn't really weaken like most currencies, it's very much controlled.
Some commentary on the markets. Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
The death toll associated with influenza in England in 2017/2018 was 26,408. Covid 19 related deaths in the whole of the UK is presently 55. (just saying I know all the info).
Some commentary on the markets. Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
The death toll associated with influenza in England in 2017/2018 was 26,408. Covid 19 related deaths in the whole of the UK is presently 55. (just saying I know all the info).
Exactly. I looked it up this morning. Average deaths over the last 5 years from flu is 17000. And lots of people over 60 get the flu jab so are immune.
Some commentary on the markets. Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
The death toll associated with influenza in England in 2017/2018 was 26,408. Covid 19 related deaths in the whole of the UK is presently 55. (just saying I know all the info).
I reckon those numbers will go through the roof over the next few weeks. Hopefully I'm wrong
I really want GS to be right. It feels like a longer 911 that will hopefully recover when infection rates slow. Not that kick starting the economy will be easy.
But now I'm very worried as GS have a lot of form. Remember when oil was going to go to 250 dollars a barrel ... just before it crashed?
I don't generally believe in conspiracies but they have a habit of being on the other side of their predictions, as Prague says. 2008 was just one example.
Some commentary on the markets. Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
Let me stress my cynicism is not aimed at you - indeed thanks for posting - but I've pissed myself laughing at the bit that says stock markets should fully recover in the 2nd half of the year! The finance industry just can't help itself, can it?
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
Are the stock markets really something for you? You seem to have a very little level of trust for anyone involved.
Might better to invest elsewhere
Listen, I was probably playing around on the stock market before you were born - can remember buying some STC shares in the late 70s/early 80s and making a pretty little penny when I immediately sold them. Had my fair share of successes (and odd failures!) since so I'm quite happy investing in the stock market. But thanks for your advice!
I have 2 big gripes with the stock market. Years of careful growth so often get wiped out in days when something spooks the market and the traders don't feel confident. Yes, so far, the market has always gone back up but sometimes it takes years - 15 from close on 31/12/99 to the level it was that day. With most people's pensions now invested in the stock market, not everyone now has the time to sit and wait for it to recover such huge losses. Anyone whose pension is now coming up for payment faces a huge loss, and a much poorer retirement, than otherwise they would have faced 15 days ago.
Secondly, notes like that from GS saying "Stock markets should fully recover in the 2nd half of the year" strike me as highly irresponsible. (Laws of libel stop me saying what I really think). They don't know anymore than I do in these unchartered times what will happen. It's just like saying let's keep people investing so we keep getting our commission. When do traders ever say the market is going down? Look at the end year predictions they come up with. Nearly always upwards.
Anyway, there we go. We've had a good dead cat bounce rally today. All is good with the world. Buy, buy, buy. And doubles all round.
(PS As regards "levels of trust", I was invested in the Woodford funds. Fortunately got out well before they were suspended but what a disgrace that turned out to be in the end. Anyone held responsible yet? Not to my knowledge. So excuse me if I am cynical about the workings of the market).
Some commentary on the markets. Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
Let me stress my cynicism is not aimed at you - indeed thanks for posting - but I've pissed myself laughing at the bit that says stock markets should fully recover in the 2nd half of the year! The finance industry just can't help itself, can it?
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
Are the stock markets really something for you? You seem to have a very little level of trust for anyone involved.
Might better to invest elsewhere
Listen, I was probably playing around on the stock market before you were born - can remember buying some STC shares in the late 70s/early 80s and making a pretty little penny when I immediately sold them. Had my fair share of successes (and odd failures!) since so I'm quite happy investing in the stock market. But thanks for your advice!
I have 2 big gripes with the stock market. Years of careful growth so often get wiped out in days when something spooks the market and the traders don't feel confident. Yes, so far, the market has always gone back up but sometimes it takes years - 15 from close on 31/12/99 to the level it was that day. With most people's pensions now invested in the stock market, not everyone now has the time to sit and wait for it to recover such huge losses. Anyone whose pension is now coming up for payment faces a huge loss, and a much poorer retirement, than otherwise they would have faced 15 days ago.
Secondly, notes like that from GS saying "Stock markets should fully recover in the 2nd half of the year" strike me as highly irresponsible. (Laws of libel stop me saying what I really think). They don't know anymore than I do in these unchartered times what will happen. It's just like saying let's keep people investing so we keep getting our commission. When do traders ever say the market is going down? Look at the end year predictions they come up with. Nearly always upwards.
Anyway, there we go. We've had a good dead cat bounce rally today. All is good with the world. Buy, buy, buy. And doubles all round.
(PS As regards "levels of trust", I was invested in the Woodford funds. Fortunately got out well before they were suspended but what a disgrace that turned out to be in the end. Anyone held responsible yet? Not to my knowledge. So excuse me if I am cynical about the workings of the market).
The financial sector is too big to fail and knows it will always get bailed out. Happy to risk our money for their own ends.
Comments
At 66? Buy more cash!
No of course not, ride that out with the exposure you currently have. But there is a way down to go yet in my opinion - I'm certainly not touching equities at the moment but I will in due course.
Not a good time.
And finally, financial news. The FTSE 100 closed today at 16.32, down 0.1, with a surprise new entry 'The Valley Cafe'.
Not my words I hasten to add.
Conclusions of Goldman Sachs Investee call where 1,500 companies dialed in. The key economic takeaways were:
China’s economy has been largely impacted which has affected raw materials and the global supply chain. It may take up to six months for it to recover.
Global GDP growth rate will be the lowest in 30 years at around 2%.
S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
There will be economic damage from the virus itself, but the real damage is driven mostly by market psychology. Viruses have been with us forever. Stock markets should fully recover in the 2nd half of the year.
In the past week there has been a conflating of the impact of the virus with the developing oil price war between KSA and Russia. While reduced energy prices are generally good for industrial economies, the US is now a large energy exporter, so there has been a negative impact on the valuation of the domestic energy sector. This will continue for some time as the Russians are attempting to economically squeeze the American shale producers and the Saudi’s are caught in the middle and do not want to further cede market share to Russia or the US.
Technically the market generally has been looking for a reason to reset after the longest bull market in history.
There is NO systemic risk. No one is even talking about that. Governments are intervening in the markets to stabilize them, and the private banking sector is very well capitalized. It feels more like 9/11 than it does like 2008.
So at a time when we have major cities in the world on lockdown (and with no real knowledge when that will end), thousands dying, businesses across wide sectors facing annihilation and the world facing the biggest crisis any of us have ever experienced, the finance industry still says, keep buying, it will be fine, things will soon be back to normal!
This is what I received from Investec on 13th March:
Following on from my recent Coronavirus letter and after the dramatic events of the past few days, I felt it sensible and prudent to write again with our latest thoughts. I certainly do not want to bombard you with letters, but given the vast amount of media attention this is generating, it feels appropriate for us to stay in close contact.
As you will be aware, in the last 10 days, we have seen a significant increase in market volatility, as the epidemic continues to unsettle investors. On Monday, a new factor was introduced with an extraordinary fall in the oil price (down 30% at the start of trading) after Saudi Arabia walked away from the OPEC meeting, unleashing an all-out price war with Russia, which threw already unsettled markets into turmoil. This has caused the FTSE 100, our premier index, to fall nearly 30%, year to date.
Unfortunately the sharp decline suffered by global markets has triggered a fall in the value of your portfolio since the last formal valuation. As such, I wanted to write to you to reassure and to let you know that I am here, monitoring things closely and will react immediately, if we feel we should alter your investments.
Please do be assured that through sensible asset class diversification and appropriate stock selection, we are certainly not experiencing the full level of falls seen by global equity markets.
Whilst undoubtedly the economic impact of the virus will be material in the short term, we do feel many shares have already moved into oversold territory and do expect markets to recover well, once the outbreak is under control. There may well be further volatility over the coming few weeks and even months yet, but without dismissing the serious nature of this, we are certainly not panicking this end.
Some of the factors supporting this view are expanded on within the Weekly Digest, which I have enclosed with this letter. Clearly, this situation is moving rapidly, so please forgive me if anything we write already appears out of date. We can set clients up to receive this Digest via email every week, so if this would be useful and of interest, please let me know.
One thing is very clear, central banks and government will be doing everything they can to calm nerves and stabilise the global economy. We can see this by the 0.5% cut in interest rates by the Federal Reserve and Bank of England over the past few days. This is part of massive and coordinated global fiscal packages, to ensure that we protect global growth.
This will not, of course, prevent immediate stock market volatility or reduce the short term spread of the virus. However, when normality returns (and we are confident it will), it should rapidly accelerate the recovery.
We saw this intervention work well after the financial crises of 2008. We should not forget that then we were facing the collapse of the global banking system and yet we pulled comfortably through that. We see no reason to believe this will be any different.
So to conclude, we have always stuck to quality investments that will deliver on your objectives for you. Whilst we are all currently feeling battered and bruised, we will eventually move through this and, we are of course also looking at the portfolios to ensure that we fully participate in the upturn in the market.
Might better to invest elsewhere
My first reaction is that that is very optimistic, possibly wilfully so. Goldman has form from 2008 for saying one thing and doing quite another. Most of the drastic European measures have been put in place for 30 days, but I cannot see how they will not be prolonged, unfortunately for all of us. The only way they could be lifted is if they see a sharp drop in new infections. I cannot see that in 30 days. These measures affect both supply and demand. How will most economies now avoid a steep drop in GDP and multiple bankruptcies, often of otherwise solid well-run companies? That being the case, global growth of 2% seems very optimistic indeed. Finally there seems to be a contradiction in what they have actually forecast for markets this year.
On the one hand: Stock markets should fully recover in the 2nd half of the year.
But: S&P 500 will see a negative growth rate of -15% to -20% for 2020 overall.
Eh?
I worked in the interest rate/fx markets for a long time. If you want to hear bullsh*t, that and other markets are the place to go.
Can't help but think the community is talking its book to a certain extent.
Did seems strange that contradictory statement.
It's also worth remembering the RMB doesn't really weaken like most currencies, it's very much controlled.
Covid 19 related deaths in the whole of the UK is presently 55. (just saying I know all the info).
Hopefully I'm wrong
But now I'm very worried as GS have a lot of form. Remember when oil was going to go to 250 dollars a barrel ... just before it crashed?
I don't generally believe in conspiracies but they have a habit of being on the other side of their predictions, as Prague says. 2008 was just one example.
I have 2 big gripes with the stock market. Years of careful growth so often get wiped out in days when something spooks the market and the traders don't feel confident. Yes, so far, the market has always gone back up but sometimes it takes years - 15 from close on 31/12/99 to the level it was that day. With most people's pensions now invested in the stock market, not everyone now has the time to sit and wait for it to recover such huge losses. Anyone whose pension is now coming up for payment faces a huge loss, and a much poorer retirement, than otherwise they would have faced 15 days ago.
Secondly, notes like that from GS saying "Stock markets should fully recover in the 2nd half of the year" strike me as highly irresponsible. (Laws of libel stop me saying what I really think). They don't know anymore than I do in these unchartered times what will happen. It's just like saying let's keep people investing so we keep getting our commission. When do traders ever say the market is going down? Look at the end year predictions they come up with. Nearly always upwards.
Anyway, there we go. We've had a good dead cat bounce rally today. All is good with the world. Buy, buy, buy. And doubles all round.
(PS As regards "levels of trust", I was invested in the Woodford funds. Fortunately got out well before they were suspended but what a disgrace that turned out to be in the end. Anyone held responsible yet? Not to my knowledge. So excuse me if I am cynical about the workings of the market).