FTSE in the future...

[londonstache]

I've just put an order in for a wodge more of Vanguard Lifestrategy 80% in my S&S ISA, but that's more because the end of the tax year is coming and we're still not maxed out. The conversations with Mrs londonstache have been about time horizons - the money in the S&S ISA is realistically for 15-20 years out so we can avoid panicking about market volatility. I'm more relaxed as she works in finance where it appears every 2nd day since we met there is a major 'chicken little' moment.

[vand]

Another positive way to view things:

The FTSE 100 hits its all time high back in May 2018.

That means we are now technically almost 2 years into a stealth bear market. That's round about the batting average for a bear market.

Of course we have no idea how long this bear market (for that is what it is) will go on for, but if you are fearing that we are just 3 weeks into a multi-year decline.. well the FTSE at least is already in the midst of a multi-year decline.

[vand]

Even more of a bargain now:

https://www.moneyobserver.com/chart-tells-story-ftse-100-offers-investors-once-decade-opportunity

[MisterA]

I wont be buying anything for at least 2 weeks.  I doubt we will see the real picture till then.
Italy just announced big national restrictions.  If the UK has to do similar the markets will have to be suspended surely.
Its all crazy stuff but I think the next few months could be a serious dip.

+1

Down, down, deeper and down.

If I had a wadge of money to invest, I think I'd be splitting it up and buying some form of index fund. For example, buying every 3 weeks for the next 3 months. That would just even out what you were buying and minimise the losses of buying just before another market adjustment.

I've just increased my monthly savings into an index fund. Firstly to take advantage of lower prices, and secondly to slightly mitigate my current portfolio situation with (paper) losses. It won't reverse my current losses, but makes me feel like I'm doing something.

[never give up]

March 19 - 6700
Sept 19 - 5904

Storm’s coming.

Ah I was too optimistic for once :-) Although to be fair I was miles out in September itself. It's hard this game isn't it?

I'm rebalancing my cautious asset allocation now into stocks regularly but very slowly. I'm also giving this a bit more of a UK bias than I have done before. As I've proven in this thread on numerous occasions I am completely useless at predicting what is going to happen. Don't sell, keep buying if possible and make sure you have a good cash fund is all I'm trying to do.

Stay safe everyone.

[vand]

I cannot believe how cheap this index is getting. With FTSE futures market currently down -10% to 5060 the CAPE valuation has come down to 10.5. That's cheaper than it was at the bottom of the 2009 crash.

People are literally losing their minds and running for the hills like headless chickens. This is the "once in a decade" opportunity that we throw everything at to take advantage.

[PhilB]

Don't forget Keyne's famous mantra- "Markets can stay irrational longer than you can stay solvent."

This looks like a great time to buy the FTSE, yes, but it may also be an excellent time to have a decent emergency fund.

[cerat0n1a]

I cannot believe how cheap this index is getting. With FTSE futures market currently down -10% to 5060 the CAPE valuation has come down to 10.5. That's cheaper than it was at the bottom of the 2009 crash.

While I think you're right, clearly next year's earnings will be a lot lower than the preceding few years', so I'm not sure the PE ratio is quite as cheap as it appears.

[vand]

I cannot believe how cheap this index is getting. With FTSE futures market currently down -10% to 5060 the CAPE valuation has come down to 10.5. That's cheaper than it was at the bottom of the 2009 crash.

While I think you're right, clearly next year's earnings will be a lot lower than the preceding few years', so I'm not sure the PE ratio is quite as cheap as it appears.

Right, but CAPE is 10yr average. Profits are certain to dip in the near term, but they should recover too.

At times like this it can be difficult to see the world carrying on past the current crisis, but we will eventually all move on.

[MisterA]

I cannot believe how cheap this index is getting. With FTSE futures market currently down -10% to 5060 the CAPE valuation has come down to 10.5. That's cheaper than it was at the bottom of the 2009 crash.

People are literally losing their minds and running for the hills like headless chickens. This is the "once in a decade" opportunity that we throw everything at to take advantage.

You might be right, but you've been advocating buying since the end of February. We're down a further 25% since then.
It's not at the bottom yet, it's going to get considerably worse. Wait until the FTSE, NYSE and the governments of the UK and USA are on lock-down. The markets are based on confidence, and at the moment, there isn't much cause for optimism.

Continuing regular monthly investment saving is the way to go, whilst holding onto your portfolio and hoping that it recovers properly in less than a year or 2.

[vand]

All good points you all have raised.

It's impossible to know where the bottom is when the market is this volatile.

The FTSE100 is now down 39% from the all time highs (inflation adjusted). I did not consider it particularly expensive when it was trading near it's highs, so I consider it a generational bargain where it is right now. But that is not to say that it can't get cheaper! It can always get cheaper in a bear market, just as it can always get more expensive during a bull market. 

The fly in the ointment, as I see it, is that US markets are still not particularly cheap. The Dow has little technical support until 18,000, so we could easily drop another 15%.

In any case, it's crucial to have a plan of attack. Having now emptied all my bullets at this thing, my plan is that if we see FTSE 4700 I will swap 1/3 of my bonds for the FTSE, then @4400 another 1/3rd, and 4100 the last 3rd, and all the time I will be a regular buyer over the next few years anyway with every paycheque.

[vand]

The midcap 250 index, which has long outperformed the broader market, has been hit especially hard in this crash - A peak to trough fall of 45% (so far) vs about 40% for the 100/All Share.

I remember when the 250 and the 100 were basically trading at the same level.. last month the midcaps traded at 22k while the FTSE was still in the 7k's! (100 has a higher dividend yield, but still).

As value investor I prefer the solidity of the yield provided by the 100/All Share, but if you like growth then this is a great opportunity to buy into the midcap index.

[vand]

Welp, the FTSE is now nudging 6200, which is almost a 30% bounce from the lows of March.. although I can't really single out the FTSE itself for much credit here, as it is still lagging other markets and some way off the 200dma while the S&P500 has just reclaimed this level.

I'm lightening up on my equity position a bit here and raising some cash in case we have another leg down over the summer. I don't think we'll come close to the March lows again but I do think the recovery has pretty much been fully priced in, and markets may be vulnerable to some selling over the next few months.

[skip207]

Mid august onwards will be a wobble and i can see things getting worse as we go into the winter.  Then hopefully recovery into the new year.

[vand]

If we're playing predictions - and I suppose we are - I think there's a high chance that stocks will rally strongly into the Nov election, as Trump - a president who has often used the stock market to highlight the strength of the economy - knows his  reelection chances will be greatly helped or hindered based upon the level of the stock market.

[PhilB]

As I've just had my 54th Birthday, I can confidently predict that there will be a massive stock market rally at some point in the next 12 months.  It will happen on the day I transfer my work pension to a SIPP so I miss most of it.  Markets will then continue up to take me back over the LTA when I crystalize my fund, before collapsing permanently.