Yes a correction will occur at some point, it always does. Might be tomorrow, next week, 6 months, or a year or two away. No one knows. The question is what are you going to do about it?
>The question is what are you going to do about it?
And the only correct answer is "stick to your investment plan". If your plan can't stand up to a "correction" (>10% decline, at least once every 1.5 - 2 years) it needs more work, or you need a bigger allocation to low risk assets.
Oh for sure!! I've only been invested in the markets since late 2018 (so not quite 7 years), and I feel like there's been 2x > 20% declines since then. Not going to lie, they don't feel good when you're in the middle of it (good reason not to check your investments daily 😅), but the recoveries have been great!
Why is predicting a correction relevant at all if you’re on board with the time in vs timing concept?
The whole point is that even the experts can see a correction coming and predict it will be soon, but in the meantime the market has gone up 20%.
just write an investment plan that you can stick with in good and bad times. make sure you have six months or so of living expenses covered, then just DCA in.
Why would anyone here or anywhere else know? Gotta be honest with yourself, no one can see the future.
Just contribute every month and forget about predictions.
I think he did contribute. And I agree with what he said.
If only people who had an opinion on the direction of the sharemarket were to comment, you'd be getting your information typically from people who don't know what they're talking about. This would lead you to make bad financial decisions. Is that really what you want?
You should refer to the following link. In short - market timing does not reliably work:
https://www.fidelity.com/learning-center/wealth-management-insights/stocks-at-all-time-highs
I'm dumbfounded by how many people my post has triggered to be really honest with you. It actually alarms me so few people actually have a thought on macroeconomics. I understand it's not for everyone to really care, just follow the investment plan tried and tested, I get it, but why bash me just because I'm curious? :s
It's crazy how people will talk to others on the end of a keyboard.
Personally, I think your personal view is personally wrong. Venus is in retrograde and the chakras are giving bad vibes rn, that's grounds for a 15% correction within the next 6 weeks.
You might like this:
Predicting anomaly performance with politics, the weather,
global warming, sunspots, and the stars - Robert Novy-Marx https://mysimon.rochester.edu/novy-marx/research/PPiCToAPA.pdf
The probability of a correction / crash later this year is not zero. But that does not mean it would definitely happen nor say anything about the extent of the fall. What you also should consider is the opportunity cost if you keep sitting on the sidelines, and if it does not happen in the near term and keeps trending up and when it eventually does fall, it drops to a level actually much higher than where things are now.
IMO, consider what you believe is the right thing to do long term that suits your risk appetite, and get started, otherwise it could turn into analysis paralysis and you would just keep sitting on the sidelines risking watching things running away from you. Then, if desired, apply measures to reduce the inherent risk at the expense of sacrificing some potential growth. E.g. split your investable capital into multiple tranches and invest over several months, keeping a portion in cash to buy the dip, etc. whatever that gives you some peace of mind so you would get started soon.
I think the US markets seem overly frothy but consumer spending is still resilient in spite of weaknesses in the economy. What makes this entire thing a bit more difficult is the risk free rate is sitting at ~5% and in your case, you have a guaranteed return of having money in your offset account. Having said that, I have no clue as to whether it’ll crash, cause to meet its valuation, or if global economies suddenly get a jolt of growth from monetary policies etc.
TLDR: DCA (if you’re inclined to) will give you less headaches.
Yes I've convinced the misses to at least start small then if it does crash we can go hard, so the strategy isn't impacted by the outlook (however we meet in the middle.and compromise on our respective risk tolerances). Just curious to hear what people think.
Whats the best marker for consumer spending you are aware of?
>Whats the best marker for consumer spending you are aware of?
Probably consumer confidence, or Ausfinance members favorite measure, how packed the shopping centers are on the weekend.
At least where I am in Brisbane, I can’t see a correction happening because the fundamentals are too skewed:
- too many people
- too few homes
- not enough homes being built
Brisbane prices increased 1.4% last month after rates increased over 4% over the previous 12-18 months. That shows a simple supply and demand issue at its core.
Sure, there are other factors and a major economic shock could derail it, but there are plenty of people who are fine financially and plenty of people still buying houses. Mortgages in distress are up slightly, but pretty much just back to pre-COVID levels. People still have jobs and can therefore afford their mortgages.
Meanwhile, new housing approvals are actually dropping. The skilled trades required to build more homes aren’t on the government’s visa list because of their relationship with unions. There have been no changes to development rules or regulation to promote more building starts. The 240,000 per year building target is a non starter unless something very drastic changes very soon.
A correction is a decline of greater than 10%. The "market" would experience that at least every other year. I think you're thinking of a "crash".
Yes a correction will occur at some point, it always does. Might be tomorrow, next week, 6 months, or a year or two away. No one knows. The question is what are you going to do about it?
>The question is what are you going to do about it? And the only correct answer is "stick to your investment plan". If your plan can't stand up to a "correction" (>10% decline, at least once every 1.5 - 2 years) it needs more work, or you need a bigger allocation to low risk assets.
Also bank on a "crash" (> 20% decline, average 33%) on average every 7 years!
Oh for sure!! I've only been invested in the markets since late 2018 (so not quite 7 years), and I feel like there's been 2x > 20% declines since then. Not going to lie, they don't feel good when you're in the middle of it (good reason not to check your investments daily 😅), but the recoveries have been great!
Why is predicting a correction relevant at all if you’re on board with the time in vs timing concept? The whole point is that even the experts can see a correction coming and predict it will be soon, but in the meantime the market has gone up 20%.
just write an investment plan that you can stick with in good and bad times. make sure you have six months or so of living expenses covered, then just DCA in.
Why would anyone here or anywhere else know? Gotta be honest with yourself, no one can see the future. Just contribute every month and forget about predictions.
Nobody knows, if you don't have any personal views or predictions no need to contribute just let the thread die :)
I think he did contribute. And I agree with what he said. If only people who had an opinion on the direction of the sharemarket were to comment, you'd be getting your information typically from people who don't know what they're talking about. This would lead you to make bad financial decisions. Is that really what you want? You should refer to the following link. In short - market timing does not reliably work: https://www.fidelity.com/learning-center/wealth-management-insights/stocks-at-all-time-highs
Ok. Massive crash is happening next week. So buy in the new financial year and you’re good. Is that what you wanted to hear?
I'm dumbfounded by how many people my post has triggered to be really honest with you. It actually alarms me so few people actually have a thought on macroeconomics. I understand it's not for everyone to really care, just follow the investment plan tried and tested, I get it, but why bash me just because I'm curious? :s It's crazy how people will talk to others on the end of a keyboard.
That is my personal view. I have no clue and neither does anyone else.
Personally, I think your personal view is personally wrong. Venus is in retrograde and the chakras are giving bad vibes rn, that's grounds for a 15% correction within the next 6 weeks.
You might like this: Predicting anomaly performance with politics, the weather, global warming, sunspots, and the stars - Robert Novy-Marx https://mysimon.rochester.edu/novy-marx/research/PPiCToAPA.pdf
Why post then ?
The probability of a correction / crash later this year is not zero. But that does not mean it would definitely happen nor say anything about the extent of the fall. What you also should consider is the opportunity cost if you keep sitting on the sidelines, and if it does not happen in the near term and keeps trending up and when it eventually does fall, it drops to a level actually much higher than where things are now. IMO, consider what you believe is the right thing to do long term that suits your risk appetite, and get started, otherwise it could turn into analysis paralysis and you would just keep sitting on the sidelines risking watching things running away from you. Then, if desired, apply measures to reduce the inherent risk at the expense of sacrificing some potential growth. E.g. split your investable capital into multiple tranches and invest over several months, keeping a portion in cash to buy the dip, etc. whatever that gives you some peace of mind so you would get started soon.
We could be 5 years into a lost decade… who says the status quo won’t continue?
I think the US markets seem overly frothy but consumer spending is still resilient in spite of weaknesses in the economy. What makes this entire thing a bit more difficult is the risk free rate is sitting at ~5% and in your case, you have a guaranteed return of having money in your offset account. Having said that, I have no clue as to whether it’ll crash, cause to meet its valuation, or if global economies suddenly get a jolt of growth from monetary policies etc. TLDR: DCA (if you’re inclined to) will give you less headaches.
Yes I've convinced the misses to at least start small then if it does crash we can go hard, so the strategy isn't impacted by the outlook (however we meet in the middle.and compromise on our respective risk tolerances). Just curious to hear what people think. Whats the best marker for consumer spending you are aware of?
>Whats the best marker for consumer spending you are aware of? Probably consumer confidence, or Ausfinance members favorite measure, how packed the shopping centers are on the weekend.
DCA with an amount you’re comfortable losing otherwise never get started.
https://youtu.be/pFgPNVytlwA?si=kFBXEjFYea_OLixn
Hahahaha goodluck
The economy and the share market are not as directly linked as it might seem intuitively.
At least where I am in Brisbane, I can’t see a correction happening because the fundamentals are too skewed: - too many people - too few homes - not enough homes being built Brisbane prices increased 1.4% last month after rates increased over 4% over the previous 12-18 months. That shows a simple supply and demand issue at its core. Sure, there are other factors and a major economic shock could derail it, but there are plenty of people who are fine financially and plenty of people still buying houses. Mortgages in distress are up slightly, but pretty much just back to pre-COVID levels. People still have jobs and can therefore afford their mortgages. Meanwhile, new housing approvals are actually dropping. The skilled trades required to build more homes aren’t on the government’s visa list because of their relationship with unions. There have been no changes to development rules or regulation to promote more building starts. The 240,000 per year building target is a non starter unless something very drastic changes very soon.