"Five reasons to be wary of the markets" - advice please

[BCO]

So I stumbled across this article via Reddit and it seems rather... pessimistic.

As someone who's really not savvy on this kind of thing, but has some money invested, what should I do?

I have a bit of cash in Allan Gray's balanced unit trust fund and quite a bit more in their equity fund. I also have a small RA with Liberty and a preservation fund (I forget with whom). In my limited knowledge, it seems to me that the more conservative policies should fare better should the markets tank, so maybe my RA policies are ok, and maybe I should move my funds from the Allan Gray equity fund to the balanced fund.

Or would I better off maybe withdrawing all my Allan Gray funds and paying off debt like my car?

 

[Cius]

Stocks are fairly high right now and average PE ratio's are fairly high but not bubble levels. There will probably be corrections downwards but then there always are. I'm not too worried right now.

 

[chicken247]

So I stumbled across this article via Reddit and it seems rather... pessimistic.

As someone who's really not savvy on this kind of thing, but has some money invested, what should I do?

I have a bit of cash in Allan Gray's balanced unit trust fund and quite a bit more in their equity fund. I also have a small RA with Liberty and a preservation fund (I forget with whom). In my limited knowledge, it seems to me that the more conservative policies should fare better should the markets tank, so maybe my RA policies are ok, and maybe I should move my funds from the Allan Gray equity fund to the balanced fund.

Or would I better off maybe withdrawing all my Allan Gray funds and paying off debt like my car?

Doves abound and the rand compensates. Avoid decision points. Using longterm equity to fund short term debt doesn't sound like a plan , just do nothing dude, maybe get a hobby.

 

[Paul_S]

Or would I better off maybe withdrawing all my Allan Gray funds and paying off debt like my car?

Just think about this for a second ...
You want to use funds which have a good chance of growth over the long term to pay off a short term, depreciating asset?

i.e.
You car is probably devaluing at a rate of at least 10% per annum (more in the first 2 to 3 years).
Over a period of 5 years your vehicle has probably lost 50% of it's value.
There are market corrections every now and then but usually not more than around -30% and the recovery is usually fairly quick (a few months to a couple of years).

So one is a depreciating asset and the other is an appreciating asset.
Now ask yourself that same question again.

 

[supersunbird]

Mmmm, trying to time the market is difficult. What if it just keeps rising further for a while? Or should one go into cash (moneymarket) to realise your profits and then buy back in after the "crash"? Should one go half/half (leave half in, move other half to moneymarket)? Is moving to a balanced fund the solution?

Think I will leave mine where it is and keep up my monthly contributions and increase it I can if the market corrects or crashes.

 

[BCO]

Ok, thanks for the input guys. Will likely just leave things as-is.

 

[Brontosaurus]

Mmmm, trying to time the market is difficult. What if it just keeps rising further for a while? Or should one go into cash (moneymarket) to realise your profits and then buy back in after the "crash"? Should one go half/half (leave half in, move other half to moneymarket)? Is moving to a balanced fund the solution?

Think I will leave mine where it is and keep up my monthly contributions and increase it I can if the market corrects or crashes.

And then other the other hand you'll be sitting where I am, cash under my mattress so to speak which I didn't invest due to what I considered (and still consider) ridiculously high markets. This was a month ago. Top 40 has risen by 2000 base points since then - nearly 5%.

I'm dropping it in tomorrow. It's long term anyway and I'm tired of watching the market soar ahead without my money in it.

EDIT: Schitty maths