Time in the markets...

[bchip]

So much for
- "dont time the markets its all about Time in the markets" and
- "just buy the market no-one can outperform anyway"
as these 2 mantras seem to be common knowledge

After 15 years buying Satrix40 today you would have a -25% return (excluding dividends) in dollar terms.

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[saturnz]

well don't put all your eggs into the Satrix

you heard of that one too right?

 

[cguy]

Choosing the worst point in recent history to do something like the 15-year return analysis, is a form of selection bias.

It’s also the same trick people use to try get you to invest in their fund - they pick the fund that has performed best at the current point in time. They also only make such adverts when they have a fund that has done well.

While I would expect all gains to return at some point, it could be 2, 5, 10 or even 20 years later. What I do believe is that many people have been advertising the markets as being a lot more stable than they really are.

10 years from now we’ll probably have to keep our eyes open for people saying, things like “the markets offer far superior returns - if you bought Apple on the 23 March 2020 ....”

 

[bchip]

Choosing the worst point in recent history to do something like the 15-year return analysis, is a form of selection bias.

Worst point in history??? Its a 15 year chart and its starts at the lowest point in 15 year
The worst point wouldve been anywhere in $72 point...not at the $34 point

 

[phly]

i don't think anyone saw this virus coming - and even those that expected it did not account for the global ramifications that it may come entangled with. They are now living a reality that we once saw in movies, cities under lockdown. A pandemic sifting through populations like millet. My worry is that we will see more pain before the sun rises again. So for those "opportunistic ones" buying "the bottom" may just come to find that a new floor has opened below the floor that they just bought.

 

[3WA]

So for those "opportunistic ones" buying "the bottom" may just come to find that a new floor has opened below the floor that they just bought.

Then you buy that too.

 

[saturnz]

i don't think anyone saw this virus coming - and even those that expected it did not account for the global ramifications that it may come entangled with.

when a bubble bursts, its not the size of the pin that matters, but rather the size of the bubble

in this case there were a few people who have warned against the size of this bubble (Peter Schiff, Mike Maloney, Richard Wolff, Mark Blyth, Dr Doom etc) they were just ignored

 

[Tomtomtom]

And I see two points in this chart 9 years apart where you would double your money.

Somewhere between the extremes is where most of us end up.

 

[SoldierMan]

Then you buy that too.

An optimist I see!

 

[cguy]

Worst point in history??? Its a 15 year chart and its starts at the lowest point in 15 year
The worst point wouldve been anywhere in $72 point...not at the $34 point

I said “recent” history, and I was referring to the fact that you are choosing to do this analysis now, so I am referring to the end point.

Choosing a different starting point that showed even worse returns would have simply been an additional layer of selection bias.

 

[Splinter]

I said “recent” history, and I was referring to the fact that you are choosing to do this analysis now, so I am referring to the end point.

Choosing a different starting point that showed even worse returns would have simply been an additional layer of selection bias.

I personally am thinking about investing in the market right now. All SA local shares.

Sasol
Capitec
Naspers
OM

Your thoughts?

 

[themba990]

-25% if you sell and if you ignore dollar cost averaging. Both of which are weak assumptions. The market will go up and down but for long term investment there are few viable alternatives.

 

[cguy]

I personally am thinking about investing in the market right now. All SA local shares.

Sasol
Capitec
Naspers
OM

Your thoughts?

Hard to say. My guess is that things will get worse for a while as this escalates in the US and Europe, but will start to bounce back when we see evidence of the “number of infected” curve bending. Of course, that may be too late, but I doubt it will recover instantaneously.

My stocks have ridden this all the way down, but I don’t realistically need to sell ever (more than enough non-equities assets and cash - I’ve been risk averse and anticipating a crash), so even if it takes 20 years to recover, I’m ok with that. I may still try time the bottom to get in a bit more though.

 

[Splinter]

Hard to say. My guess is that things will get worse for a while as this escalates in the US and Europe, but will start to bounce back when we see evidence of the “number of infected” curve bending. Of course, that may be too late, but I doubt it will recover instantaneously.

My stocks have ridden this all the way down, but I don’t realistically need to sell ever (more than enough non-equities assets and cash - I’ve been risk averse and anticipating a crash), so even if it takes 20 years to recover, I’m ok with that. I may still try time the bottom to get in a bit more though.

My thoughts are this. 10000 people die a year in SA just due to road fatalities.

35000 odd in the USA. 26000 in Russia.

So, I'm thinking it is the panic that is driving down stocks. Of course, closing down things will make everything dip.

But either we recover early, or it doesn't really matter. So I am going to pump some money into stocks at this low. And just wait.

 

[SauRoNZA]

And what about all the returns made in between?

Or the massive returns that will be made if you buy now and ride it out for the next five years as it goes back (and beyond) where it came from?


Time in the market pretty much always wins. It’s when you pull out of the market that is important and you would be an idiot to do that now.

It’s buying time, not selling panic.

 

[Düber]

It’s buying time, not selling panic.

I agree. I'm scratching out available cash and buying, even if it goes down further hopefully in a few years my older self will thank me.

 

[SauRoNZA]

I agree. I'm scratching out available cash and buying, even if it goes down further hopefully in a few years my older self will thank me.

Exactly.

Unless you are retiring in the next few years, or already retired and have an investment portfolio that is providing you with an income you should be rejoicing right now.

 

[saturnz]

/me watches the markets capitulate

 

[saturnz]

I agree. I'm scratching out available cash and buying, even if it goes down further hopefully in a few years my older self will thank me.

in the last days of 1980s the NIKKEI almost hit 40000 points, since then it has struggled to go above 30 000

 

[pb41]

Famous quote from Warren Buffett; “Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.”