S&P500 at record highs - time to stay in or pull out?
Discussion
A question for you all, and the caveat is I fully understand no one can predict the future:
My SIPP pension plan is invested in a low fee S&P500 tracker, I have a few family ISAs also tracking the S&P500 and all have done unsurprisingly well. As the S&P 500 is now at record highs, I'm hearing Warren's saying in my head “to be fearful when others are greedy and to be greedy only when others are fearful".
My thinking is: Russia only has to launch a missile on the wrong side of a NATO border, the middle east is pretty hairy at the moment (ok - maybe not much changed there but it's not looking great atm), The global economy looks to be settling into this period of nominal interest rates 4-6%, insolvencies are rising in western countries, the picture looks quite challenging at the moment and we may go through a difficult period before a recovery takes place.
But investor confidence seems to be high? When considering the risk free rate is now quite attractive, I'm a little puzzled as to why?
Cards on the table: I missed the global financial crisis market as I was in my 20s and had no investments to speak of. Covid - opportunity passed me over, I think we could all see that the situation was going to spread to our shores and wreak havoc, to the degree that it did I'm not sure anyone could have predicted, but I stayed in throughout the period and saw the fall and rise of my SIPP as we went through 2020-2022.
So, I'm sitting here now thinking: do I be proactive and sell everything to cash, and just sit tight until things stabalise a bit more? I'm thinking worst case the markets keep moving upwards and I may lose out 5-10% return by holding cash for a year (not taking inflation into account). But if things plummet then the gains to going back in at a much lower level could work out well long term.
Again, I'm not asking anyone to predict the future. Maybe share what you are doing, and what your thoughts are on the current market? Could be a strategy is to hold a proportion in cash, and a proportion in a fund or funds, what are you doing and do you have any good mitigation strategies?
My SIPP pension plan is invested in a low fee S&P500 tracker, I have a few family ISAs also tracking the S&P500 and all have done unsurprisingly well. As the S&P 500 is now at record highs, I'm hearing Warren's saying in my head “to be fearful when others are greedy and to be greedy only when others are fearful".
My thinking is: Russia only has to launch a missile on the wrong side of a NATO border, the middle east is pretty hairy at the moment (ok - maybe not much changed there but it's not looking great atm), The global economy looks to be settling into this period of nominal interest rates 4-6%, insolvencies are rising in western countries, the picture looks quite challenging at the moment and we may go through a difficult period before a recovery takes place.
But investor confidence seems to be high? When considering the risk free rate is now quite attractive, I'm a little puzzled as to why?
Cards on the table: I missed the global financial crisis market as I was in my 20s and had no investments to speak of. Covid - opportunity passed me over, I think we could all see that the situation was going to spread to our shores and wreak havoc, to the degree that it did I'm not sure anyone could have predicted, but I stayed in throughout the period and saw the fall and rise of my SIPP as we went through 2020-2022.
So, I'm sitting here now thinking: do I be proactive and sell everything to cash, and just sit tight until things stabalise a bit more? I'm thinking worst case the markets keep moving upwards and I may lose out 5-10% return by holding cash for a year (not taking inflation into account). But if things plummet then the gains to going back in at a much lower level could work out well long term.
Again, I'm not asking anyone to predict the future. Maybe share what you are doing, and what your thoughts are on the current market? Could be a strategy is to hold a proportion in cash, and a proportion in a fund or funds, what are you doing and do you have any good mitigation strategies?
Not advise, simply sharing my plan. I'll just stick with it. It may go down for now, who knows. But I don't plan to use the money in the near term so any losses are academic as to a degree are any gains. Long term investment mean sticking with the plan through goo and bad times. Also the S&P 500 has been a record highs loads of time, by definition it hits new highs quite regularly over the long term.
In short, ask your self when do you expect to need / want the money out of the market. If it's years away I'd stick with it. If its in the short term I would sell and take pleasure in the gains.
In short, ask your self when do you expect to need / want the money out of the market. If it's years away I'd stick with it. If its in the short term I would sell and take pleasure in the gains.
I'm no financial expert but I'm sticking with mine for another 10 years or so as part of my retirement plan. If you look at the long-term pictures, highs are just part of the fluctuations that happen over time, but the idea is that over a long enough period of time, it should return you more.
Jonathan27 said:
Not advise, simply sharing my plan. I'll just stick with it. It may go down for now, who knows. But I don't plan to use the money in the near term so any losses are academic as to a degree are any gains. Long term investment mean sticking with the plan through goo and bad times. Also the S&P 500 has been a record highs loads of time, by definition it hits new highs quite regularly over the long term.
In short, ask your self when do you expect to need / want the money out of the market. If it's years away I'd stick with it. If its in the short term I would sell and take pleasure in the gains.
Same for me. - I'm 10 years away (minimum) from spending it, so it doesn't really matter what happens in the next few years. The bet really is "Do you believe that the US economy will be bigger and better in 10 years' time than it is today?" - Answer = probably still yes.....In short, ask your self when do you expect to need / want the money out of the market. If it's years away I'd stick with it. If its in the short term I would sell and take pleasure in the gains.
And remember that back testing shows that continuing to drip in through good times and bad performs just as well as saving through the ups and downs and picking bottoms to invest in. Warren would also say that DCA is the best approach to take.
If anything, I choose to see it such that a drop in price this year would actually enable me to buy in at a better (i.e. cheaper) price....(i.e. while a high price feels good, it is actually bad, and while a drop feels bad, it's actually good.....)
Jonathan27 said:
Not advise, simply sharing my plan. I'll just stick with it. It may go down for now, who knows. But I don't plan to use the money in the near term so any losses are academic as to a degree are any gains. Long term investment mean sticking with the plan through goo and bad times. Also the S&P 500 has been a record highs loads of time, by definition it hits new highs quite regularly over the long term.
In short, ask your self when do you expect to need / want the money out of the market. If it's years away I'd stick with it. If its in the short term I would sell and take pleasure in the gains.
Fair enough, I'm not going to draw on my pension for at least 15-20 years, so the money isn't needed now. It's more along the lines of seeing the market at a potential peak, some geo-political instability, and a risk it all could lead to a crash. And being frank - taking a step to sell high / buy low if that is what transpires. I have a fantasy of possibly being able to add 50%+ value to my pension if things to go to pot (GFC / Covid - examples of where you could have achieved that and more).In short, ask your self when do you expect to need / want the money out of the market. If it's years away I'd stick with it. If its in the short term I would sell and take pleasure in the gains.
I get the long term investing plan, but if you have an inkling, a voice in your head telling you that things could take a turn here, then pulling out temporarily and then going back in at a large reduction on todays value would be a strategy to explore I'm thinking.
Colonel Cupcake said:
I would just hold. If there is a crash, then you will get more for your money if you are still buying and they will return to current levels or better soon enough.
Cool, yes I'm still contributing through my employer pension plan so no worries of that stopping any time soon. thanks for your thoughts fat80b said:
Same for me. - I'm 10 years away (minimum) from spending it, so it doesn't really matter what happens in the next few years. The bet really is "Do you believe that the US economy will be bigger and better in 10 years' time than it is today?" - Answer = probably still yes.....
And remember that back testing shows that continuing to drip in through good times and bad performs just as well as saving through the ups and downs and picking bottoms to invest in. Warren would also say that DCA is the best approach to take.
If anything, I choose to see it such that a drop in price this year would actually enable me to buy in at a better (i.e. cheaper) price....(i.e. while a high price feels good, it is actually bad, and while a drop feels bad, it's actually good.....)
Understood, and yes I'm all in for betting on America, hence why all my main investments solely track the S&P500 (plus the low fees of the funds).And remember that back testing shows that continuing to drip in through good times and bad performs just as well as saving through the ups and downs and picking bottoms to invest in. Warren would also say that DCA is the best approach to take.
If anything, I choose to see it such that a drop in price this year would actually enable me to buy in at a better (i.e. cheaper) price....(i.e. while a high price feels good, it is actually bad, and while a drop feels bad, it's actually good.....)
I agree the continued investment model is the right way to go, and my pension is continuing to achieve just that, DCA investing.
so your last point is really where I'm thinking - I have no cash to buy in at a better rate as all my investments are tied up in S&P500 trackers. So this is what is driving my thoughts to sell some/all and then have the option of buying back in, whilst getting some sort of interest on holding cash (not sure how much atm, maybe 2-3%). If I sit and do nothing, then if it crashes I have no instrument to buy back in and benefit, that's really what I'm considering.
S1MMA said:
a voice in your head telling you that things could take a turn here, then pulling out temporarily and then going back in at a large reduction on todays value would be a strategy to explore I'm thinking.
Sure - with the benefit of hindsight, that seems easy, but can you honestly say you would have re-entered the market last year when *everyone* was predicting a recession and literally nobody was predicting a 23% gain... unlikely imho. Much more likely to have stayed out and missed the rise. Investing is about discipline...... and thinking you can "beat the market" because you have a "voice in your head" is not really that sensible if you think about it. The only thing we know is that we don't know what is going to happen next.
Some interesting thoughts here also:
https://www.forbes.com/advisor/investing/stock-mar...
"Wall Street is currently anticipating double-digit S&P 500 earnings growth in 2024 and 2025, and the market could experience a significant correction if companies fall short of those expectations."
https://www.forbes.com/advisor/investing/stock-mar...
"Wall Street is currently anticipating double-digit S&P 500 earnings growth in 2024 and 2025, and the market could experience a significant correction if companies fall short of those expectations."
15th jan 2021 3760 record high for s&p 500 what would you do if the question ws asked back then?
Hindsight i'd have put more money in.
Unless you need the money
An example of trying to time the market for the pst 6 months I have been in and out of ELF beauty. with £600 in and out I have made £90 a pretty good return 15%.
If i had just held those shares from when i first bought them id be up 60% £360
its a lesson i hve learned the hard way.
Hindsight i'd have put more money in.
Unless you need the money
An example of trying to time the market for the pst 6 months I have been in and out of ELF beauty. with £600 in and out I have made £90 a pretty good return 15%.
If i had just held those shares from when i first bought them id be up 60% £360
its a lesson i hve learned the hard way.
fat80b said:
Sure - with the benefit of hindsight, that seems easy, but can you honestly say you would have re-entered the market last year when *everyone* was predicting a recession and literally nobody was predicting a 23% gain... unlikely imho. Much more likely to have stayed out and missed the rise.
Investing is about discipline...... and thinking you can "beat the market" because you have a "voice in your head" is not really that sensible if you think about it. The only thing we know is that we don't know what is going to happen next.
All very true, and I have never predicted a peak or bottom! I think if I sold at 4900, and the market dropped below 4000 I would be comfortable buying back in between 3500-4000, then go back to holding long terms and continue with the standard pension plan contributions I have. This is just a purely hypothetical example and yes it's very easy to say that and not live through a live example. Again - the most recent example was Covid - we all saw things happening in real time in Dec 2019 / Jan 2020, when the virus entered our shores, numbers started rising, whilst we couldn't expect what happened in it's entirety, we could see things could get bad. I just kick myself for not reacting, even if I sold half to cash that would have done me well. Are we in a similar time but with different levers pulling the markets around? This is the question.Investing is about discipline...... and thinking you can "beat the market" because you have a "voice in your head" is not really that sensible if you think about it. The only thing we know is that we don't know what is going to happen next.
The voice in my head is really the combination of geo-political instability, economic news, and sentiments from "experts" on the tech companies in the US being somewhat overvalued, so it's not just a wild whim, although there are obviously no guarantees here and it's all about risk/reward as always, I'm tipping more towards now being risky staying in, but your view / comments and experience are all helping me with my general observations and thoughts. So many thanks for your view.
Interesting timing.......
The consensus will undoubtably be to; hold as time in the market is more important than timing the market!?
May as well end the thread there?
Friday was a very interesting day for the S&P 500, it closed up 52 points on the day...nice!
There are quite a few commentators and analysts out there pointing out that although the SPX closed up on the day, within 1% of the all time high print the SPW (equal weighted S&P of the same names) retreated. On Friday 51 more stocks of the 500 fell than gained.
There are apparently a handful of occasions since the SPW came into being (1990) when this has occurred, the market did continue higher before a correction came about.
There is another financial analyst at one of the US banks drawing a parallel with financial events of Q4 1987....?
Admittedly it is a small sample size, but it does show financial markets are not exactly in equilibrium, right now?
I tend to have a core position and adjust around that as and when I see opportunities, or more to the point consider my holdings when things don't make sense to me?
I had a good run up from October last year and have taken stock, in part, for now?
The consensus will undoubtably be to; hold as time in the market is more important than timing the market!?
May as well end the thread there?
Friday was a very interesting day for the S&P 500, it closed up 52 points on the day...nice!
There are quite a few commentators and analysts out there pointing out that although the SPX closed up on the day, within 1% of the all time high print the SPW (equal weighted S&P of the same names) retreated. On Friday 51 more stocks of the 500 fell than gained.
There are apparently a handful of occasions since the SPW came into being (1990) when this has occurred, the market did continue higher before a correction came about.
There is another financial analyst at one of the US banks drawing a parallel with financial events of Q4 1987....?
Admittedly it is a small sample size, but it does show financial markets are not exactly in equilibrium, right now?
I tend to have a core position and adjust around that as and when I see opportunities, or more to the point consider my holdings when things don't make sense to me?
I had a good run up from October last year and have taken stock, in part, for now?
asfault said:
15th jan 2021 3760 record high for s&p 500 what would you do if the question ws asked back then?
Yeah I'm trying to think back, obviously early 2020 was a bloodbath and I'm thinking by Jan 2020 I could have reacted to what was happening generally in the world towards covid and pulled out some equities to cash. By Jan 2021, things had recovered, restrictions on travel and holidays had relaxed to some destinations, the airlines were really hurting. If I had sold during Jan 2020 before the main crash - so sold at around 3300, I think I would have gone back in during April when the market was recovering, so lets call it 2600. I wouldn't have predicted the peak or bottom, but following the general trend of the recovery that would have given me a roughly 22% discount on my portfolio. The real longer term benefit from that would be at current values my portfolio would be double the value nearly now, instead of 48% higher now compared to the 3300 level in Jan 2020. This is all hypothetical and best guess of how I would have reacted. There is no way I could have known peak/bottom as I said, but Jan 2020 we could see the signs of a pandemic coming, can we compare that to now with the points I've made above about world events/overvaluations?
So to answer your question, I would have already made my move before Jan 2021, and as we were still in a recovery and the world wasn't in the tough spot it is now - I wouldn't have the same view on things that I have now. BOE interest rates in Jan 2021 were 0.1%, Russia hadn't invaded Ukraine, the middle east was "calmer" there are a lot of differences from then to now.
But good to think about that period also and why pulling out wouldn't have made sense
clubsport said:
Interesting timing.......
The consensus will undoubtably be to; hold as time in the market is more important than timing the market!?
May as well end the thread there?
Friday was a very interesting day for the S&P 500, it closed up 52 points on the day...nice!
There are quite a few commentators and analysts out there pointing out that although the SPX closed up on the day, within 1% of the all time high print the SPW (equal weighted S&P of the same names) retreated. On Friday 51 more stocks of the 500 fell than gained.
There are apparently a handful of occasions since the SPW came into being (1990) when this has occurred, the market did continue higher before a correction came about.
There is another financial analyst at one of the US banks drawing a parallel with financial events of Q4 1987....?
Admittedly it is a small sample size, but it does show financial markets are not exactly in equilibrium, right now?
I tend to have a core position and adjust around that as and when I see opportunities, or more to the point consider my holdings when things don't make sense to me?
I had a good run up from October last year and have taken stock, in part, for now?
Interesting timing indeed!The consensus will undoubtably be to; hold as time in the market is more important than timing the market!?
May as well end the thread there?
Friday was a very interesting day for the S&P 500, it closed up 52 points on the day...nice!
There are quite a few commentators and analysts out there pointing out that although the SPX closed up on the day, within 1% of the all time high print the SPW (equal weighted S&P of the same names) retreated. On Friday 51 more stocks of the 500 fell than gained.
There are apparently a handful of occasions since the SPW came into being (1990) when this has occurred, the market did continue higher before a correction came about.
There is another financial analyst at one of the US banks drawing a parallel with financial events of Q4 1987....?
Admittedly it is a small sample size, but it does show financial markets are not exactly in equilibrium, right now?
I tend to have a core position and adjust around that as and when I see opportunities, or more to the point consider my holdings when things don't make sense to me?
I had a good run up from October last year and have taken stock, in part, for now?
Time in the market rather than timing the market, I'm all for that long term. Just my short term radar is picking up some enemy bogey activity possibly coming our way.
Some interesting facts there on friday - thanks for that. Very interesting point on the SPW - I've had a look at that now, thanks. I will have a look at Q4 1987.....
So on your last points, are you saying you have made any moves since oct? or just stayed in?
Don't pay any attention to my trading, it's in the past!
I added to a core S&P position last October as data & fed expectation by the market were encouraging to take advantage of year end rally.
So far, In 2024 we have made all time highs on S&P with curious technical events playing out?
I have since learnt that S&P has never made an all time high with bonds selling off as they did on that day, so that is apparently a one off?
That doesn't make much sense, but the markets are like the sea, they flow and all I look for is a wave to ride rather than be a Canute!
I am still invested in the S&P, but less so right now, I do look to re invest at some point.......in the not too distant future, I appreciate interest rates are "actually" coming down this year, so hardly bearish!
In your position of not needing the money for 15 years, you may as well stay in.
I have too many years experience across various asset classes to just ignore financial market price action, that does NOT mean I am right at all, but I learn something new in the markets most days, which you don't need to consider if you are a long term invester looking at an annual pension statement.
Good luck!
I added to a core S&P position last October as data & fed expectation by the market were encouraging to take advantage of year end rally.
So far, In 2024 we have made all time highs on S&P with curious technical events playing out?
I have since learnt that S&P has never made an all time high with bonds selling off as they did on that day, so that is apparently a one off?
That doesn't make much sense, but the markets are like the sea, they flow and all I look for is a wave to ride rather than be a Canute!
I am still invested in the S&P, but less so right now, I do look to re invest at some point.......in the not too distant future, I appreciate interest rates are "actually" coming down this year, so hardly bearish!
In your position of not needing the money for 15 years, you may as well stay in.
I have too many years experience across various asset classes to just ignore financial market price action, that does NOT mean I am right at all, but I learn something new in the markets most days, which you don't need to consider if you are a long term invester looking at an annual pension statement.
Good luck!
S1MMA said:
A question for you all, and the caveat is I fully understand no one can predict the future:
My SIPP pension plan is invested in a low fee S&P500 tracker, I have a few family ISAs also tracking the S&P500 and all have done unsurprisingly well. As the S&P 500 is now at record highs, I'm hearing Warren's saying in my head “to be fearful when others are greedy and to be greedy only when others are fearful".
My thinking is: Russia only has to launch a missile on the wrong side of a NATO border, the middle east is pretty hairy at the moment (ok - maybe not much changed there but it's not looking great atm), The global economy looks to be settling into this period of nominal interest rates 4-6%, insolvencies are rising in western countries, the picture looks quite challenging at the moment and we may go through a difficult period before a recovery takes place.
But investor confidence seems to be high? When considering the risk free rate is now quite attractive, I'm a little puzzled as to why?
Cards on the table: I missed the global financial crisis market as I was in my 20s and had no investments to speak of. Covid - opportunity passed me over, I think we could all see that the situation was going to spread to our shores and wreak havoc, to the degree that it did I'm not sure anyone could have predicted, but I stayed in throughout the period and saw the fall and rise of my SIPP as we went through 2020-2022.
So, I'm sitting here now thinking: do I be proactive and sell everything to cash, and just sit tight until things stabalise a bit more? I'm thinking worst case the markets keep moving upwards and I may lose out 5-10% return by holding cash for a year (not taking inflation into account). But if things plummet then the gains to going back in at a much lower level could work out well long term.
Again, I'm not asking anyone to predict the future. Maybe share what you are doing, and what your thoughts are on the current market? Could be a strategy is to hold a proportion in cash, and a proportion in a fund or funds, what are you doing and do you have any good mitigation strategies?
Sell everything to cash, watch the market increase by 33% whilst your cash is eroded by inflation, decide enough is enough, lump it all back in and watch the market plummet by 20%My SIPP pension plan is invested in a low fee S&P500 tracker, I have a few family ISAs also tracking the S&P500 and all have done unsurprisingly well. As the S&P 500 is now at record highs, I'm hearing Warren's saying in my head “to be fearful when others are greedy and to be greedy only when others are fearful".
My thinking is: Russia only has to launch a missile on the wrong side of a NATO border, the middle east is pretty hairy at the moment (ok - maybe not much changed there but it's not looking great atm), The global economy looks to be settling into this period of nominal interest rates 4-6%, insolvencies are rising in western countries, the picture looks quite challenging at the moment and we may go through a difficult period before a recovery takes place.
But investor confidence seems to be high? When considering the risk free rate is now quite attractive, I'm a little puzzled as to why?
Cards on the table: I missed the global financial crisis market as I was in my 20s and had no investments to speak of. Covid - opportunity passed me over, I think we could all see that the situation was going to spread to our shores and wreak havoc, to the degree that it did I'm not sure anyone could have predicted, but I stayed in throughout the period and saw the fall and rise of my SIPP as we went through 2020-2022.
So, I'm sitting here now thinking: do I be proactive and sell everything to cash, and just sit tight until things stabalise a bit more? I'm thinking worst case the markets keep moving upwards and I may lose out 5-10% return by holding cash for a year (not taking inflation into account). But if things plummet then the gains to going back in at a much lower level could work out well long term.
Again, I'm not asking anyone to predict the future. Maybe share what you are doing, and what your thoughts are on the current market? Could be a strategy is to hold a proportion in cash, and a proportion in a fund or funds, what are you doing and do you have any good mitigation strategies?
That's the way it works lol
clubsport said:
Don't pay any attention to my trading, it's in the past!
I added to a core S&P position last October as data & fed expectation by the market were encouraging to take advantage of year end rally.
So far, In 2024 we have made all time highs on S&P with curious technical events playing out?
I have since learnt that S&P has never made an all time high with bonds selling off as they did on that day, so that is apparently a one off?
That doesn't make much sense, but the markets are like the sea, they flow and all I look for is a wave to ride rather than be a Canute!
I am still invested in the S&P, but less so right now, I do look to re invest at some point.......in the not too distant future, I appreciate interest rates are "actually" coming down this year, so hardly bearish!
In your position of not needing the money for 15 years, you may as well stay in.
I have too many years experience across various asset classes to just ignore financial market price action, that does NOT mean I am right at all, but I learn something new in the markets most days, which you don't need to consider if you are a long term invester looking at an annual pension statement.
Good luck!
all understood and thanks for your thoughts, all useful!I added to a core S&P position last October as data & fed expectation by the market were encouraging to take advantage of year end rally.
So far, In 2024 we have made all time highs on S&P with curious technical events playing out?
I have since learnt that S&P has never made an all time high with bonds selling off as they did on that day, so that is apparently a one off?
That doesn't make much sense, but the markets are like the sea, they flow and all I look for is a wave to ride rather than be a Canute!
I am still invested in the S&P, but less so right now, I do look to re invest at some point.......in the not too distant future, I appreciate interest rates are "actually" coming down this year, so hardly bearish!
In your position of not needing the money for 15 years, you may as well stay in.
I have too many years experience across various asset classes to just ignore financial market price action, that does NOT mean I am right at all, but I learn something new in the markets most days, which you don't need to consider if you are a long term invester looking at an annual pension statement.
Good luck!
dingg said:
Sell everything to cash, watch the market increase by 33% whilst your cash is eroded by inflation, decide enough is enough, lump it all back in and watch the market plummet by 20%
That's the way it works lol
LOL - I totally get this, I have done similar on a few equities in my time................That's the way it works lol
All fun and games.......
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