Out of the market after 35 years

[midgesgalore]

I am looking at funding residential care for my wife from her investments in the not too distant future.
I am glad I have a bit of a cash cushion otherwise - in perfect hindsight - I would have substantially cashed-in mid February like the OP (but not everything). Hopefully our cash cushion will not make me a distressed seller down the road a bit.
I am optimistic this will largely be over by the summer of 2020.
Thanks to all fools who posted on cash cushions and safety margins over the years.

There will always be another mutant virus.
I think everyone has their own unique set of circumstances and need to make their specific investment judgements therefore their actions should not be harshly judged.

Respectfully, midgesgalore

[GoSeigen]

Did I panic? Suppose I did - but my time horizons are limited and no longer looking for long-term capital growth.

Will sleep hopefully a bit better tonight - no longer worrying too much what is happening in Far East markets overnight.

Bet you're happy this morning too.

GS

[gbjbaanb]

I started investing in 1958, in a small way, admittedly. I continued investing through the various market setbacks, in 1974, 1987, 2000 and 2008

74 to 87... 13 years
87 to 00... 13 years
00 to 08... 8 years, OK.. (wasn't it 2007 it all went wrong?)
08 to 20... 12 years..

hmm..

/me pencils in Dec 2032 reminder to sell everything.

[terminal7]

Again many thanks for comments - some more considered than others. Really the main point that I was trying to make was that after considerable thought that weekend, I felt that the market had little upside and had considerable downside. Hence given my personal circumstances, I took the opportunity of a small uptick last Tuesday to get out 'lock stock and barrel'. My action reflected my analysis of the situation based upon views (as a professional economist) of the UK economy post Brexit, the probity of the current UK govt, the long-term bear market and the coronavirus implications. I had no foresight into the OPEC meeting consequences.

As has been surmised, I am fortunate to be comfortable. Nevertheless, I have no intention when faced with the potential loss of tens of thousands to 'hold tight' as to quote a famous economist 'in the long term we are all dead'. The common argument put forward about selling up is that there is a psychological barrier to re-investing as the seller is always trying to identify the bottom of the market and misses out continually as the market rebounds. Not sure that I agree with this - but for me I do not intend to get back into the market. I agree that for some a complete sell-off could be deemed to be an over reaction. For instance, I could have kept my Tesco shares - but am I glad that I sold up Whitbread. However that is hindsight.

On a more personal level, I am sure that most of us come to face the occasional major personal/professional crossroad in our lives. I felt that just over a week ago I needed to make a weighty financial decision. Just wanted to share and in no way advice - DYOR!

T7

[terminal7]

Glad I did not keep my TSCO shares after all.

T7

[Mike88]

Again many thanks for comments - some more considered than others. Really the main point that I was trying to make was that after considerable thought that weekend, I felt that the market had little upside and had considerable downside. Hence given my personal circumstances, I took the opportunity of a small uptick last Tuesday to get out 'lock stock and barrel'. My action reflected my analysis of the situation based upon views (as a professional economist) of the UK economy post Brexit, the probity of the current UK govt, the long-term bear market and the coronavirus implications. I had no foresight into the OPEC meeting consequences.

As has been surmised, I am fortunate to be comfortable. Nevertheless, I have no intention when faced with the potential loss of tens of thousands to 'hold tight' as to quote a famous economist 'in the long term we are all dead'. The common argument put forward about selling up is that there is a psychological barrier to re-investing as the seller is always trying to identify the bottom of the market and misses out continually as the market rebounds. Not sure that I agree with this - but for me I do not intend to get back into the market. I agree that for some a complete sell-off could be deemed to be an over reaction. For instance, I could have kept my Tesco shares - but am I glad that I sold up Whitbread. However that is hindsight.

On a more personal level, I am sure that most of us come to face the occasional major personal/professional crossroad in our lives. I felt that just over a week ago I needed to make a weighty financial decision. Just wanted to share and in no way advice - DYOR!

T7

These days I keep 50% invested in cash as I'm now a very conservative investor. Fortunately I don't rely on the income even though I am retired. Up until last night my shares/Trusts were 8.3% down on the year and 17.4% down on the month but fear things are going to get a lot worse as today's markets suggest. I will neither be buying nor selling stocks in the foreseeable future but when previous share collapses have occurred I have been an enthusiastic buyer and if I were younger would possibly do so again depending on the situation in a couple of months time. Certainly I would not consider selling anything at present.

[terminal7]

I had previously written:

the probity of the current UK govt

The budget has provided evidence of more deception (maybe self-deception) of this government.

T7

[terminal7]

Interesting the gainsayers are now silent,
T7

[richfool]

Terminal 7, congratulations on the decision made in your OP and indeed the timing of it, whatever the motive. In view of these exceptional times there must be merit, not to mention peace of mind, in being out of the markets. Though the way things are going, it could lead to a subsequent discussion on whether to be in cash or gold!

[scrumpyjack]

Yes I too congratulate you on your felicitous timing!

Also to be congratulated is Peter Hargreaves who sold £500 million of HL stock recently, though that still left him in the market for a billion or two.

[redsturgeon]

Once upon a time when the FTSE was up around 7500 I had some cash waiting to be invested but couldn't see many bargains out there.

If the FTSE drops below 7000, I thought, I might start putting some money in.

Then it dropped below 7000 and before I had a chance to act, below 6000.

I still struggled to see any bargains but if it falls below 5000 I thought, my money is definitely going in.

So today it is below 5000...maybe if it gets to 4000 I might put some money in.

Johnm

[richfool]

Yes, I think deliberation and prevarication has to be the order of the day (figuratively speaking) - of the time.. This isn't just a market correction or a recession. C-19 is an exceptional situation with potentially far reaching consequences and I wouldn't want to be too quick to jump in to anything for some time yet.

[Clitheroekid]

I wish I'd completely ignored the conventional wisdom that the market will self-correct and `time in the market is more important than timing the market'.

I wish I'd acted like a frightened lemming instead of a seasoned investor, and sold the lot like T7.

I wish it would all just go away.

[bungeejumper]

Yes, I think deliberation and prevarication has to be the order of the day (figuratively speaking) - of the time.. This isn't just a market correction or a recession. C-19 is an exceptional situation with potentially far reaching consequences and I wouldn't want to be too quick to jump in to anything for some time yet.

Yes, I've been reading some press comments about how most crises start when a fall in the market causes damage to the wider global society - and that the market apparatus has had lots of practice at handling such situations. But here we've got it the other way round - a problem in global society that's wrecking the daily operation of companies, and then the markets themselves. And we haven't had one of those since the 1930s, so nobody has much of a clue what to do. It doesn't look as though lowering interest rates is going to make much of a difference, especially at a time when they're near zero anyway.

There are probably limits to how far one could push that sort of analogy, but one thing's for sure. All the politicians in the world, and all the central bankers, can't influence the direction of things when it's a virus that's calling all the shots. Viruses don't buy funds, and they don't have votes, and they don't accept being bullied, and they do things their own way. It's debatable whether President Trump understands any of that.

That said, I don't think we can blame this thing entirely on the coronavirus. Part of the reason why I went 60%-75% cash last year was that there seemed to be any number of things that could burst the bull market balloon, and it was hardly worthwhile to even try and guess which one it would be.

And even if I'd tried, the coronavirus wouldn't have been on the shortlist, because it hadn't been invented yet.

BJ

[terminal7]

CK

a frightened lemming instead of a seasoned investor

How dare you - a lemming - never - squirrel maybe.

T7

[Pipsmum]

A very clever, sensible and I hope, very happy squirrel who took the time to say something at the time. Thank you and I wish I'd been listening both you, and to myself too. I said to my husband the week before the beginning of the slide, that it perhaps wasn't a great time to be in stock and maybe we should sell up and pay the credit cards off... and didn't. So there we are. Best to go shopping for more instead but have no money to do so. Ho hum. It's only money.

[Clitheroekid]

CK

a frightened lemming instead of a seasoned investor

How dare you - a lemming - never - squirrel maybe.

T7

Well if we're to stick with the rodent analogy I'm afraid you're really rather more of a (very sensible) rat leaving the sinking ship - though if the pejorative image of a rat is a bit strong perhaps you can settle for a gopher, as in gopher the exit, now!

[Bagger46]

Investors have been selling, in droves, of...lemmings, being nearer to the mark than squirrels as an analogy, imho. Else the markets would not have dived.

Squirrels would know a good thing when they see one(our blighters in the garden certainly do!), and those of squirrels having played a blinder by selling at a cracking time, they would now get back in, at the very least gradually, not stay out. Lemmings would continue to hide away from the market, permanently scared by the current events, and being more mathematically challenged, not noticing inflation creeping on their hoard, or the lack of divis dosh clicking in.

My view is that in 5 odd years time maybe, but 7-10 for certain(still a small span of retirement, mine being in its 20th year), the squirrels would be the better off of the two. By some margin. And by then the lemmings are not sleeping so soundly after all.

Now, as a market plodder myself, who knows...

In jest

Bagger

[Wizard]

In retirement living off OAP, various draw downs from SIPPs/ISAs etc. Over the last 2/3 years have rebalanced my pension pots (had my own company - hence basically self-employed with no company pension) from 90%/10% to 40%/60% re shares/non-share based bonds. I took advantage of the uptick this am to sell all my shares. Yes I took a nasty hit last week but over the long-term the pension pot has done well. Now after 35 years owning shares - I am no longer a shareholder. Will probably re-invest in more non-share based income bonds in order to generate further income streams to substitute for loss of dividends.

Did I panic? Suppose I did - but my time horizons are limited and no longer looking for long-term capital growth.

Will sleep hopefully a bit better tonight - no longer worrying too much what is happening in Far East markets overnight.

T7

Don't visit this board on TLF much, but just read this thread. Whatever the reason, nicely played sir, very nicely played!

[terminal7]

Thanks for the kind words and keep the jests going.

As I have emphasised it was my personal circumstances that led me to make the final decision just 2 weeks ago. I am not going to post evaluate and claim any startling insights. I have been an average investor in the past able to surf the upswings (like many on these boards) and partially steer clear of too much speculative equities. If the dividend is very high - ask why? Very basic stuff forced upon me when I left a director level job in an international consultancy in 1991 and set up with a colleague a new economic international consultancy. It did fairly well over some 27 years (expanded and contracted towards the end) and provided me with a good income - however certainly less than if I had stayed with my previous employer - but the job satisfaction was by far greater. Hence I was able to transfer a £40k pension pot from my previous company in 1991/2. I was courted by several financial advisers and used one for maybe 3/4 years. I soon realised that to build up my pension pot to a level that would keep me comfortable in later life a lot of serious work had to be done. It also became evident from discussions with others that those effectively self-employed without a company pension were being provided relatively poor advised with various failures to disclose interests and an in built incentive to churn. I came to the conclusion that I had to avoid commissions at all cost and carefully review asset managers charges against performance. Just do the maths. The situation is much better now than in the 1990s.

As regards to equities, I felt that there was sufficient information in the public arena to take an educated view on investments. As I said I have had some startling successes and some real dogs (maybe as some of us will have more time on our hands in the coming months we could start a thread on 'Our worst dogs'?) Also I was in the fortunate position to visit CEOs and CFOs of many listed cos via my work. Of course this info was very anecdotal but certainly you did get a feel for how certain companies were being run at the time. Also I said earlier, I was able to benefit from intimate knowledge of the international consultancy sectors and heavily invest in 6 companies - 5 of which were taken over during a period of 5/6 years or so. No inside information just knowledge of who was winning the big projects, what major contracts were being won at what appeared well below cost etc. Many like me were not subsequently surprised by the demise of Carillion and more recently the rapid fall of Capita.

Sorry long way of saying, experience does bring some insights and that my circumstances screamed out to me to eliminate exposure to equities.

T7

ps Yesterday my OH and I said goodbye (holding back the tears) to my DiL and our 2 very young grandchildren as we relocated them from London to a very small village in the country not sure when we will see them next. My son has to stay for his job. For us looking after our grandchildren twice a week was a joy. Now we are semi-stuck in our flat in London for some months it would appear. Clearly we are better off than most so health wise apart we have the resources to live well . I take no joy in what has happened and wish everyone here that we all successfully weather the storm.