brave call
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nellyonthewing
Well-Known Member
I am a beginner at this I put some money in Fundsmith after reading some articles last week and it fell 5% its like I'm a jinx. I'll sit tight on it for a few years anyway.
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manchester blue
Guest
Today is more like it. Dow, Nasdaq and S&P all 2% plus up, Asia rocketed and FTSE +1.6%. It's not going to correct last week just yet but a lot better.
journolud
Well-Known Member
Can never get my head round why shares are so volatile, even the blue chip ones. Doesn’t seem to take much to set everyone flapping yet they tell investors to sit tight
Yeah it was a 3 year slump, and took almost 6 years from going below 6k to get back to that level, which I was waiting for to cash out unit trusts. During that time house prices were booming though, so it wasn't a great time to wait.Post 9/11 merged with the dot com crash which is probably why the whole thing took so long to recover.
ChicagoBlue
Well-Known Member
- Joined
- 10 Jan 2009
- Messages
- 18,448
Because when the velocity of change in interest rates is perceived as rapid, then equities get rerated downwards because of the discounting of future cash flows AND the higher risk premium for owning stocks over bonds with rising interest rates.Can never get my head round why shares are so volatile, even the blue chip ones. Doesn’t seem to take much to set everyone flapping yet they tell investors to sit tight
Over the weekend, into today, interest rates pulled back and the market took off.
Throw in the J&J vaccine approval, and the Federal Reserve saying they font see inflation being an issue for quite some time, and we move back to the Goldilocks scenario of an improving economy, zero interest rate central policies, and STILL large amounts of government stimulus.
It’ll either lead to a short sharp correction (10-20%) when it ACTUALLY all changes at once (FOMO) or it will change at a pace that is manageable and workable.
Smart money says the latter is very hard to achieve...but then they don’t know when the former might takeover the market sentiment/mentality!
As always, invest in what you want, but want to be invested in what you have!
hampshireblue
Well-Known Member
- Joined
- 10 Dec 2014
- Messages
- 1,450
It's a massive fund and so usually provides a steady growth over a medium/long term. Terry Smith who runs it, isnt one for reacting to the market. He chooses good companies and holds for the long term. It's worked so far but a heavy tech sell off would have an impact on it.I am a beginner at this I put some money in Fundsmith after reading some articles last week and it fell 5% its like I'm a jinx. I'll sit tight on it for a few years anyway.
west didsblue
Well-Known Member
- Joined
- 2 Oct 2011
- Messages
- 32,342
A heavy tech sell off would have a huge impact on lots of funds with Apple and Microsoft alone making up 40% of the value of the Dow, and tech stocks making up a similar proportion of the S&P500, with the biggest 7 companies all being tech stocks and making up 30% by themselves. It would be catastrophic to the US economy if there was a huge sell off so it's fairly clear that the government will do everything it can to support that sector.It's a massive fund and so usually provides a steady growth over a medium/long term. Terry Smith who runs it, isnt one for reacting to the market. He chooses good companies and holds for the long term. It's worked so far but a heavy tech sell off would have an impact on it.