Ten years since Lehman's - If you'd remained invested you'd be quid’s in


#1

Originally published at: https://whichinvestmenttrust.com/ten-years-since-lehmans-if-youd-remained-invested-youd-be-quids-in/

Many investors fear getting caught up in the next crash, but what might be the affect of not one but two huge crashes on your portfolio? We take a look at how both the Dotcom crash and the GFC effected investors who remained invested throughout and the results might surprise you. As we mark ten…


#2

Interesting statistics. It took longer to recover from the dotcom crash than for the GFC, unless of course you were invested in non-tech funds, which I wasn’t.

I was burned badly in the dotcom crash. I was still a teenager when it happened but I had been investing since I was 15 and thought I knew it all whilst i was doing well, which I was for some time, but when the market turned i was like the Emperor with no clothes. lesson learned, painfully!


#3

Following the GFC I did some work for a client on whether to stay in, or try and time, the market. We set the cashing out and getting in criteria and to shorten the story; for 70 years in the All-share you would have been better off to stay in (987% v 897%). The reason, the market timing was blown out with the “dead cat bounce” in 2002. All that sweat and tears ruined with one bad move. Stay put!


#4

So are you saying that f you had remained invested for all of those 70 years you would have made a return of 987%, versus 897% if you had attempted to time the market?


#5

@citygirl Yes. We set the stoploss at 15% and the buying back in when market past the 200 day moving average (which was very conservative), and even that failed. It shows that you can be clever and get away with it sometimes but one mistake will wipe out years of duckin’ and divin’.!


#6

I find it rather condescending that we’re all advised to stay in when Institutional investors are the first to pull the plug.I’m an income investor and at the moment am reinvesting my income until my Wife retires. I have two investments currently in Isas over two years but I would dread to have too many as once they are sold in the event of Market panics, well that is a lot of income to lose free of tax. I wonder how other investors with multi Isas deal with Market downturns?


#7

@handymoney personally I stay in and let the income build up, to then hopefully spot the bottom and buy back in. Easily said though. And who is to say that institutional investors always get it right :hear_no_evil: PS I also advise this to my clients!


#8

If you are investing for income you probably don’t need to worry too much about the market going up or down, as long as you get your income, your dividend. Investment trusts often have reserves so many of them are okay in a downturn so you don’t need to worry too much about that.

If you are concerned share your holdinghs on here, people will be only to happy to help you.

People on here know what they’re talking about, @james_pigott for instance is a really smart bloke.


#9

Thank you for your replies. @james_pigott… I am reinvesting my income into shares. I trust your comment says hold the income in my account until the shares bottom out and then buy at a low price?
@andreacz… yes I have studied the trusts and look for long term dividend growth Quite happy to share my holdings. They are Merchants trust ,CQS New City high yield, Henderson Far East Income,(currently in the Doldrums) and lastly a growth and Income trust Brunner which is my largest holding Capital wise.