ASX Shares ASX Index, when will it be the bottom?

Discussion in 'Shares & Funds' started by iloveqld, 27th Mar, 2020.

Join Australia's most dynamic and respected property investment community
Tags:
  1. iloveqld

    iloveqld Well-Known Member

    Joined:
    11th Jan, 2017
    Posts:
    322
    Location:
    Brisbane
    Today closed 4842.40 after a 3 days up, nothing to hold it now, what will be the next level?
     
  2. sfdoddsy

    sfdoddsy Well-Known Member

    Joined:
    19th Mar, 2019
    Posts:
    218
    Location:
    Sydney
    Alas, I think it will go back down. My Oz portfolio has performed much worse than my international shares (19% down over the last year compared to 3%) and given I suspect despite this weeks pop international will go back down pending concrete Covid advances, this is likely to continue.

    Oz shares seem to be a perfect storm for underperformance in the current situation - exports reliant on China, domestic concentrated in the sectors that are being hit hardest (banks, retail, property, resources).

    Dividends were the saving grace of the OZ market post GFC. I'll be very curious to see what arrives in the March quarter, and especially the June one.

    I have a chunky bond/cash component, but whilst I might start dollar costing, I wouldn't jump into OZ shares.

    Bitter experience has taught me something like VDHG or VDBA is more sensible.
     
    iloveqld likes this.
  3. iloveqld

    iloveqld Well-Known Member

    Joined:
    11th Jan, 2017
    Posts:
    322
    Location:
    Brisbane
    @sfdoddsy so I learnt from this was to wait until Mar and Jun-Jul ;)
     
    Kramerica12 likes this.
  4. solotak

    solotak Well-Known Member

    Joined:
    13th Sep, 2017
    Posts:
    74
    Location:
    Melbourne
    What about foreign markets?
    Thoughts on Singapore, Hong Kong, or China recovering faster than ASX?
     
  5. sfdoddsy

    sfdoddsy Well-Known Member

    Joined:
    19th Mar, 2019
    Posts:
    218
    Location:
    Sydney
    A consensus before the kerfuffle was that emerging markets/Asia were undervalued and likely to better long term than the US.

    Were I to take a punt, that's the direction I'd punt in.
     
    Silverson likes this.
  6. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    9,294
    Location:
    Sydney
    We don't know when the bottom is until 6-12 months after it happens.

    Dead cat bounces are something we're going to see a lot of. Trying to pick the actual bottom is fraught with risk - read up on "catching a falling knife". What you think might be the bottom may just be a pause on the way to further falls.

    One way to mitigate this is to just use "dollar cost averaging" to invest in smaller amounts more regularly and ignoring the movements of the market. Even that is risky right now unless you have a very long term investing timeframe.

    I wouldn't be rushing into the market yet - especially if you are new to investing. Despite the volatility we're seeing, markets won't rebound back to new highs any time soon - the economic fallout from the virus lockdowns will be felt for quite a few years yet. We haven't really started to hear the bad economic news yet.
     
    Abhi_Prop, Phineas, Peter P and 10 others like this.
  7. Brumbie

    Brumbie Well-Known Member

    Joined:
    5th Mar, 2018
    Posts:
    135
    Location:
    Canberra
    Totally agree. Spend your time refining your shopping list of assets/companies with super strong balance sheets and with products/services/locations that will be in demand constantly. Hint. It's time consuming but I think it will be rewarding.
     
  8. charttv

    charttv Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    247
    Location:
    Perth
    I agree with and endorse all of this
     
  9. iloveqld

    iloveqld Well-Known Member

    Joined:
    11th Jan, 2017
    Posts:
    322
    Location:
    Brisbane
  10. iloveqld

    iloveqld Well-Known Member

    Joined:
    11th Jan, 2017
    Posts:
    322
    Location:
    Brisbane
  11. Willy

    Willy Well-Known Member

    Joined:
    12th Sep, 2017
    Posts:
    266
    Location:
    NSW
    Not questioning your advice at all, but it amazes me that people were happily dollar cost averaging before the crash but deem it too risky now.

    Willy
     
    number 5, Bunbury, Greedo and 8 others like this.
  12. Perthguy

    Perthguy Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    11,677
    Location:
    Perth
    I'm still dollar cost averaging in super.
     
    Bunbury, oracle, iloveqld and 3 others like this.
  13. The Falcon

    The Falcon Well-Known Member

    Joined:
    24th Oct, 2010
    Posts:
    2,729
    Location:
    Sydney
    Yep that is ridiculous
     
    number 5, PKFFW and pippen like this.
  14. Silverson

    Silverson Well-Known Member

    Joined:
    11th Jun, 2016
    Posts:
    637
    Location:
    Melbourne
    I’m still a proud dca’r

    no one knows where bottom is
     
    Realist35, Bunbury and Greedo like this.
  15. oracle

    oracle Well-Known Member

    Joined:
    16th May, 2007
    Posts:
    953
    Location:
    Canberra
    This is exactly why people say being successful at investing in the share market is simple but not easy.

    I happily dollar cost average but simple test I use for myself is when VAS was at $90 I asked myself would I be happy to buy VAS at $85 if given the option. The answer is always Yes definitely, then when it is at $85 I would just remember my thought process and would not hesitate to pull the buy trigger.

    Now you know if I was happy to buy VAS at $85 what my answer would be when it is at $60. Needless to say I have been very pleased every time I purchased over the last 5 weeks even though some purchases have been at a higher dollar value at the time of purchase the only thing going in my mind was jeez look at how many extra shares I got at for eg. $75 compared to if I was buying at $90 just a few days ago.

    Cheers,
    Oracle.
     
    Phineas, sharon, MangoMadness and 5 others like this.
  16. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    9,294
    Location:
    Sydney
    So are you questioning my advice or aren't you? You said you weren't but then seemed to immediately do exactly that? Perhaps I misunderstood you?

    I was specifically referring to people who are new to the market and looking to "catch a bargain" without necessarily having a long term view. Looking for quick returns is NOT what DCA is about.

    I don't see any reason not to wait for the volatility to settle a bit before encouraging new investors to enter the market. Or else take a very long term view and start entering in small chunks now.

    Were you referring to something else? Perhaps you could expand on your comment?
     
    Silverson likes this.
  17. Nodrog

    Nodrog Well-Known Member

    Joined:
    5th Jun, 2006
    Posts:
    10,077
    Location:
    .
    Not advice:).
     
    The Falcon and Simon Hampel like this.
  18. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    9,294
    Location:
    Sydney
    Good point - it wasn't actually advice.
     
  19. Silverson

    Silverson Well-Known Member

    Joined:
    11th Jun, 2016
    Posts:
    637
    Location:
    Melbourne
    This has hit the nail on the head! DCA really makes sense when it’s for the long game, we seem to always look past that.

    If you have a solid plan, and stocks you want to buy then DCA takes all the thinking and emotions out of investing. Just buy the same amount of the same stocks at the same time. Then come on here and blab about home brew and coffee.... not pointing the finger at anyone in particular
     
    Player, sharon, The Falcon and 2 others like this.
  20. Bunbury

    Bunbury Well-Known Member

    Joined:
    16th May, 2017
    Posts:
    285
    Location:
    Melbourne
    I have no idea when the we'll hit the bottom or what that might look like. Health wise, my layman opinion is that we won't be among the worst hit countries but that we should not be complacent and none of us really know.

    Economically, the government has shown that it is willing to do what it can to stave off financial armageddon. Sure, as it stands there are grey areas, some areas that need to be sorted out, and there will some who are going to fall through the cracks; but these are early days and these things will take a little bit of time to sort through. The feds appear willing to do what it takes and at this stage have already pledged 16% of GDP to economic stimulus.

    Hopefully this will facilitate some sort of confidence and eventual recovery on the market and in the broader economy when we get through the other side.*

    ASX All Ords so far:

    - 7,255 Feb 20, 2020
    - 4,564 March 23, 2020 (37% drop from peak)
    - 5,194 March 30, 2020 (volatility abounds - up 6.56% today and up 13.8% over the past week from the lowest point but still down 28% since the peak on Feb 20)​

    All Ords during the GFC:

    - 6,873 Oct 31, 2007
    - 5,222 Jan 22, 2008 (24% drop)
    - 3,111 Mar 6, 2009 (54% from peak to trough)​

    In this downturn I've made a small purchase of VAS at $63 and will be looking place further orders (an active DCA approach if you will) with a long term view to hold. I'm also patiently watching the progress of a number of individual stocks with some interest.

    Keeping the thread's title in mind, anyone think the All Ords might drop as low as 4,000 points (which would be a 44.8% drop from peak to trough)?

    * My post is fence sitting rather than advice or prediction.
     
    Last edited: 31st Mar, 2020
    Phineas, mrdobalina and Perthguy like this.