Share market goes belly up - what would you do

Storing the money is the easy part. Do whatever you want with it as long as it's not in a geared share fund when the market is surging to record highs!
I don't keep it to pile back into the market when it drops, I put it to other use. Previously paid down PPOR debt, deposit for IP, this time possibly into unlisted commercial property. I use the geared share funds to generate capital to deploy elsewhere.

Willy

 

I wouldn't consider it cash, it is the same as drawing on debt. If you are going to invest simply because of a 20% crash it might be best if you don't invest sounds like a recipe for disaster. You will need to be very selective now. Invest in some companies with strong revenue growth, that are scalable, that have large market opportunity and have good strong visionary leadership founder lead with a lot of skin in the company. Could be SaaS companies. Their are unloved companies not followed by the large funds some because of poor liquidity. Watch the next results report in Feb , you could pre empt the report although some companies appear to already have high expectations built in to their price. A good report that doesn't meet high expectation could see as usual a sell off, but of courses there will be companies that surprise and good gains may be missed. There may well be companies that get noticed. The rising tide hasn't lifted all boats yet, but if you think you can predict when the peak will be and how low the tide will go after peak, good luck. I expect their will be buying opportunities in the next 6 weeks which will give a guide to market direction thinking beyond that before results are known is foolish and pointless.

 

Use LOC and equity loans gear up into high yielding companies and take advantage of the opportunity to get even higher yields. Already started building a portfolio for yield would be great to get better yields on some that already get grossed up yield of 9%. WES RFF TCL MYS MQG UMAX WEB FLT DDR AMC SSM CGF BAP.

 

Just checked first one...grossed up yield 5.75%???

 

At first sign short the living daylights out of overpriced biotech and consumer and tech stocks

12 months later consider a reentry to quality tech and biotech stocks

 

That first sign that you look for , is that the one that says "excuse me investors but this sharemarket rocket is scheduled to crash in the coming days, would you please leave via the emergency exits in an orderly fashion?"

Willy

 

Nope, you can easily short after the first two days of dips and still be ahead

But even in this market I hold a bunch of shorts just in case.... on most of my accounts I’m probably 10-20% shorts. Of course, the longs are killing it now, which is a worrying sign

 

I have read on PC a number if times that if shares tank wont impact on yields?? According to previous bust cycles

but this cant be right as capital has eroded and must therefore impact on yields

 

Do you hold or have ever held shares?

 

Not sure where you read that because one can take a pull your pants down 60 cannon broadside and the price may drop 60 plus percent but and this is only my opinion but the div's may only drop in the 15--25 % ..
I'll have a look at one Bank for the past 25 years that i have a small interest in ,and post the div's to give you a understanding ..imho..
//CBA//
final231.000100.00%14/08/201926/09/2019Interim200.000100.00%13/02/201928/03/2019Final231.000100.00%15/08/201828/09/2018Interim200.000100.00%14/02/201828/03/2018Final230.000100.00%16/08/201729/09/2017Interim199.000100.00%22/02/201704/04/2017Final222.000100.00%17/08/201629/09/2016Interim198.000100.00%16/02/201631/03/2016Final222.000100.00%18/08/201501/10/2015Interim198.000100.00%17/02/201502/04/2015Final218.000100.00%19/08/201402/10/2014

 

not as simple as that, shares price crashes due to many reasons earning is part of it
It true during a down turn and crashes some earning will be hit, it won’t be the same as sunshine and lollipop times but general it not price crashes 40% yield drop 40%

Shares price are trade every second all it takes is 2 parties agree on the price and it mark price as such for the business but there are many

reasons why they sold at that price, could be margin call, could be someone want to get out regardless of business fundamental, it could be some fund manager want to reposition his portfolio.

that why roughly knowing the business fundamentals you can buy some crazy bargains during crashes and down turn and profit handsomely

large business yield usually hold up well during down turn as they have the muscle and the market power to knock smaller one out and maintain their earnings
Who can comes and knock Wes out who owns Bunnings, Bunnings probably has the muscle to knocked Magnet Marts and Miter 10 out in a down turn and maintain their earnings

 

Is this something I need to add to my retirement bucket list?

 

And also knowing what to buy and when in downward market, who can pick the bottom all the time?

 

Not sure,but i was reading in one of Big--Warrens books that if you wait till 65 to start your sex life it may not end well..

 

choices

 

If you hadn't thought of this possibility before, then it's too late ...

 

Consistently absolutely no one. Once in a blue moon only a few lucky ones.

Cheers
Oracle

 

Bottoms, Tops, in-between it doesn’t matter. Whether it’s@dunno with total return or @SatayKing / me with dividends just get on with it and keep investing, compounding returns then one day you’ll marvel at the miracle of it all. Historical data proves this but when the going gets tough and doubt arises (this time it’s different) sometimes a bit of blind faith in the process doesn’t go astray.

The hardest part given we’ve been taught that success requires hard work / striving is that investing is an incredibly simple pursuit. That’s not how we’re wired which can be our downfall.

@dunno nailed it recently in one of his posts but don’t tell him
I said that. Simple logically but bloody hard psychologically though if you can “get yourself strong” the rewards are immense:

 

maybe even less, most just claim the market will do something but cant put a specific time line on it,

i can be the oracle too, i will tell you now the market will have new highs and new lows.

time line is forever


The root of all evil in investing is greed and fear !,

 

Essentially yes it is.
However not if the funds have been put there rather than into shares specifically for that purpose. It is effectively a savings account with higher return than term deposit.

Having a balance of property, shares, super(majority shares) and accessible debt reducing cash(offset) late in the cycle is my strategy.

I am risking the opportunity cost of those funds, however at the heights of the current US markets, I consider the risk of not being able to buy in at lower prices - acceptable for those funds.

Post GFC was a life changer for me, learnt a lot of lessons and made a lot(relatively) of money. Next crash I will attempt to do the same. As has been mentioned here, companies that have sound fundamentals before a crash still have those same fundamentals afterwards. I also focus on companies that have large cash holdings. Macarthur coal got slammed by the GFC but had ~$300m in cash. They clearly weren't going to go bankrupt, there was still a large market for their product and shortly afterwards the market recognised this and a return somewhere in the realm of 800% was achieved.

CSL was circa 28 bucks... Seems crazy looking at today's price of $304

Maybe it will be different this time, NO, definitely it will be in some way different this time, maybe a Japan style stagnation is coming, but maybe it will be similar to all other cycles in recent history and Warren Buffet's old saying will once again ring true.

Be fearful when others are greedy and greedy when others are fearful.
It certainly feels like greed is the order of the day at the moment. I note WB is being accused of holding too much cash lately. Coincidence?