Riding the Stock Market Roller Coaster - Navigating Volatility
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- Опубликовано: 11 июл 2024
- In this video, I tackle the fears surrounding price fluctuations in the stock market, particularly the emotions we face as investors due to volatility. I'll guide you through effective strategies, ensuring you stay focused on your financial goals. Lastly, I wrap up with the crucial mindset of staying the course, so you can ride out the highs and lows of investing.
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Timestamps
00:00 Introduction
00:33 Understanding Stock Market Fluctuations
02:08 Managing Risk with Diversification
06:23 How To Avoid Volatility
09:30 Cross-Asset Diversification Benefits
15:20 How To Accept Volatility
18:14 Stay The Course
21:20 Community and Final Thoughts
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Standard recessions, even something like GFC are scary but I know myself enough that I would be able to live through them with 100% stock allocation. What is really scary is a long term decline, like the one that hoppened in Japan, where stocks remained below their all time highs for decades. That is something that I am not preppared for. I would probably throw the towel after 10 years or so.
I have around £250K in ISAs (wife and mine), and getting used to regular 4 figure swings is hard. Last month I gained £11K from market movements, but even that isn't necessarily 'enjoyable' for a number of reasons, ranging from, "I have years until retirement, that means everything is more expensive" to "Yeah, but the bubble is just getting bigger". You're constantly fearing the worse.
Still, educating yourself, including watching videos like this, helps as much as it can.
P.S:- I even side-hustle poker and play blackjack, so it's not like I'm not used to 4 figure swings. But the market just feels so divorced and distant from anything you can do. Especially poker, if profitable, you know you have the tools to personally overcome any slump and ride out any variance. With the market, you just have to strap in and trust the process!
Awesome educational vid. You produce an excellant balanced proffessiomal guide.
A CFP based in nz
Glad it was helpful @selwynparker5793
Thanks Ramin, your videos have helped me a lot over the last few years.
Glad you like them @UKGeezer
Thank you for a very educational video that explained the nuances of the market in a calming and factual way. Hello from a newer older investor who is a subscriber, from New Orleans. Thanks very much!
Glad it was helpful @gentillygirl545
❤❤❤ another excellent video. Loved that Teddy got featured today and love his simplistic way of life!
I agree that your community is very supportive and knowledgeable as we all share our war wounds and successes ❤️
Hi @feliciaflinders thank you for your support! Ramin
Taking data from 2012 misses out two huge crashes in 2000 and 2008 so the numbers are worse than this video. And it’s crashes that scare people. We’ve seen the S&P 500 crash by over 50% and NASDAQ by 80% . In one case taking 13 years to recover from. If you are in your 20s to 40s you can take these risks. If over 50 I think not unless you have a large income.
As recommended by Ben Graham I keep 50% in cash and rebalance beyond a certain threshold. If stocks grow to 75% I rebalance to 50/50 or if they fall to 25%.
And right now I invest in a global dividend fund with a much lower PE ratio. At current levels I think a crash is not far away.
Sell before the crash, and buy back at.the bottom.
@@timetraveller3063You can read the stock market right?
To what extent would the dividends be maintained in the event of a crash ?
And, as always, thank you for producing another very educational and helpful video……Rob
My pleasure @roberthorsford4266
I am in “building wealth mode so if the market falls I see it as an opportunity to buy more stocks.
My attitude might change when I hit retire and want to drawdown my investments….. I can’t find many videos or advice on best way to manage funds in drawdown mode
Thank You.
You're welcome @DPTrainor1
Great video!
Glad you enjoyed it @jamescs9832
Here's a SIPP anomaly regarding FSCS protection. Typically a SIPP (such as Vanguard self custody) is only protected by the FSCS up to £85k, so choosing the investment company is now very key. Now compare this to a more traditional pension house where the pension is defined as a 'contract of long-term insurance', meaning FSCS will protect up 100% of the pension value.
Something I've not seen on any finfluencer channels Ramin, this for me is key in determining risk (not volatility).
I'll tell you what I find more frightening. Watching my capital being eroded by inflation. One of my funds is a global tech fund and it fluctuates quite wildly (but mostly up). In 5 years, it's up 240% so as it's earned so much capital growth, I ignore the noise now. If it dropped 20% on Monday morning, I'd buy more of the fund.
The perfect scenario for me would be an asset type that does the opposite of the stock markets. So I could switch between the two. But I've done ok playing the long game - investing every month for years and years.
I benchmark my performance against inflation. It's up 24% in the 3.5 years or so I've been measuring it. Basically, it's key to keep ahead of it. Although all major benchmarks (me, S&P500, FTSE350, MSCI AW) are ahead of inflation, it is a constant looming thing we can't ignore, and the FTSE350 is barely ahead.
Still, "bank savings", my other benchmark, significantly has underperformed inflation, which helps show me that even with volatility, it's objective better than cash in the bank, or worse, under a mattress earning nothing.
Congrats on that tech fund, by the way, awesome returns.
@@Bosshog-WealthHealthBetterment Thank you. I've been tempted to reduce the tech fund because it seems a bit expensive now, but it seems to pay to do the opposite of the so-called RUclips analysts. I've just opened a fund covering the FTSE 350 too, so well done with your approach and strategy.
@@RobCLynch To be honest, I don't have any FTSE350, but I have been buying a lot of £THRG recently, now my 3rd biggest position, albeit miles behind £ATT and £SMT, which have likewise done well for me ;).
Good luck with the new position, and investing in general.
How would you know when to switch ? In my 30+ years experience of share trading buying an making a paper profit is easy. It is knowing when to sell which is difficult. Even worse I ended up playing "double or quits" with Marconi shares until they were almost worthless.
@@MrDuncl For me, I'd wait for the ex dividend date to pass then follow the share price. Many etfs drop in value after XD as many investors bail. But I tend to hang on until the price bounces back a bit. I'll keep one eye on my next etf and sell the first one when I am sufficiently satisfied.
Please note that I only do this as a fun thing, using my trading account. My serious platform invests in global funds and as these take time to buy and sell (unit trusts), it is less practical to be trying to catch price movements.
Great 👍🏿
Thank you @lolololo3726
BIG fan of your videos and podcasts Ramin, This video is brilliant!
Do you have a video with a more in depth insight into a bond ladder? i am sure i have heard you reference this in your podacsts and would love to learn more about it.
Hi @montyloads here it is studio.ruclips.net/user/videoUqrO9Wi6rSY/edit
Thanks so much Ramin 🙏
Great video
Thanks for the visit @VoiceOfThe
I have 3 funds in my Vanguard SIPP (Global all cap 50%, Developed world ex UK 30% and US Equity 20%). I know there’s a lot of overlap with these funds but I like all three. Is there an obvious disadvantage in holding all three rather than just one e.g. hidden fees? I have a similar situation with my T212 ISA where I have invested in the following three ETFs (all Vanguard): S&P 500 20%; Developed World 30% and All-World 50%.
Brilliant video.......thank you
So nice of you @willlsmith8063
Another great video - IMO could be your best yet. Request if I may, could you do vid on comparing drawdown of a single global stocks fund v’s passive multi asset funds with 4or5 asset classes (ie: more diversified than LS funds) to show how they perform with sequence of return risk. This should be interesting to many who approaching retirement.
Thank you for this Ramin, as usual enjoyed and learnt from the mix of technical info, practical understandable advice, and how to deal with what is going on inside this amateur investor's head. Wish you were around when I started out 45 years ago.....Funnily enough time in the game can make one strongly phlegmatic about the utter nonsense bought about by successive governments and CEOs which I suppose is yet another amateur trait to recognise and try to guard against.
Glad it was helpful @daviddb2528
Sound advice, be more Teddy. I hold LS80 and Dev World Ex UK Fund in a 1:3 ratio, gives me a single digit bond holding, dials down the home bias and much cheaper than VWRL
teddy-peutic ... 😁
Legal & General Global 100 index fund has a 3 year sharpe ratio of 115 which is an excellent risk/reward ratio
You’re missing a decimal point! It’s 1.15.
@@rezwhapwhoops! Thanks for pointing that out
On the top of equity portfolios - have you done any videos on ideas on instruments to protect a portfolio in down markets?
Sometimes I get fed up watching (usually temporary) downward swings and think I could be doing something about it!
Thanks Ramin, this was one of the most enjoyable videos you have made. Just a note, I found a tiny mistake in the chart of the Stock Market roller coaster: the 40% and 60% on the Ticker and the Name are inverted. Like... Ticker LS40 -> 60% equity, Ticker LS60 -> 40% equity.
Or am I wrong? 😅
I get my linen shirts from Marks & Spencers white...for summer..they were good enough for Roger Moore..classy truly British..another excellent video Ramin old chap😂
Hi @user-wl7jy9wu9m I always try to be a snappy dresser 😂. Thanks for watching!
I don't understand this reference to 'bonds crashed in 2022'. Was it individual bonds/gilts that crashed or bond FUNDS? Surely if a bond was bought and held to maturity there would be no crash in that bond?
Both crashed. Even with individual bonds held to maturity you lose out on higher coupon payments. Though many don't realize it, this is just as real as a decline in the bond price.
He is probably referring to the U.K. Look up the infamous "Liz Truss Mini Budget". Suddenly bonds paying 0.25% didn't look very attractive.
Could you please do a video solely on money market fund. I am more risk averse person. Currently investing a pound in money market for every other pound I invest in equities. Hope it holds up during crash or recession.
Hi @asfdghism I have a playlist dedicated to bonds and money market funds ruclips.net/p/PLlqeAQqQK7TfsDjD20MjQ50-YjDuKGiM7
I've also made a video for the T212 channel here ruclips.net/video/x6u_VCvPmxU/видео.html
I look at them once an hour. Just never sell.
I retired two years ago and have a healthy DB pension. I've been investing in ISA stocks and shares since 2012 and moved to 100% global equities 5 years ago. All the advice seems to say that I should no longer have 100% equities and use bonds, but as you say, the returns are less. I will be receiving an inheritance soon and intend to drip feed this into 100% equity ISA's each year until it's used up. Friends have told me I should be more risk averse. Are they right?
P.S. I am invested in one your previously recommended Vanguard global funds and am very happy I did.
Look for strategy which doesn’t involve selling stocks on way down and take 1-3 years to recover. Live off bonds while stocks recover.
Drip feeding (£ Cost averaging) is an excellent idea. As for whether you should be more risk adverse that depends on circumstances. If a 25% drop in your portfolio means difference between affording the heating or not then maybe you should be risk averse. If it is the difference between three and four holidays a year then maybe not.
Can someone help me please on correlation?
Out of these stocks:
Microsoft, Google Alphabet, Amazon, and Tesla, which ones would you say are correlated?
All of them
all
👌
Teddy's investments are all the bones he's buried somewhere, he's not sniffing for nothing, Ramin, he's checking his investments, that's his way of "looking at his portfolio"
🐶🍖
Do you still have QYLP in your fun portfolio. What do you think of it so far. It seems interesting. I don't think i've heard a good word about it. I have a position such that it buys itself another share every month through a re invested dividend.
Remove the Mag6 and you'll see that the market is beginning to nosediving, not rollercoasting.
For Teddy, sticks are actually a risky investment due to potential damage to his soft palate. Recent research suggests a rubber based product has a lower jaw down risk.
What about those guys that tell me that a 10 year flat stock market could easily come again? They call me crazy with my 100% VWRL.
I’m 50% VWRL but I’m now thinking of buying some gold when I make my next investment
@@carlyndolphin why? Statistics say it is an investment for 400 years.
@@Ferdinand208 I think diversification is key. 50% VWRL or VWRP, 2% Bitcoin, 8% gold and 40% property
@@carlyndolphin I don't think that is enough information. How are you going to re balance that? How are you buying that gold? Are you storing it? What does that cost? Do you have a bitcoin wallet or do you use a service or ETF? What does that cost? If you re balance bitcoin what are your transaction costs? How do you have the property? Is it your house? Do you have rentals? How do you manage that? Do you have REITS? Via ETF? Or something else? How much does that all costs in maintenance and taxes?
That single sentence is just not enough information. And to me it seems adding gold, bitcoin and property increases risk for most people.
@@Ferdinand208 This is my current portfolio set up. I don’t have any plans to rebalance. I use Coinbase and Revolut for my Bitcoin. I own 9 properties, 3 apartments, my main residence plus 5 commercial shops. I own zero REIT, apart from a small percentage held in my VWRP ETF. Some of my VWRP is held in ISA, SIPP and general account. Gold is held in ETF.
Plenty of reasons to look at your portfolio more than once a month
I always enjoy watching your videos, but I have noticed that amongst the ‘low fee index fund’ investing community most videos contain exactly the same content. I wonder whether that makes the job of making videos more difficult
1) Use time-weight return, not daily; 2) Use CAEY & treat as inflation bond (or div yield if square).
Too much reliance on averages and STDEV here.
Love your videos but your mic needs to be closer
I keep hearing that equity is the best place to be in a currency crash, but I am not so sure. If we have a currency crisis, then the stock market will drop massively.
Sound advice from a man in a linen shirt.
Buy loads of different ETF's , sell a portion of an ETF after XD when back in profit and pile more into another that is going XD shortly. Rinse and repeat...
Good grief
Your Broker and HMRC must love you.
Do this inside an ISA and it's even more effective. Especially if there are low/no trading fees.
@@trickyrat483 £5.95 dealing charges, no stamp duty in most cases, HMRC get naff all. All in mySIPP and ISA...
@@RobCLynch Just flogged a shed load of VHYL VWRL MYI FTWG etc etc as well as trading stocks. Be flogging wisdom tree next ETF's went fd yesterday.. I'll be flogging wisdom tree ETF's next, just gone xd yesterday...
23 trades up to now in July, making bits make bigger bits IMO....
Great video
Glad you enjoyed it @ivivivir