Managed Funds What will you do with your MFs in the coming bear market?

I think it's widely recognised that the markets are cyclic, so it's not a matter of if the market turns bear, but when. What will you do with your managed funds when the market turns bear? Will you sell your growth funds and buy some short funds? Are the world markets independent in this sense (i.e. could you keep China growth funds, but have to sell Aussie growth funds)? Any opinions and information are welcomed! Anthony

 

I'm thinking of being boring, and dollar cost averaging into funds with a savings plan for the next year or so.

Rather than use funds as the main saving vehicle though I'm thinking of using INGdirect to save up the next house deposit for a guaranteed 6.45% and no risk.

If a recession is heading our way, is now NOT a time to fix interest rates? Do interest rates start coming down in a recession?

 

I don't have any IP's - so no shortfalls there to cover. My LVR for my margin loan is 33% so I need a massive drop before I'll hit a margin call.

My intention for the future is to keep making monthly contributions and keeping the LVR ~33%. I'm in for the long term (at least 5 years) so the cheaper I can buy now the better

 

Who says a bear market is on the way?
The next 20 weeks could be a great time to be in the market - if we can get through this week and the raft of figures due for the US.
But right now futures for the dow are at 75 points up - if we can break through 13400 this week then we are on our way.

I am looking at taking profits for the managed funds in April if that happens....however, I think that property in Sydney is about to have its time in the sun again soon , and that where my money is - and will further be....

 

Perky,

I see the next level at 13 700....

 

Yep,

ASX up strongly today. I just rang my margin lender and they're waiting for my Navra funds to clear before they buy into my new funds. So unfortunately, right at this moment, I'm on the sidelines. It always seems to happen that I time my sell/buy just a tad too late so that I miss the upswing because it takes too bloody long to transact changes in managed funds. They reckon I should be back in today or tomorrow though so I'm happy with that.

I see only upside for the ASX and particularly for commodities and China. I too, like Perky, reckon sydney residential IP is not too far from having its day in the sun so I'm progressing at full speed my Mona Vale development. Exciting times ahead for Whyte Inc.!

Cheers,
Michael.

 

I will be adding more money into them

 

Hmmm... Why ?

 

Because I am not scared if the market goes down.

 

I was looking at a place to plonk a crap load of money. MQ private wealth had the best return of 7.33% for 3 months term deposit. It was higher for longer terms, but 3 month was all I remembered. Check it out.

Oh, they also had another term deposit that paid 7.5% up to 10% but I did not understand what they were doing.

I found this by googling "best term deposit" LOL

 

Your post/answer reminds me of a famous story about Nick Leeson who was as brave as you are.
He thought he could average a loss and he managed to destroy a bank.
Imagine what such a strategy will do to you.

Generally, prices spend as much time going up as they are going down or sideways...
Statistically the prices in all markets, are drifting sideways as much as 60%-80% of their time in consolidation patterns.
To some extent active investors/traders may not be concerned with time, as they may be able (some of them) to profit from a period of either price decline or consolidation.
But for passive investors this situation would be extremely frustrating.

One day we’ll get a bear market, what means that prices may move sideways in a narrow/tight band for a period of years.
I wonder how you’ll cope with bear market using your strategy.

In my opinion averaging down is a recipe for disaster.

 

LOL, big difference between Nick Leeson and me. I'm averaging with managed funds he was averaging futures.

Mate, pick any 30 year period. Markets always go up. It's the nature of the beast. When they go down, they usually stop going down after 3 years. I have a 30 year outlook.

When ever the markets make huge drops down, I see that as a buying opportunity for my managed funds.

Learn more about probabilities, leveraging and diversifying. All of these things make up the difference between what I am doing and what Nick did.

Question. Would you average down if you owned Berkshire Hathaway shares? I would

I might add, I average down when investing but not trading.

So you may have your trading message mixed up with my investing message.

 

There in not much difference between trading and investing, also I do not see any difference between Nick's strategy and yours (time frame may be diffrent).
I think it was B. Graham who said: In the long run we are all dead.

Have fun.......

 

There is a huge difference between trading and investing.

But I'm not going to argue with you or try you to convince you to change your strategies.

Good Luck
The Stig

 

The only difference is time span...Stategies are the same.
Again....Have fun

 

I don't know anyone that invests with Iron Condors, Broken Wing Butterflies, Calendars etc.

Collars yes.

I'm having all the fun in the world
Thanks
The Stig

 

I'm surprised nobody has suggested they would move their money to short funds...

 

IMHO short funds would be classified as an income fund. My goals are growth orientated. As said above I'd view a downturn as a chance to buy some good long term assets at a reduced rate.

 

That's timimg the market in my opinion. Very hard to do.

My question would be, when is the right time to enter the short fund and when is the right time to exit the short fund.