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Stock Market / Pensions / Investments - is the bubble going to burst
- Thread starter Mr Bump
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Ummm where is my crystal ball.
17% is fairly modest but, if the bubble (whatever that is) bursts then that will create a good buying opportunity and if you are in it for the long term then it won’t make a great deal of difference.
“it’s not about timing the market, but about time in the market,”
17% is fairly modest but, if the bubble (whatever that is) bursts then that will create a good buying opportunity and if you are in it for the long term then it won’t make a great deal of difference.
“it’s not about timing the market, but about time in the market,”
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History shows that, whenever a product is overpriced, there will be a more or less violent adjustment to the price.
The trick is to get out ahead of that adjustment.
The trick is to get out ahead of that adjustment.
lindsay
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You need to see what your Vanguard OEIC is invested in - which companies. There's a lot of hype about AI burt also scaremongering about the AI Tech Bubble. Nvidia is held by most big OEICs and Unit Trusts, along with Alphabet, Meta, and some other big American tech stocks. These are overpriced and ripe for correction. Some big Defence sector stocks have risen really well (eg Rolls Royce) and are considered by some overpriced but by others are still having further potential.
So, look at what the fund is invested in and weigh it up yourself, fund managers are not always right. Has there been a recent changer of fund manager? That can be good or bad. What is the risk factor of the fund? All things to consider.
I'm slowly moving some of my SIPP investments from shares to good interest rate gilts, as HMG has been regularly selling new bonds at 5% + coupon, so nice and safe but good for income (at least as good as an annuity), because I hope to retire before long.
So, look at what the fund is invested in and weigh it up yourself, fund managers are not always right. Has there been a recent changer of fund manager? That can be good or bad. What is the risk factor of the fund? All things to consider.
I'm slowly moving some of my SIPP investments from shares to good interest rate gilts, as HMG has been regularly selling new bonds at 5% + coupon, so nice and safe but good for income (at least as good as an annuity), because I hope to retire before long.
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Mine is mostly in global trackers but that still means a lot in seven US tech stocks given their market capitalization. Will there be a significant correction? Who knows - AI has a lot of potential not related to LLMs, chatbots and its use to sumarise google search results, which is all most of us typically see.
I take talk of bubbles with a truckload of salt. Bitcoin was declared to be a bubble in 2014 when it as $1,000 and likened to South Sea bonds or tulip futures with a permanent collapse in value said to be imminent. The same "expert investors" made the same declarations in 2019 when it reached $10,000. It's now over $100,000.
I take talk of bubbles with a truckload of salt. Bitcoin was declared to be a bubble in 2014 when it as $1,000 and likened to South Sea bonds or tulip futures with a permanent collapse in value said to be imminent. The same "expert investors" made the same declarations in 2019 when it reached $10,000. It's now over $100,000.
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Mr Bump
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To be fair most of my Vanguard Pension Pot is just in very spread-out accumulation folios , they are completely managed. I just watch them go up steadily at the moment
I have also looked at Gilts, thought about using them to store my drawdown in but so far that pot also is outperforming.
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Diversity is key in my experience when it comes to investing:
As Lindsay says, drill down the holdings of funds to see what they are invested in to make sure you aren't unwittingly too heavy in any particular company(s) or sectors.
- Multiple regions (Europe, Americas, Asia etc)
- Varying Sectors (Tech, Defence, Health etc)
- Range of Investment Types (shares, funds, ETF's)
As Lindsay says, drill down the holdings of funds to see what they are invested in to make sure you aren't unwittingly too heavy in any particular company(s) or sectors.
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My 2 pots are in fairly diverse funds and have been doing surprisingly well lately.
Just hoping they carry on for another year or two.
Some days they make more than my 3 day a week minimum wage part time job gives me a month!
Occasionally they do drop a bit, but generally up
Just hoping they carry on for another year or two.
Some days they make more than my 3 day a week minimum wage part time job gives me a month!
Occasionally they do drop a bit, but generally up
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Mr Bump
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Vanguard did say recently that a lot of there managed funds have crept away from USA markets to include more Europe and Asian as there are a lot less volatile
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Depends on how your Vanguard product is profiled, if it is dependent on tech stocks I think it could be vulnerable.
But, like stocks that were riding hight about 3-4 years ago like BlackRock UK smaller companies and Scottish Mortgage, Vanguard's portolio has gone through a bit of a rough patch (as has Fundsmith) but not to the level of Neil Woodford and Inveso and is probably recovering, so I think any 'correction' won't be so bad..
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Scottish Mortgage was brutal. If memory serves it was primarily due to reducing their Tesla stake, which I think was understandable at the time. They are recovering quite nicely though.
As Vanguard offer a whole range of funds catering specifically for different regions and sectors, it should be easy enough for anyone to stay with them whilst also reducing exposure to the US or tech markets. I did a cursory scan and it appears their emerging Asian markets are doing very well this year and rather surprisingly some of their UK funds. I'm cautious as to how exposed I want to be to the Asian markets at the moment with the geopolitical tensions risk whilst Trump is in office.
lindsay
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Emerging Asia and AsiaPac in general sghould be quite good as there is growth there, to some extent prompted by Trumps tariff war with China and Vietnam, encouraging more activity within Asia rather than mainly exporting out of Asia. Plus China's desperate need to boost consumer spending domestically.
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Mr Bump
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I think that is why Trump is all over Asia at the moments as he sees that is where the USA could lose serious ground if they get there act together and trade between each other, they could cut out the USA quite a bit. Tariffs are killing Americans also. I am getting my US friends to send there chinese parts orders to me in the UK then sending them to the US to save them a lot of cash.
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Reducing some holdings in the UK until I see how post-budget goes and also reducing some US holdings and sending more love to the following regions:
China/Greater China
Asia Pacific Including Japan
Europe Excluding UK
I still feel a smidge too heavy in US holdings and in particular tech, mainly because they've been performing so well. I've got a min. of 10 years with this particular portfolio so can probably weather whatever comes. Robotics appear to be doing quite well, might try and shift a little across into this sector.
China/Greater China
Asia Pacific Including Japan
Europe Excluding UK
I still feel a smidge too heavy in US holdings and in particular tech, mainly because they've been performing so well. I've got a min. of 10 years with this particular portfolio so can probably weather whatever comes. Robotics appear to be doing quite well, might try and shift a little across into this sector.
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Markets are going to be interesting over the next few weeks, lots going on and possibly some panic with the whole Greenland thing. Might see some pullbacks, possibly some retracements. Been watching Japan recently.
"May the odds be ever in your favour"
"May the odds be ever in your favour"
lindsay
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I agree, I'm watching my SIPP and ISA very closely. I'm hoping to ride it out having moved most into defence, natural resources and banks a while ago with some UK gilts for security. Geographic exposure is mainly UK and Asia (exc Japan). I have been taking some profits though to reduce exposure to sudden shocks (Rolls Royce is a 10-bagger for me so I've sold 70% of my holding and diversified).
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Sounds sensible. I've savaged my ISA after weighing up their potential growth to the end of this month compared to the potential crash, especially if Trump throws his toys out of his pram at Davos. If he does, then at least I've protected myself and keeps my plans for next month intact. If things resolve themselves, I'll have lost a small profit, but at least Greenland etc will be safer, so I'll take either direction as a win.
Fortunately, my SIPP still has a fair way to go, so happy to ride things out.
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I've got some years to go so I'm not panicing. I've been moving some of the money from heavily US weighted (due to the big tech companies) global trackers into other global funds that don't include those particular companies so it's not such a rollercoaster on every AI announcement, but other than that I'm just letting it carry on.
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My pension took a very small dip, despite being quite diverse, both geographically and across sectors. Trump's antics certainly appear to have been widespread. Fortunately, it's already starting to climb again this afternoon and almost back to what it was yesterday. Despite the temptation of the fast growth, I'd already reduced my tech exposure a while back, yet they are doing the heavy lifting at the moment. I don't like that.
I've now dumped all of my Japanese stock. They might end up fine, but there's too many red flags at the moment for me. I'm now looking closer at the South American markets.
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I've posted a reply to Mr Bump re finaces in the Trump thread. I've just seen this thread and think it should really be here.
I'm keeping a close eye [on US Treasury bonds] because when the bond markets take fright there's trouble. The US debt is running at $38 trillion.An historically high level.
About a third of traded American government/treasury bonds, is held by foreigners, led by Japan...$1.13 trillion .Huge investors, including governments, might start selling them.The UK has recently surpassed China ($750bn)to become second to Japan by holding $807bn worth. London holds Treasury bonds on behalf of other world-wide investors, though.
In 2024, the U.S. government paid about $880 billion on net interest costs, the largest amount in history and it's now estimated to be a $1 trillion a year.ie..$83billion a month.
Look what's just happened in Denmark.
MSN
"Danish pension operator AkademikerPension said it is exiting U.S. Treasurys over finance concerns tied to America's budget shortfall.The move comes amid increasing tensions with the U.S. over Greenland as President Donald Trump pushes for control of the island.AkademikerPension said it plans to have closed its position of around $100 million in U.S. Treasurys by the end of the month."
As a result of Trump's tariff threats re Greenalnd, investors were selling US Treasury bonds yesterday with the 10-year yield at its highest point since August and, as a result, the U.S dollar slid whilst gold and silver surged to record highs. The CEO of UBS, the world's largest private bank, thinks the market is making a “dangerous bet.” At Davos, he said, in an interview, that ..“diversifying away from America is impossible. Things can change rapidly and the U.S is the strongest economy in the world, the one who has the highest level of innovation right now.”
Europe owns twice as many bonds as the rest of the world put together. Today,at Davos, Trump ruled out military intervention to take Greenland. That was today, though..lol. Re the threatened tariffs, we have to rely on TACO. I've de-risked by 50%. A bird in the hand and all that. Still have shares in copper and gold mining, though.
I'm keeping a close eye [on US Treasury bonds] because when the bond markets take fright there's trouble. The US debt is running at $38 trillion.An historically high level.
About a third of traded American government/treasury bonds, is held by foreigners, led by Japan...$1.13 trillion .Huge investors, including governments, might start selling them.The UK has recently surpassed China ($750bn)to become second to Japan by holding $807bn worth. London holds Treasury bonds on behalf of other world-wide investors, though.
In 2024, the U.S. government paid about $880 billion on net interest costs, the largest amount in history and it's now estimated to be a $1 trillion a year.ie..$83billion a month.
Look what's just happened in Denmark.
MSN
"Danish pension operator AkademikerPension said it is exiting U.S. Treasurys over finance concerns tied to America's budget shortfall.The move comes amid increasing tensions with the U.S. over Greenland as President Donald Trump pushes for control of the island.AkademikerPension said it plans to have closed its position of around $100 million in U.S. Treasurys by the end of the month."
As a result of Trump's tariff threats re Greenalnd, investors were selling US Treasury bonds yesterday with the 10-year yield at its highest point since August and, as a result, the U.S dollar slid whilst gold and silver surged to record highs. The CEO of UBS, the world's largest private bank, thinks the market is making a “dangerous bet.” At Davos, he said, in an interview, that ..“diversifying away from America is impossible. Things can change rapidly and the U.S is the strongest economy in the world, the one who has the highest level of innovation right now.”
Europe owns twice as many bonds as the rest of the world put together. Today,at Davos, Trump ruled out military intervention to take Greenland. That was today, though..lol. Re the threatened tariffs, we have to rely on TACO. I've de-risked by 50%. A bird in the hand and all that. Still have shares in copper and gold mining, though.
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Mr Bump
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lindsay
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I'm not shocked that the % on welfare has gone up - I think this reflects the post-Covid world and the numbers of young people choosing not to work (at least in conventional employment).
What does shock me is the % on national debt interest, up from 4 to 11. I know interest rates increased, but that also reflects the leap in national debt under the Tories perhaps largely resulting from Covid and the furlough etc schemes.
What does shock me is the % on national debt interest, up from 4 to 11. I know interest rates increased, but that also reflects the leap in national debt under the Tories perhaps largely resulting from Covid and the furlough etc schemes.
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Mr Bump
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yep and that is why i do agree that Labour did take on a massive problem from the tories and do feel a bit sorry for them.