Why Are You Staying Out Of Stocks?

[The Masked Tulip]

I have noticed in the past week or two numerous posts, in various threads, from numerous HPCers who, having speculated in the stock markets with their house buying funds/STR funds (Same thing) that they are now saying they are getting out of shares, getting into cash and avoiding shares like the plague.

What is the main reason for this? Is it an upturn in the doom-sayers' blogs and videos, is it gut feeling, is it because you sense another down-turn in shares is coming, is it because you have read good economic data that another down-turn in shares is coming, do you think the 'bull-run' has to end eventually and that time might be near?

What exactly?

Or are you all cashing in to go buy a house?

[porca misèria]

I have noticed in the past week or two numerous posts, in various threads, from numerous HPCers who, having speculated in the stock markets with their house buying funds/STR funds (Same thing) that they are now saying they are getting out of shares, getting into cash and avoiding shares like the plague.

Examples?

We have quite a mix here: permabears and gold bugs, investors, traders, speculators, and (no doubt) none-of-the-aboves.

Who are you accusing of changing a long-held stance? Other than those who announce they've bought (and generally cite good reasons along the lines of "it's what I want, at a price I can afford".

[The Masked Tulip]

Examples?

We have quite a mix here: permabears and gold bugs, investors, traders, speculators, and (no doubt) none-of-the-aboves.

Who are you accusing of changing a long-held stance? Other than those who announce they've bought (and generally cite good reasons along the lines of "it's what I want, at a price I can afford".

I am now accusing anyone of anything you pr*ck. I am merely asking a question. Get a life.

[Realistbear]

I have noticed in the past week or two numerous posts, in various threads, from numerous HPCers who, having speculated in the stock markets with their house buying funds/STR funds (Same thing) that they are now saying they are getting out of shares, getting into cash and avoiding shares like the plague.

What is the main reason for this? Is it an upturn in the doom-sayers' blogs and videos, is it gut feeling, is it because you sense another down-turn in shares is coming, is it because you have read good economic data that another down-turn in shares is coming, do you think the 'bull-run' has to end eventually and that time might be near?

What exactly?

Or are you all cashing in to go buy a house?

I got out of nearly all my stocks quite awhile ago (4th May, 2010 to be exact) --when Honeywell hit $47.61. I am now about 75% cash, mostly US$ earning next to nothing by way of interest but doing better on the appreciation side. About 20% in PIMCO's total bond fund which has been doing okay:

YTD Performance as of 06/04/2010 4.41%

1 Year* 11.86%

Why did I sell most of my stocks? First signs of trouble in the form of a wider acceptance that the 2nd leg was going to happen and that sovereign debt was going to take down quite a few nations and their banks with them.

I would expect the Dow to drop to around 8000-8500 later this summer, maybe sooner. FTSE will test new 5 year lows also. Stocks are not the place to be in such a market as this. Far too many uncertainties and growing pessimism about the troubles being over despite the crap that has been uttered today from the G20 or whatever number it is this week.

I am waiting to buy a house and have set my eyes on a place that is about 400k in today's dream-world that will be about 300k when I would be willing to put in an offer. In other words, at least another 25% down from where we are today.

Edited June 5, 2010 by Realistbear

[blobloblob]

Not too long ago the FTSE was 1,000 points lower than it is now but I can't really see any good news anywhere in the world at the moment. I don't believe that economies anywhere in the world are better placed now than they were 12 or 18 months ago so I believe that there has to be a fall.

Having said that, I put my pension pot into a cash fund when the FTSE had got back up to 5,200 so my caution meant that I missed out on what would have been an extra 10% gain or so on its way up to 5,800 so what do I know? Anyway it's staying in cash until it drops another 1,000 points - or forever, whichever comes first.

[Pent Up]

I am now accusing anyone of anything you pr*ck. I am merely asking a question. Get a life.

oo er. That's a bit harsh. Or maybe I have read too much MSE lately and been softened by all the hugs...

Anyway. I think stock markets, Dow and ftse, have shown trend reversal patterns and this is confirmed by the bad fundementals from europe. I like to follow trends in the stock markets and it looks like the bull trend has well and truely finished (at least for now)

[libspero]

I am now accusing anyone of anything you pr*ck. I am merely asking a question. Get a life.

Bit harsh there MT.. don't think porca was having a dig

[fadeaway]

Why did I sell most of my stocks? First signs of trouble in the form of a wider acceptance that the 2nd leg was going to happen and that sovereign debt was going to take down quite a few nations and their banks with them.

I would expect the Dow to drop to around 8000-8500 later this summer, maybe sooner. FTSE will test new 5 year lows also. Stocks are not the place to be in such a market as this. Far too many uncertainties and growing pessimism about the troubles being over despite the crap that has been uttered today from the G20 or whatever number it is this week.

I agree.

Even through the smokescreen of 'good news' - every time something bad happens lately the markets take a beating. They have woken up to the fact that the shit is about to hit the fan, and every time the shit gets closer to the fan - markets drop. If we're so sure that shit IS about to his the fan, then markets aren't the place for us to be.

I believe there is one more bull run before the second leg down, so I'll be in the a short while longer. After that I'll be Gold/Dollars/Shorting everything.

[LJAR]

I am still in stocks nearly all of my savings are, and I intend to keep them that way for the next 30 or so years.

It is worrying, but then I just remember "to be greedy when others are fearful".

At the end of the day its only money.

[ftbinthewaiting]

I'm in stocks too. 100%.

I'm invested in a couple of miners that appear to me to be very undervalued, and where news due should lead to an increase in value over a 6-12 month timescale.

I'm generally bearish on the FTSE, but times like this do throw up the odd bargain in my view.

My pension is 100% cash, and has been since September 2009. Shame my company scheme has such a limited choice of investments.

[plummet expert]

I got out of nearly all my stocks quite awhile ago (4th May, 2010 to be exact) --when Honeywell hit $47.61. I am now about 75% cash, mostly US$ earning next to nothing by way of interest but doing better on the appreciation side. About 20% in PIMCO's total bond fund which has been doing okay:

YTD Performance as of 06/04/2010 4.41%

1 Year* 11.86%

Why did I sell most of my stocks? First signs of trouble in the form of a wider acceptance that the 2nd leg was going to happen and that sovereign debt was going to take down quite a few nations and their banks with them.

I would expect the Dow to drop to around 8000-8500 later this summer, maybe sooner. FTSE will test new 5 year lows also. Stocks are not the place to be in such a market as this. Far too many uncertainties and growing pessimism about the troubles being over despite the crap that has been uttered today from the G20 or whatever number it is this week.

I am waiting to buy a house and have set my eyes on a place that is about 400k in today's dream-world that will be about 300k when I would be willing to put in an offer. In other words, at least another 25% down from where we are today.

This is all quite right. Your £400k house could be £250k if there is a proper correction, because corrections which go the distance will overshoot.

And to answer, it's the volatility in markets reacting to rumours and even slightly poor news which are the sign. The thin trading in markets barely holding up the price, the unseemely rise in stock markets after no real recovery atall, the transfer of debt from banks to govts causing an immense insoluble sovereign debt crisis. It cannot be cured by yet more borrowing, which is the only 'medicine' being offered. Yet the amounts outstanding are so staggering they cannot be paid off and are in some cases beyond servicing. It's the fact that the money supply in the USA is contracting at a rate not seen since 1931-33. These are are just SOME of the list of matters which persuade me that we can expect a SECOND LEG DOWN which may be worse than the first and take longer to recover from.