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Old 12.07.2018, 18:34
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Re: Are you happy to lose 50%-80% of your wealth?

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I don't think it's crying over spilt milk, tbh. Everyone I know that had a decent amount of cash and assets got whacked with the shock result of the Brexit vote. One friend had been saving to put a down payment on a house. 20K basically gone in a flash. Okay, it's over now and things have stabilized, but it must still sting to know your hard-earned assets carefully socked away for <insert goal here> simply vanished.
I dom't understand why the 20k vanished in a flash, if it was in cash it's still 20k, in the stock market or foreign currency it's gone up to over 25k plus. Win Win as house prices in the UK are also falling.
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Old 12.07.2018, 18:35
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Re: Are you happy to lose 50%-80% of your wealth?

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I don't think it's crying over spilt milk, tbh. Everyone I know that had a decent amount of cash and assets got whacked with the shock result of the Brexit vote. One friend had been saving to put a down payment on a house. 20K basically gone in a flash. Okay, it's over now and things have stabilized, but it must still sting to know your hard-earned assets carefully socked away for <insert goal here> simply vanished.
I guess if you're buying a house in the UK then the FX doesn't make a difference. Otherwise it pays to avoid the FX risk and convert when you know you need it for <insert non-GBP purpose>.
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Old 12.07.2018, 18:39
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Re: Are you happy to lose 50%-80% of your wealth?

Melon- perhaps a kennel and cattery too- with one qualified staff.
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Old 12.07.2018, 18:41
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Re: Are you happy to lose 50%-80% of your wealth?

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Melon- perhaps a kennel and cattery too- with one qualified staff.
Your neighbours will love you
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Old 12.07.2018, 18:44
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Re: Are you happy to lose 50%-80% of your wealth?

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I dom't understand why the 20k vanished in a flash, if it was in cash it's still 20k, in the stock market or foreign currency it's gone up to over 25k plus. Win Win as house prices in the UK are also falling.
Sorry, should have been clearer. The cash was held in GBP and the week it was due to be transferred for payment on the house in Switzerland, the Brexit vote happened. GBP tanked in comparison to CHF - the currency of the property purchase - so essentially they "lost" 20K in currency conversion. Simply bad luck with the timing. Had they transferred before the vote the exchange rate would have been more favorable.
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Old 12.07.2018, 18:46
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Re: Are you happy to lose 50%-80% of your wealth?

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Sorry, should have been clearer. The cash was held in GBP and the week it was due to be transferred for payment on the house in Switzerland, the Brexit vote happened. GBP tanked in comparison to CHF - the currency of the property purchase - so essentially they "lost" 20K in currency conversion. Simply bad luck with the timing. Had they transferred before the vote the exchange rate would have been more favorable.
Indeed. I converted my GBPs ahead of the vote when everyone was convinced it would be a vote to 'remain'...
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Old 12.07.2018, 18:48
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Re: Are you happy to lose 50%-80% of your wealth?

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Sorry, should have been clearer. The cash was held in GBP and the week it was due to be transferred for payment on the house in Switzerland, the Brexit vote happened. GBP tanked in comparison to CHF - the currency of the property purchase - so essentially they "lost" 20K in currency conversion. Simply bad luck with the timing. Had they transferred before the vote the exchange rate would have been more favorable.
Once you decide to make a deal with foreign currency exposure you need to hedge that currency by either buying the foreign currency or taking out a mortgage in the currency of the asset. Leaving the roulette wheel spinning is foolish.
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  #28  
Old 12.07.2018, 18:59
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Re: Are you happy to lose 50%-80% of your wealth?

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Once you decide to make a deal with foreign currency exposure you need to hedge that currency by either buying the foreign currency or taking out a mortgage in the currency of the asset. Leaving the roulette wheel spinning is foolish.
Based on the media reports each day in the build-up, I think so few people thought the vote would go the way it did that they didn't realize they were playing roulette. In hindsight one can say gosh, I should have done what Phil did!!

Back to the original point, I think it very much depends on how old you are and where you're at in life. A family friend lost more than a million in the dotcom bust, but built it back up. Then 2008 happened and he took another hit, but not as bad. Again, it has built back up nicely. Now the friend is 80-something and has decided maybe a smaller percentage of stocks will be just fine. He took out a bunch of cash and bought properties in his children and grandchildren's names, which has turned out very well for everyone.
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Old 12.07.2018, 19:04
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Re: Are you happy to lose 50%-80% of your wealth?

Its unlikely to crash to be honest, and as some people say just diversify, put some things here other there and so...

I wouldn't suggest bonds, since they dont give almost no profit at all and are no exempt of being - somehow - affected... nothing is bulletproof

Buy stocks, grow enough to buy a house/flat somewhere, rent it, keep buying stocks, repeat...
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Old 12.07.2018, 19:04
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Re: Are you happy to lose 50%-80% of your wealth?

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I don't think it's crying over spilt milk, tbh. Everyone I know that had a decent amount of cash and assets got whacked with the shock result of the Brexit vote. One friend had been saving to put a down payment on a house. 20K basically gone in a flash. Okay, it's over now and things have stabilized, but it must still sting to know your hard-earned assets carefully socked away for <insert goal here> simply vanished.
They broke a golden rule of investing -- never risk savings in the hope of short-term gains where you need to withdraw the money relatively soon for a particular purpose e.g. a wedding, university, house deposit, etc. Some recommend a 10-year minimum horizon though that's being rather cautious. I reckon 5 or 6 is likely to offer reasonable protection for your capital. There are low risk investment products that will offer short-term protection but obviously, low risk means low growth.

Any idea how they lost 20K overnight? It sounds as though your friend might have broken another rule, and not hedged / diversified enough.

*Edited -- ignore last line as you've answered that now.
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Old 12.07.2018, 19:06
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Re: Are you happy to lose 50%-80% of your wealth?

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Based on the media reports each day in the build-up, I think so few people thought the vote would go the way it did that they didn't realize they were playing roulette. In hindsight one can say gosh, I should have done what Phil did!!

Back to the original point, I think it very much depends on how old you are and where you're at in life. A family friend lost more than a million in the dotcom bust, but built it back up. Then 2008 happened and he took another hit, but not as bad. Again, it has built back up nicely. Now the friend is 80-something and has decided maybe a smaller percentage of stocks will be just fine. He took out a bunch of cash and bought properties in his children and grandchildren's names, which has turned out very well for everyone.
some people say it's easier to make a million than keep a million...
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  #32  
Old 12.07.2018, 19:07
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Re: Are you happy to lose 50%-80% of your wealth?

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...Any idea how they lost 20K overnight? It sounds as though your friend might have broken another rule, and not hedged / diversified enough.
See above. I didn't explain it at all the first time so it didn't make sense.
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  #33  
Old 12.07.2018, 19:14
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Re: Are you happy to lose 50%-80% of your wealth?

Most retarded thread title and question... ever?
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Old 12.07.2018, 19:20
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Re: Are you happy to lose 50%-80% of your wealth?

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Most retarded thread title and question... ever?
No, not at all, most people who trade on margin loose 100% within 7 years. Stock market investment is for the long term, even at 56 I can take a 30 year view so crashes are irrelevant even 1987 just looks like a blip.
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Old 12.07.2018, 19:43
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Re: Are you happy to lose 50%-80% of your wealth?

Statistically speaking, it takes about 7 to 10 years to get back to the point where you were before the -50%. Assuming that you were not into junk products ... That's why age is very related to investment strategy ...

And to answer the question, I think I'd be sad to see 50%-80% gone ...
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Old 12.07.2018, 19:52
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Re: Are you happy to lose 50%-80% of your wealth?

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Your neighbours will love you
What neighbours? None on that side of the house for miles, ooops kilometres. lol.
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Old 12.07.2018, 21:58
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Re: Are you happy to lose 50%-80% of your wealth?

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No, not at all, most people who trade on margin loose 100% within 7 years. Stock market investment is for the long term, even at 56 I can take a 30 year view so crashes are irrelevant even 1987 just looks like a blip.
I am talking purely about the clickbait title. Whether they accept it or not, no-one is "happy" to lose over half of their wealth.
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Old 12.07.2018, 23:36
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Re: Are you happy to lose 50%-80% of your wealth?

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So as many of you are retired or nearing retirement age, how do you manage the risk that 50%+ of your stock market wealth could be erased and stay low for potentially two decades or more?
Pretty easy
1. not having 100% of your wealth tied up in stock market while nearing retirement
2. geographical diversification
3. gold
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Old 12.07.2018, 23:45
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Re: Are you happy to lose 50%-80% of your wealth?

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Though perhaps this was in an era when bonds paid substantially higher yields and tended to be inversely correlated to the stock market.

Today bonds, have low yields (and could be argued to be even more over-valued than stocks) and have also moved in line with stocks rather than against them.
I'd rather have 0% yield in the current zero-inflation environment than 4% interest with 4% inflation. The latter is a losing situation for the creditor because he pays income tax on the interest so he loses purchase power.
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Old 13.07.2018, 00:03
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Re: Are you happy to lose 50%-80% of your wealth?

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Sorry, should have been clearer. The cash was held in GBP and the week it was due to be transferred for payment on the house in Switzerland, the Brexit vote happened. GBP tanked in comparison to CHF - the currency of the property purchase - so essentially they "lost" 20K in currency conversion. Simply bad luck with the timing. Had they transferred before the vote the exchange rate would have been more favorable.
When such a major political thing is happening in a country, it would be obvious to me to change what I have in it's currency before. Sure you can gamble .... but then live with the result.
So folks, warn me if the Australians plan some big change

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Pretty easy
1. not having 100% of your wealth tied up in stock market while nearing retirement
2. geographical diversification
3. gold
I don't see gold as a good investment now. I thought about it but decided I'm too late. In my opinion it can only drop (within my lifetime).
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