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Old 12.06.2020, 08:57
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double bottom - How low

Hi fellow investors.

Looks like the double bottom of the stock market is coming. The million dollar question is of course: how low will it go this time? As low as in march? Even lower?

I for myself know I have my trading account stocked up with cash to buy my favourite funds (FS) and trusts (EWI, SMT and SSON>) at discount prices.

Just wondering what is your strategy. I plan to cost avg down, buying every 10% of drop compared to yesterday's prices.
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Old 12.06.2020, 10:25
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Re: double bottom - How low

My strategy is simple: if prices fall to attractive levels, I will buy. If not, I will use the cash to pay off debt.
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Old 12.06.2020, 10:54
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Re: double bottom - How low

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My strategy is simple: if prices fall to attractive levels, I will buy. If not, I will use the cash to pay off debt.
now why would you do that? Dept is cheap nowadays
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Old 12.06.2020, 11:03
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Re: double bottom - How low

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Hi fellow investors.

Looks like the double bottom of the stock market is coming. The million dollar question is of course: how low will it go this time? As low as in march? Even lower?

I for myself know I have my trading account stocked up with cash to buy my favourite funds (FS) and trusts (EWI, SMT and SSON>) at discount prices.

Just wondering what is your strategy. I plan to cost avg down, buying every 10% of drop compared to yesterday's prices.
Markets are strongly up this morning, I think it's wishful thinking on your part that there will be a double bottom.
US employment figures were amazing for May which was totally unexpected.

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now why would you do that? Dept is cheap nowadays
Debt is real, usually secured on an illiquid asset (property) where it's valuation is an opinion rather than a fact.
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Old 12.06.2020, 11:10
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Re: double bottom - How low

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now why would you do that? Dept is cheap nowadays
Because ultimately, I want to be debt free. What's the alternative for the cash? Hold it at negative rates? Hold it in negative bonds with capital risk? Invest in stocks at a bad price?
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Old 12.06.2020, 11:19
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Re: double bottom - How low

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now why would you do that? Dept is cheap nowadays
Being debt free is great for the state of mind, not everything has to be about optimising money.
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Old 12.06.2020, 11:21
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Re: double bottom - How low

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Being debt free is great for the state of mind, not everything has to be about optimising money.
I have been debt free for over 20 years, it's a good place to be, having paid mortgage rates of 17%.
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Old 12.06.2020, 12:01
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Re: double bottom - How low

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I have been debt free for over 20 years, it's a good place to be, having paid mortgage rates of 17%.
Luckily my mortgage rates are on much lower fixes. One comes up for renewal next year so if I don't pay it off, I will maybe fix it for 4 years and pay it down over that time. Rates are currently ~0.65%.
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Old 12.06.2020, 12:38
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Re: double bottom - How low

I guess it depends how your debt is structured, and on your personal goals.

With debt being tax-deductible, a totaly clean slate may not be the best place to be.

On the other hand, I do sometimes consider totally giving up on the hamster wheel of everyday life for maybe a couple of years and going some other place to do something totally different. Not having any debt to service may give you one less thing to worry about if you don't know where your next income is coming from.
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Old 12.06.2020, 12:45
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Re: double bottom - How low

I will just ride through the market fluctuations nowadays and alternatively trade the currencies. Before Thursday Nasdaq technology market had already exceeded magic number of 10,000 points and this is where I put my money in. Today’s session should be in more green region again
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Old 12.06.2020, 13:08
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Re: double bottom - How low

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Markets are strongly up this morning, I think it's wishful thinking on your part that there will be a double bottom.
US employment figures were amazing for May which was totally unexpected.
Yes, I guess it is/was

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I will just ride through the market fluctuations nowadays and alternatively trade the currencies. Before Thursday Nasdaq technology market had already exceeded magic number of 10,000 points and this is where I put my money in. Today’s session should be in more green region again
Yeah, I was expecting the yesterday's selloff on the US markets to continue in other markets today - I guess I was wrong...

It was just a mirage
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Old 12.06.2020, 16:11
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Re: double bottom - How low

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Yes, I guess it is/was



Yeah, I was expecting the yesterday's selloff on the US markets to continue in other markets today - I guess I was wrong...

It was just a mirage
Terry Smith always says he has no idea what the price will be tomorrow or next week or next year, he concentrates on buying good businesses instead
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Old 12.06.2020, 17:28
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Re: double bottom - How low

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I guess it depends how your debt is structured, and on your personal goals.

With debt being tax-deductible, a totaly clean slate may not be the best place to be.

On the other hand, I do sometimes consider totally giving up on the hamster wheel of everyday life for maybe a couple of years and going some other place to do something totally different. Not having any debt to service may give you one less thing to worry about if you don't know where your next income is coming from.
Can we please stop with the debt shield fallacy for individuals. Unless you have a marginal tax rate of over 100% paying a combination of interest and reduced tax is more expensive than paying tax.
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Old 12.06.2020, 17:33
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Re: double bottom - How low

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Yeah, I was expecting the yesterday's selloff on the US markets to continue in other markets today - I guess I was wrong...
There were massive gains earlier on in the week, and every rally overshoots. This is what just happened IMHO.
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Old 12.06.2020, 20:34
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Re: double bottom - How low

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Can we please stop with the debt shield fallacy for individuals. Unless you have a marginal tax rate of over 100% paying a combination of interest and reduced tax is more expensive than paying tax.
Presumably, it would work if interest is deductible and you make tax-free capital gains. Otherwise I agree: any additional interest you pay, is almost certainly less than the marginal tax rate you save.
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Old 12.06.2020, 20:39
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Re: double bottom - How low

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Terry Smith always says he has no idea what the price will be tomorrow or next week or next year, he concentrates on buying good businesses instead
Yup, I can see a case for prices to fall below the March lows and also a case for prices to melt-up even higher. Nobody knows what will happen, so I stay cautiously invested.

Last edited by Phil_MCR; 13.06.2020 at 12:54.
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Old 12.06.2020, 20:54
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Re: double bottom - How low

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I have been debt free for over 20 years, it's a good place to be, having paid mortgage rates of 17%.
Inflation in the UK went above 20%, close to 25% IIRC. With 17% debt interest you were paid to be in debt.
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Old 12.06.2020, 21:04
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Re: double bottom - How low

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Inflation in the UK went above 20%, close to 25% IIRC. With 17% debt interest you were paid to be in debt.
The assets (property) were falling fairly fast at the time, many people had their properties re- possessed & sold for substantially less than the debt.
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Old 12.06.2020, 21:15
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Re: double bottom - How low

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The assets (property) were falling fairly fast at the time, many people had their properties re- possessed & sold for substantially less than the debt.
And no wonder, with that kind of rates coupled with the high unemployment of the '80ies. Still, you effectively got paid to have debt if those 17% applied during the +20% inflation years as well.
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Old 12.06.2020, 21:23
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Re: double bottom - How low

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And no wonder, with that kind of rates coupled with the high unemployment of the '80ies. Still, you effectively got paid to have debt if those 17% applied during the +20% inflation years as well.
Not if the assets fell in value v inflation which is what happened, very easy to go bankrupt in such a scenario, many did.
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