Turmoil in Financial Markets: decision-making bias in financial trades

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silmcoach
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Re: Turmoil in Financial Markets: Ouch!

Post by silmcoach » Sat Oct 19, 2019 10:02 am

End of the week and my gain is down 33.75%. I definitely should have sold on the crest of the wave. The worry is, the fall may have further to go, given Trumps more erratic behaviour. His only concern now is to get re-elected. The more his actions generate publicity the better for him, but the Markets fear what's next.

Saturday 19th October 4 p.m.
The Brexit saga continues -- and so will uncertainty in the minds of investors. I'm not expecting a rally anytime soon.
silmcoach
Greatest wealth - happy heart, peace of mind :D

silmcoach
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Re: Turmoil in Financial Markets: When to sell?

Post by silmcoach » Tue Nov 05, 2019 3:14 am

Well there has been a bounce back, S&P 500 peaked, and all the markets are in positive territory. With the Fed cutting the interest rate, job creation higher than expected, and upbeat news from the US/China trade talks, investor sentiment turned positive, despite continuing forecasts of "inevitable" recession.

I still think its a case of there being nowhere else for investors to put their money, it's either equities or bonds. With uncertainty over the long term global economy investor confidence will inevitably wax and wain on good or bad news on any front. Just got to try and stay ahead of the curve.

I'm riding the current wave ready to bail out and take the profit, timings the thing though, it's all in the timing!
silmcoach
Greatest wealth - happy heart, peace of mind :D

silmcoach
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Re: Turmoil in Financial Markets: sold S&P 500 funds

Post by silmcoach » Fri Nov 08, 2019 10:02 am

Decided to sell my two S&P 500 trackers. They weren't tracking (keeping up with the index) particularly well, and given that I'd bought in at a relatively high point, thought it as well to sell whilst in small profit. No dividend imminent, so nothing lost and I can always buy back when they fall again.

I still believe it is in China's interest to manipulate the US markets. Announcing significant progress in the US-China trade talks first, only for the US to respond, denying or moderating the claim, dashes hopes of an early end to the trade war and raises fears for the global economy again. The more so will hurt Trump's chances of re-election and for a new administration to take a different stance on trade with China.
China had been pressing the US to remove tariffs on its goods as part of any deal.
A spokesman for its Commerce Ministry said the two sides had agreed to cancel the tariffs "in stages" as the agreement develops.
On Thursday, Reuters and Bloomberg reported that a US trade official had confirmed that some tariffs would be lifted, should a deal be reached.
But US negotiators did not publicly endorse the report and Reuters later reported that the plan faces "fierce" internal opposition.
Stock markets gained on the reports, seeing them as a sign that a deal is getting closer.


BBC Business News, 'Potential US-China trade deal could remove tariffs', https://www.bbc.co.uk/news/business-50340037, accessed 8/11/19
So, it was record highs yesterday for the US Indices, all based upon the positive expectations of a partial agreement on the lifting of tariffs. However, UK and Europe falling this morning already - how quickly positive sentiment wanes!

I was intending to bank some profits, but the upturn has not seen prices match the highs of a month ago. So will sit tight for the mo. I am 43% in cash, so I can buy in at the end of year fall. (I know I am being overconfident, perhaps arrogant in my prediction, but it will be at my expense, and anyway, I will have the cash available to buy in any dip.)

It will be interesting to see how the US indices perform later today. I wonder just how persistent the expectations of a positive outcome to trade negotiations will prove to be. Is it a case of wishful thinking?
silmcoach
Greatest wealth - happy heart, peace of mind :D

silmcoach
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Re: Turmoil in Financial Markets: part-sell winning funds

Post by silmcoach » Sat Nov 09, 2019 11:17 am

Well, going against Khaneman's theory, I have decided to sell part of my holding in three winning funds that I believe have peaked, given my prediction that stocks will fall towards year end. I am just holding on to a hundred pounds in each so they stay on the board.

It's a gamble, whether stocks will rise or fall on Monday, before the valuation points, is any ones guess. I'm expecting a slight easing down from the peak, I just hope there's not too much of a fall! But hey, that won't actually be a loss, only less profit. At least I will have banked some profit hopefully to buy back in December/January at a discount price. We shall see.

Again, just testing theory. This time, contrary to Kahneman's strategy of "sell losers, hold on to winners".
silmcoach
Greatest wealth - happy heart, peace of mind :D

silmcoach
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Re: Turmoil in Financial Markets: Oh dear

Post by silmcoach » Wed Nov 13, 2019 7:02 am

Monday 7 a.m. Decided to part sell another global fund in good profit, and a UK tracker showing a small profit (3.5%). But by the midday valuation point it had lost 1% on the day, only to rise back up by close. Eeh, it's a pesky business, deciding whether to buy or sell based upon a best guess for the next day fund price.

So the following day (Tuesday) stocks rose! Think the lesson learned is to not place orders over the weekend as less chance of following a gradual price trend. Monday opening, the computers kicked in, hence the sudden rise. It may not continue today though, Asia's down over night.

Although it takes a lot of effort following the markets, this is a change in strategy (selling winners at near peak in anticipation of an end of year dip), so patience is required to test it out.

Now 3pm, and all the markets are falling, dizzy or what.
silmcoach
Greatest wealth - happy heart, peace of mind :D

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