How Serious is this Bear ?

[Beagle]

If the bear really bites, is cash ($NZ) the best place to wait it out? Last time around, $NZ took quite a hit against $US as flight to quality kicked in. $US then gold?

I wouldn't hold $US this time as the US has massive external debt now. Honestly its a pretty fluid situation and one needs to adapt their investment strategy as this unfolds.
For what its worth I am now 55% in $NZ cash, and most of the rest of my investments are in defensive stocks like GNE, MEL, ARG, OCA (yes this is defensive as its needs based late stage healthcare), ZEL (consumer staple) and some modest stakes in SML HGH, AIR.

I don't think the market has really cottoned on to the fact that OCA is pretty defensive.

[Biscuit]

I wouldn't hold $US this time as the US has massive external debt now. Honestly its a pretty fluid situation and one needs to adapt their investment strategy as this unfolds.
For what its worth I am now 55% in $NZ cash, and most of the rest of my investments are in defensive stocks like GNE, MEL, ARG, OCA (yes this is defensive as its needs based late stage healthcare), ZEL (consumer staple) and some modest stakes in SML HGH, AIR.

I don't think the market has really cottoned on to the fact that OCA is pretty defensive.

Interesting, thanks. I largely stopped buying shares a couple of years ago and have been selling down since then but am still roughly 50:50 shares and cash in terms of financial assets. Have never invested in gold but am seriously thinking about it this time as I think there is potential for the proverbial to really hit the fan this time. I will watch the exchange rates and switch to $US if the $NZ starts to wobble. I think the bigger problems are likely to be elsewhere than US initially and in uncertainty people will look for safety and where is that? Not Europe, not Britain

[winner69]

Interesting, thanks. I largely stopped buying shares a couple of years ago and have been selling down since then but am still roughly 50:50 shares and cash in terms of financial assets. Have never invested in gold but am seriously thinking about it this time as I think there is potential for the proverbial to really hit the fan this time. I will watch the exchange rates and switch to $US if the $NZ starts to wobble. I think the bigger problems are likely to be elsewhere than US initially and in uncertainty people will look for safety and where is that? Not Europe, not Britain

I bought gold during the gfc. Never sold it but it’s only worth much the same as it was then.

Hope they are still where I hid them. Better goand check eh

[Biscuit]

I bought gold during the gfc. Never sold it but it’s only worth much the same as it was then.

Hope they are still where I hid them. Better goand check eh

Where did you hide it? I won't tell! Gold price ramped up slowly during the GFC and then back down again - was still a good decision to buy, just not so good a decision to hold. Commodity funds are probably a better way to hold gold than buried in the back yard?

[Southern_Belle]

Don't rule out keeping your cash in British pounds as The British Banks still have a bank Guarantee scheme up to £80,000.

New Zealand bought one in briefly during GFC but did away with it. Would be nice to know that cash deposits were safe in turbulent times

[percy]

Yes and No Percy. Defensive high yielding shares like the utilities and some REIT's have already been strong outperformers in recent weeks and I expect that to continue (e.g I bought shed loads of ARG a few weeks ago for $1.07 and am already up over 10% plus a dividend) and many other defensive shares have been outperformers.

Unfortunately vehicle companies, retailers and financials have historically been very poor performers in a bear market so their ability to pay the dividends Craigs is forecasting will be in doubt.

You're absolutely right to highlight the risk to people's future returns on cash and short term deposits. Thanks for that. I might have a look at further boosting my investment in utilities in early 2019.

Most finance companies crashed as they had lent to property developers.The likes of Fisher and Paykel Finance and Smiths City Finance had no problems.Marac's property exposure meant they had to recapitalise [HGH].However the rest of Marac's finance book,mainly motor vehicles preformed well.I expect HGH'd balanced lending should see few problems,and their REL business is sound.

Turners appeared to have had only one bad year 2008,and then had a very profitanle year in 2009.Today being a vertically integrated business, means they have a much sounder business, that is stronger than most others in their sector.

[skid]

Cheaper than yesterday certainly, but cheaper than tomorrow? I don't believe that any person with any degree of certainty can answer that. What I can say is the stock market moves in cycles, there are periods of expensive shares when the market is full with euphoria and periods of cheaper shares when it is plagued with fear.

My strategy as outlined above is simple, I'll continue to buy the same sized parcels throughout. When we look back at the top of the next cycle I'll be able to say I bought a lot of 'cheaper' shares and likely have a nice average. Like i said before most posters here have decades of wealth accumulated and don't have the same amount of time should probably plan to preserve capital.

Fair enough...who knows.... you may get both(cheaper than yesterday and cheaper than tomorrow)

[skid]

[QUOTE=Biscuit;742113]Interesting, thanks. I largely stopped buying shares a couple of years ago and have been selling down since then but am still roughly 50:50 shares and cash in terms of financial assets. Have never invested in gold but am seriously thinking about it this time as I think there is potential for the proverbial to really hit the fan this time. I will watch the exchange rates and switch to $US if the $NZ starts to wobble. I think the bigger problems are likely to be elsewhere than US initially and in uncertainty people will look for safety and where is that? Not Europe, not Britain[/QUOTE

Ive got Gold ..but more for insurance purposes...............and Im just about to stash some actual physical cash away as well ...just in case of worst case scenario..(I did it for awhile in the meltdown).....things getting that bad are smaller odds .....but so was Trump.

[Biscuit]

Ive got Gold ..but more for insurance purposes...............and Im just about to stash some actual physical cash away as well ...just in case of worst case scenario..(I did it for awhile in the meltdown).....things getting that bad are smaller odds .....but so was Trump.

What form have you bought and hold gold?

[Baa_Baa]

Yeah, it looks serious, for the DOW anyway. It is now massively below punters favourite MA's. Plunged below it's Feb and Apr lows this week and disconcertingly took a shot at the looong term uptrend from 2009 (green line), but closed below that today! A close below such a long uptrend is definitely concerning. We have a Bear for sure.

Today's close was spookily right around the 50% Fibonacci re-trace (not really a Fib but still included in TA) from the time Trump got the presidency. Geepers, 50% loss of gains already, he'll be worrying that 50% of his good management has gone down the gurgler already. Interesting that a couple of obvious price supports also coincide with the 61.8% and the 78.6% Fib re-traces. Bugger that our NZX takes its cues from the DOW/SP500.

Time to blame the Fed again, but whoa, it's not their fault! The US economy is doing fine. Maybe Trump can fix what he's broken by removing the punitive tariffs on China (and others) and restoring some confidence in the market that he so coveted during the rise to previously uncharted heights.

It's been awhile since there was a Xmas Grinch instead of a Xmas rally. This sure is one of those times.

Attachment 10215

Oops, forgot to mention the double Death Cross, 50EMA down through both the 200MA and 200EMA. What a week!