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The S&P500 50 day moving average crossed the 200 day average in July which historically signals a bullish rally in US stocks in the following period.
The bears and "US stock over valued" crowd sitting in gold and cash should take heed as we may be about to see a strong return to bull market to end the year.
I hope so, my funds are lined up ready!
https://www.bloomberg.com/news/articles/2020-07-10/s-p-500-flashes-sign-that-marked-end-of-every-modern-bear-market
"Investors should expect that at least one coronavirus vaccine will be developed by the end of the year, which could drive the S&P 500 up 11%, Goldman Sachs said in a note on Wednesday.
"We agree that there is now a good chance that at least one vaccine will be FDA-approved by the end of November and broadly distributed by the middle of 2021," the US banking giant said.
"This kind of timeline could see a substantial boost to GDP relative to a 'no-vaccine' case, particularly for the US, which is likely to lead the vaccine race and is likely to experience worse outcomes than in Europe without a vaccine."
Goldman Sachs said it thinks the S&P 500 could jump 11% from current levels should a vaccine become available by the end of the year."
Our funds are performing well year to date with the UK fund lagging behind in the recovery:
- Baillie Gifford American B fund is up 85%
- Polar Capital Global Technology is up 44%
- HSBC Islamic Global Equity Index is up 18%
- L&G Ethical Global Equity Index is still down -1.8%
- ASI UK Smaller Companies is still down -5%
The S&P500 reached new all time highs in August erasing all COVID crash losses, the FTSE still lags behind the February highs dragged down by the large caps but the 250 and Small Caps are steadily recovering.I expect the ASI UK Small Companies Fund to rebound very strongly next year after investors realises the Brexit impact will be a lot less than is being hyped up for that portfolio, we come out of lockdown fully and everyone returns to work. UK stocks are still out of favour globally but there is some real value in some areas and I expect some money to pour into those value holes next year.
I care nothing for trying to time the market but firmly advise get invested now in a range of well chosen funds including US stocks, and keep adding to to them as often as you can and take a long term view of 5-10 years. I like US Technology stocks as well. We're never going to go back to using the horse and cart, things will only progress, at an ever faster rate and tech will be at the forefront of everything.
The US stock market has grown over time under both Republican and Democrat Presidencies, it has prevailed under world wars, race riots, terrorist attacks, missile crises, and now a global pandemic.
I've invested in two Baillie Gifford funds so far, their American B and their Positive Change Fund B.
It's been less than two months but the American fund is up 10% and the Positive Change is up 6%. That's great so far and I have more to invest but it's the sudden spike in value that is making me cautious. Look at the American fund growth: steady, steady, steady, then this year BOOM despite a global pandemic. Is it artificially high (backed up by Washington?) and will soon collapse? Or is it likely to continue to grow and grow and I should invest more now? I'm new to this so have no idea.
https://i.imgur.com/H29MD3u.jpg
The way I look at this US stock "bubble" is that it is being lead by a few exceptional companies, but so what? Is Apple, Microsoft & Amazon etc likely to fail dramatically in the foreseeable future? I don't think so, in fact the money is down on the fact that they will continue to do well, maybe exceptionally well.
Could investors rebalance and move money to other US stocks the wider US economy recovers? maybe and that could bring the stock prices down in the big leaders. But, by being invested in a fund with a portfolio across a range of US companies, as the Baillie Gifford American B is, you should benefit either way.
It's a fund with a 20 year history of solid performance, so regardless of the current bubble, it should do well long term (with the caveat that there is no crystal ball that can predict the future)
Have a look here:
https://citywire.co.uk/new-model-adviser/fund/baillie-gifford-american-fund/c37074
an excellent time to buy I think
I was optimistic as we got the virus under control and commerce started rebounding but much less optimistic now.
I may reduce my exposure to UK SmallCaps, which is currently 50% of my DC pension down to 20% or maybe even switch to US or Global SmallCaps completely until next year and see how it goes.
I dunno, will sleep on it.
The frustrating thing is that Standard Life Group Pensions range of funds isn't overly exciting. I wish they had some Index trackers and a bigger range of funds like they offer for their ISAs
US stocks are over priced I think
These are unprecedented times we face but I am absolutely committed to being 100% invested in stocks, it's just the diversification mix across markets, regions and sectors I am less settled on.
my concern with UK SmallCaps is the current 2nd wave of Covid which will make for another 6 months of social distancing and the furlough scheme is ending next month so I can't see an immediate upside at present until the virus is back under control and infection rate declining again. However, smallcaps will recover fast once they start the bounce back.
Some people advise holding an index tracker that tracks the whole global stock market is the optimal approach for long term investing. Warren Buffet advices regular retail investors to just hold a cross section of American companies in a tracker such as Vanguard's S&P500 ETF for the long term.
I can't access index trackers with my main pension, the closest I can get to is a fund that tracks the S&P Islamic Global 100 Titans, an index of the 100 largest companies traded globally that are compliant with Shariah investment principles. It's pretty US large cap heavy with some of the usual FAANG constituents but that is a reflection of the current index.
Same thing with me: my employer pays salary sacrifice into mine (so I save NI too - although this employer splits the difference on that, it's still 6.5% extra), and I do a partial transfer from that employer-mandated-SIPP every few months into my own HL or ii SIPP
If the employer's one is a SIPP it should be poss