Having 2 or 3 years of living expenses in bonds might be wise once retired simply to cover
when equities crash.
Not exact matches
However, multiple mini flash
crashes occurred on the same
equity in Control Period 1 only once, on October 14,
when one
equity experienced two mini flash
crashes.
At the same time, investors can take it upon themselves to be proactive about tracking mini flash
crashes in
equity markets, and to integrate technical safeguards to moderate cross-market flight to safety,
when instances of abnormal instability arise.
When disaster strikes — and it always strikes, whether it's a flash
crash or a terrorist attack — you can find your entire
equity wiped out in no time.
Takeaway: recent oil
crash creates a long - term income opportunity for brave investors While it can be hard to buy
equities in whatever industry is Wall Street's latest whipping boy, this is precisely the time,
when pessimism and uncertainty are near their peak, that the best long - term investments are made.
The former was
when Canadian
equity values were peaking, right before the
crash.
But,
when equity markets
crash there's a move to safety of the bond markets.
For example,
when equity markets
crash, money flows out of stocks and into safe havens like high - quality bonds, which drives their prices up.
Once a reliable hedge against
equities, gold has, to a very large extent, lost its status as the go - to safe haven for investors
when stocks start
crashing.
That's important because you don't want to go into a market meltdown with too much in stocks and end up bailing on
equities at the market bottom — or have less than you should in stocks after a
crash and miss out on the gains
when stocks rebound.
I had about 80 % cash and 20 %
equities when the market
crashed and now moving this cash in companies and ETFs I like.
Janus, known for its concentration in technology stocks that led to a rapid rise and fall
when the sector boomed then
crashed in the early 2000s, is diversifying away from domestic
equities as it seeks to stanch investor withdrawals.
What gets me is people who only look at the index number
when talking about how long it takes for
equity investors to recover their investment after a
crash which ignores dividends.
We saw during the financial
crash, flash
crash and other panics, that
when equities sold off, so did gold, commodities, real estate and other asset classes that people traditionally used to diversify out of stocks.