Hi,
Maybe you can help me formulate a Better response.
I occasionally get Private Messages from people asking for advice,
and as I do not know the full situation of the one asking, and do not have
the time to get deeply involved, and am uncertain about how to respond.

Many hear may be able to offer as good or better advice than I can.
You may have had success with certain approaches that are unfamiliar to me.

= = =

SO IF someone said:
"I have STR, and have alot of money to invest now, what do I do?"

- -

HERE was my own recent response:

I often get these types of questions, and I am never sure how to respond. I am playing a very different game: active management of my own money

I suppose that I would advise to put the vast majority of your "investible capital" (after putting some cash away for emergencies) into a good fund, or funds. But try and manage a portion (10-20%?) yourself, and that way you will learn faster.

Which funds? I invest mainly in North America, so am not sure which to suggest. Take a look at the commodity oriented funds. The Merrill Lynch Gold fund is meant to be good. With maybe a little into something like Golden Prospect, a smaller fund, with some smart people

Good luck. Maybe you would like to follow some links from a website like:
http://www.FinancialSense.com or
http://www.Goldstock.co.uk ,
if you want to learn more about commodity-related investing.

My own risk tolerance is way higher than most people, but that is fine for me since i actively manage that risk.

But sometimes it means that I wind up sitting with some big losses.

For example, My October Puts on Ftse are not looking to healthy, while at the same time I have been cashing some nice profits on US puts.

I think what should be considered is what a STR is trying to pull off. The end result being able to re enter the housing market with either a better property, lower mortgage or both????

If a STR has timed their sale "right", then does the capital really have to work that hard to produce the desired effect? Methinks no.

Yeah, it would be great to see 20%+ returns YOY, but thats not what is required.
I suggested to someone in this position (with 74K I think) to look at cash ISA, saving certs and premium bonds. Hardly high end, high return or high risk, but would safely pull off my suggested "end result" + tax free.

Risk is the factor here, as you elude to. A STR has, by STR'ing, just taken a really big punt already. Why then, risk this capital (who knows their position - would they ever be able to replace it if it goes pear shaped)? for a greater return.

My advice was to let the crash + your cash do the work.

TBH an ISA isn't really going to be much use - for a STR with a decent lump sum the annual cap is only going to be <10%. I see ISAs as useful if you can put money in every year and build up a sizeable chunk over (say) 10 years, but if you intent to buy "after the crash" you won't have answered the question of what to do with 90% of your cash.

*If* you have some belief in the stock market going up (the FTSE100 is below the long-term trendline, though the FTSE250 is not) then I would recommend an index tracker. These have low entry/exit costs and will perform 'averagely' well.


I think it might be useful if somebody in the know could talk about the annual CGT allowance...

Nijo, taking a mini ISA on its own, yep, you are quite right. But, coupled with premium bonds and saving certs then 63K can be invested straight away.

30K premium bonds.
15K fixed interest savings cert.
15K Linked to RPI.
3K mini ISA.

For a couple STR'ing ----- could double this amount.

I think, and don't take this amiss, that you have not got the main thrust of my reasoning for these investments for a STR. You are of course quite correct when refering to low returns. But consider the risks with say shares. I don't see much difference between a homeowner MEWing and buying shares with the "proceeds" (or even BTL'ing), and someone putting their STR proceeds on the stock market.

This would eventually, in effect, be playing your equity on your home against a market. And where has that got us to?

Interesting point raised with FTSE. I think we are at a turning point, (charting the FTSE), and the fundamentals look good with (generally most) FTSE stocks to my eyes. I am more unsure of the which way we go after the "turning point", up or down, I know not.

I am thinking of starting a thread for those interested in high-risk investing, sinec ISA are really not my cup of tea.

But to kick things off, I have mentioned on another thread three of the stocks I invested in recently:
http://www.housepricecrash.co.uk/forum/ind...22&t=13716&st=0

I think you will see that this game is not for everyone

Seems a good idea

I agree with vinny. AnD PLEASE PLEASE PLEASE...anyone investing in any market instrument that has potenitial for loss please prove to your self you abilty to take a stop loss other wise you could really be worse off.

IF your in experience with markets aits easy to become prey.

Seriooulsy follow vinny and use 10k to learn to manage your own money with DrBubb and otheres ideas but i would say having str already you got the contrarian inside you to learn contrarian thinking in other markets..but learn the experience with smal amounts....

Learning is more valuable than not positioning big size to porift for your current and early moves.....