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Gustave

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About Gustave

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    HPC Newbie
  1. Gustave

    Investing An Str Fund

    Thanks to all for lots of helpful advice. As a novice/ignoramus on these matters, it's also interesting to me there are such a wide range of views... The main things I'd take from what people have said are: 1. No one knows what's going to happen, so diversification is the name of the game. 2. The big risk (in my circumstances) is inflation. There are a few things I'd like to ask on the back of that though: CURRENCY RISK Seems to me (as some posters have argued) that, since I eventually want to buy an asset in sterling - a house in England - messing about with other currencies is too risky. It might make me some money, but it might lose me some too. If I was an investor/speculator that might be fine. But all I really want to do is hold onto what I've got with an eye on an eventual house purchase. I can see there might be an opportunity cost. But why would I take the risk? Am I missing something? BONDS A couple of people recommended corporate bonds as a good investment. But doesn't their value fall if interest rates rise (which seems very likely at some point)? I know the yield rises at the same time, but I am only expecting to be in this for a year or two... INFLATION AND INTEREST RATES As far as I can tell the real risk for me is less high inflation per se than negative real interest rates, i.e. that inflation is higher than the interest I'd get on any savings. I think this risk arises whether the nominal rate of inflation is high or low. And you could argue that's where we are now, with CPI above base rate, couldn't you? Sorry if this is a dumb question, but how do you hedge against negative real interest rates?
  2. Gustave

    Investing An Str Fund

    Bardon - I bought in 2005 and have made a 25% profit - but a 30% loss against the starting valuation in late 2007/early 2008. I attribute this to: - crazy local house price inflation 05-07 - buying at a very competitive price back in 05 (relative to what happened over the following two years). Obviously it would have been better to have got out successfully earlier than this - but at the moment I'm grateful to have escaped with more than I started four years ago.
  3. I buy the general analysis on this site that the current bounce is "the last chance to sell" and so have just sold my flat (completing next week at a price 30% below the valuation I was given two years ago - ouch) and will be renting for at least the next year. I share the general pessimism here about future property price movements. I don't know much about investments and have been trying to decide what to do with my cash (about £100k) while I am renting. I don't expect to make a lot of money - I merely want to protect its value against the day (whenever that is) when I want to buy something again. I am thinking of doing something like: 50% in boring savings accounts 25% gold 25% stocks Does that seem sensible to all you experts out there? As I say, my appetite for risk is minimal, so the thinking behind this (such as it is) is purely defnsive.
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