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My wife inherited 1/3 of a house 18 months ago. Surprisingly, after little or no interest from buyers for months, a sale is now about to complete at around 90% of the 2007 valuation. Needless to say, choosing where to put the inheritance now is a scary prospect. As neither of us have really had the problem of looking after money before, we are pretty well clueless. Total is about £75K and helpful suggestions are welcome.

My feelings would be right now that gold and/or silver are probably better than property, which in turn is probably just as bad as shares. A savings account may be better than any of this short term, with the government guaranteeing deposits. Some foreign currencies might be the best of the lot. I guess spreading the money around a few different things will probably reduce the risks and returns. Overall, my HPC "religious view" would be that the UK's looking pretty goosed and will be for years. After a bit of deflation, I reckon there will have to be some high inflation and interest rates to match.

A couple of specific questions here:

1)- Might the deposit guarantee be pulled, amended, or simply defaulted by the government if they're in more crap than they are letting on? I suppose if they keep it at the same cash level, then inflation could render it much less worthwhile.

2)- If the Dollar absolutely crashes, how does this affect the price of gold? Presumably gold just shoots up by a corresponding amount so is there any point waiting for a better exchange rate to make the gold cheaper?

3)- Is the only way to buy Chinese Yuan to go and pick up travellers cheques or cash from the Post Office or Tesco or somewhere? Am I right in thinking you can't open a Yuan account?

On the other hand of course, food for thought:

1)- The gold price is already high, so might not be a great idea.

2)- China, with all its manufacturing, might not want to see its currency go up too much - unless perhaps they want to buy the rest of the world at a knock-down price! Maybe a low-debt, service-based country's currency would be a better bet (is there such a thing?)

3)- Some shares will out perform others.

May I respectfully point out that the kind of pseudo-humourous "Buy a gallon of cyanide and down it in one - we're all doomed anyway" replies already have several other perfectly good threads on the go. Equally, I understand perfectly well that "if we knew where the price of <insert something here> was going, we'd all be billionaires". That shouldn't mean that ideas can't be propsed and justifications attempted. Thanks for your understanding!!

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There's not an easy answer I'm afraid. Can't you buy a cheap repossessed property and rent it out? In the short term it may lose value, but if you don't need to sell it for a while this shouldn't be a problem.

Gold and silver are expensive (are they in a bubble?), and if we see deflation they could fall in value by 80%. They also give you no income and can be stolen.

Cash is a winner if we see deflation. Deflation is clearly winning at the moment.

Corporate bonds give a good yield at present, but are in an epic bear market and look overbought at present.

The stock market is cheap, but if we see deflation it will get cheaper.

People who play with currencies usually get their fingers burnt.

Are you seriously believing what the Chinese government tell us?

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Thanks for the info DrGUID. You talk a lot of sense.

Certainly we have thought about picking up a 2 bed terrace, but would probably wait a few months expecting further falls. There are certain areas in east Manchester which will benefit from the expansion of the tram network, and others in Salford where much of the BBC is moving to, so that's a distinct possibility as these areas should outperform the average. We're still not there yet, but a purchase price of £60k might give a net return of 6 or 7% on current rents after allowing for an agency fee and a reserve for repairs. Don't need an agent I suppose. Risk of not finding a tenant or worse, getting one who doesn't pay up. Events of the last couple of years suggest we might not make a killing on the sale price for quite some time!

Interesting what you say about gold. I suppose I've looked at it as something that won't drop by much but would be more likely to go up. How could deflation cause such a fall? If prices fall by 10% over the next 18 months, wouldn't gold just fall at the same rate, leaving it unchanged in real terms?

China has been investing lots of money in several African countries' infastructure including education. My guess is that they can see the day when it's too expensive to manufacture in China, so they will move the production lines to Angola, Mozambique etc. As that unfolds, it could be less improtant to keep the value of their currency low. I know currency is a risky area and all the more so when you believe that the Pound, Dollar and Euro all look to be at risk. I'm just casting around for countries that may not suffer as much, and China and Brazil came to mind first. Guesswork really!

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How about something you can actually enjoy? I don't know your tastes, but I've just enjoyed a very pleasant glass of wine. Would your home accommodate works of art, for instance?

In pure money terms, I invest where it's tax-efficient. For me, that's a SIPP and a few VCTs (as well as the obligatory £7.2K ISA).

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How about a Natural Gas ETF?

I bought NGAS ETF at 2.47 in 2007 and sold in June 2008 with the price at 3.05 - a 25% return. How much is NGAS now?

0.66

Incredibly cheap!

I know there are concerns over there being too much gas in the market, which has caused such a marked contraction in the price, however if you're prepared to wait a few years (probably less) the upside is there for all to see.

I would consider it a good punt with such a small downside and a recent market high (pre-peak gas remember, whenever that comes) of 4 times its current value.

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