How To Beat Uk Inflation

[delboypass]

If we think inflation is going to increase in the UK but interest rates are getting cut, then what do we have to do to beat inflation.

Does anyone have a game plan for this eventuality and would like to share it.

Im not to scared about the recent interest rate cut but i will be if there are any more.

what is the best way to shore our deposit savings up so they dont take a big hit with minimal risk??

Cheers

[Guest Riser]

Im looking at an allocated gold account at Baird & Co

Goldline

Approx. costs, discount for larger amounts:

Purchase around 1.0 - 1.25% above GB Spot

Sell 1.0% below GB Spot

Additional costs associated with allocated account ie your own physical bars in vault

1.25% to upgrade from unallocated account

Storage and insurance around £25 per kilo per year

You can book a visit to visit see your bars, sounds interesting, really depends what you think Gold Sterling will do in the next couple of years.

[delboypass]

i suppose if gold falls and the MPC actually starts to raise the interest rates to head off inflation, i could be holding a gold potato though??

What percentage of your pot have you transfered into gold??

Is there any other currencies that one could try to invest into and how do people invest money in other currencies without an extortionate fee.

[Nijo]

i suppose if gold falls and the MPC actually starts to raise the interest rates to head off inflation, i could be holding a gold potato though??

What percentage of your pot have you transfered into gold??

Is there any other currencies that one could try to invest into and how do people invest money in other currencies without an extortionate fee.

<{POST_SNAPBACK}>

Well you don't want all your potatoes in one basket - the idea is to find negatively correlated investments to limit your volatility.

I'm currently 1/3 cash (online savings), 2/3 equity (various funds bought through a fund supermarket, slightly UK biased but +10% since April 6th) which is somewhat high risk. Talk of the FTSE peaking around about now and a possible upwards gold break is leading me towards a 1/3 cash, 1/3 equity, 1/3 gold mix. Maybe more cash and less gold while I learn the ropes.

I do have a EUR account (from when I was working in Germany) but I've found that the banks get a little ansy when I transfer >3k at a time.

Sorry, bit of a ramble but the point is that you should mix it up a bit.

/2 units

[vinny]

Shares with div's reinvested (Oil and banks) 50%, NSI saving cert linked to RPI 20%,plus mixed cash and premium bonds with remainder. (Premium bonds are a bit more of a punt due to capital errosion, but what the heck)!!!!

[Unexpected]

Well you don't want all your potatoes in one basket - the idea is to find negatively correlated investments to limit your volatility.

I'm currently 1/3 cash (online savings), 2/3 equity (various funds bought through a fund supermarket, slightly UK biased but +10% since April 6th) which is somewhat high risk. Talk of the FTSE peaking around about now and a possible upwards gold break is leading me towards a 1/3 cash, 1/3 equity, 1/3 gold mix. Maybe more cash and less gold while I learn the ropes.

I do have a EUR account (from when I was working in Germany) but I've found that the banks get a little ansy when I transfer >3k at a time.

Sorry, bit of a ramble but the point is that you should mix it up a bit.

/2 units

<{POST_SNAPBACK}>

Thats close to what I'm thinking these days. I've still got too much in cash but will be slowly buying into energy, oil and ftse tracker stocks over the next few months.

Got a few k in physical gold (at home) in case the government change the rules about owning gold. Will end up with about 1/3 in cash as we cant quite be sure if the government actually plan to inflate their way out of this mess.

[delboypass]

If you are going allocated, should you not just hold them yourself??

Seems just as dodgy as unallocated..

If everything goes tits up, i would reckon unallocated and allocated and both going to be raided and very hard to get anything back??

BUT i suppose if you still rent like me then holding allocated is still probably better... (is this the plan??)

Derrick.

[sp1]

Gold is a a hard asset. But will only realise its tru value when the crowds wake up to the con of the value of the unbacked limit less USD.

In the end when the Hyper inflation from the USA unwindesthen it will be part of the right things.

But timing is every thing in investments, And I dont see that in the next few months.... So personally given confidence in USD and the reduced global demand expected due to global contraction then....its is not compelling for me to go Gold long as yet.

Saftey should be your consern and dont trust any one let your tested reasoning and self conviction drive your investment....

Does your idea on housing feed into your view of a worsening economy?? Then you may conclude the repossesions and liquidations have much further to go then some speciality debt and insolvency companis may be a good trade?

For the same reasons do you expect market sentiment to turn and expect a bear market with falling profits ?? If so then cyclical defensive stocks may be a part of your portfolio.

BUT please take your time slowly only buy stocks with say 10% of your cash (so put 90% in savings). Seriously in knoiw you thinck its not worth it but 95% of participants loose, so take the time to learn and gain experiance.

It all a big confidence trick....do you thinck the FTSE is pricing in the recession correctly??? It sure will no doubt.

Edited August 9, 2005 by sp1