Pension Advice From An Estate Agent - Bbc News 24

[Guest The_Oldie]

As it's national pension day, BBC News 24 interviewed an Estate Agent, who advises that the best investment is property as it always goes up.

[Realistbear]

So do equities over similar time periods. Equities have historically outperformed property 2:1. Thus, using the EAs same logic it is better to rent and invest all in the stockmarket, long term, of course.

For the investor, timing is everything. Sell near the top and buy near the bottom.

Stupid boy.......

[Golden Shower]

As it's national pension day, BBC News 24 interviewed an Estate Agent, who advises that the best investment is property as it always goes up.

So the BBC asked an EA about investment advice and he said property!!!?

I sometimes wonder why we pay a tax to fund the BBC...

:angry:

[Its time to buy]

well you might as well find useful information by asking an EA how to do heart triple by-pass surgery.

They are gods

[BillyShears]

So do equities over similar time periods. Equities have historically outperformed property 2:1. Thus, using the EAs same logic it is better to rent and invest all in the stockmarket, long term, of course.

For the investor, timing is everything. Sell near the top and buy near the bottom.

Stupid boy.......

How can I find out more about equities? Note: I'm aware of the dangers of investing money in things you don't really understand, so wouldn't be putting any money into them in the short term. But I'd like to find out more about them.

Billy Shears

[BillyShears]

well you might as well find useful information by asking an EA how to do heart triple by-pass surgery.

They are gods

The peace of mind resulting from being a home owner will lower stress levels, improving recovery and long term prospects!

Owning your own property also helps in cooking, because cakes rise better in OO homes than rented ones.

Billy Shears

[daveboden]

The snippet from the BBC was interesting. It made me realise how closely intertwined the housing bubble and the pensions mess are.

The average person has no idea whether to put £10k or 10p into their pension this year. There's no confidence that the money will be there in 30 years time. Bricks and mortar are a much more "obvious" investment. People can see what they're buying.

So, fortysomethings with money to spend may choose to plough money into buy-to-let property until there is a clear plan for pensions. Once you've bought a house and paid all that stamp duty, there's a lot of inertia. It's hard for someone to admit defeat and sell the property. All that spare money is propping up a grossly overvalued property market and will do for a little while longer due to the fact that anyone who buys a house is locked into the investment for at least a year due to their mortgage arrangements.

(p.s. I live in Greenwich renting for £1100 per month (the local estate agent, Urtopia, advertises the same properties for £1400 per month ), my landlords are selling up in August as soon as their morgtage agreement has finished and they don't have any penalty clauses).

[Realistbear]

How can I find out more about equities? Note: I'm aware of the dangers of investing money in things you don't really understand, so wouldn't be putting any money into them in the short term. But I'd like to find out more about them.

Billy Shears

Warren Buffett advises only investing in things you do understand. I only have a few stocks (UK Coal, RBoS) and have invested mostly in Mutual Funds (Fidelity, Vanguard and Oakmark--mostly all 5 Morningstar rated) to allow the experts to make the decisions. Overall, these funds rose about 16% in 2005 and are up about 4% so far this year which is outpacing property nicely.

Right now, I only have about 20% of our STM (sold to move) money in the markets with 80% in a risk free 4.27% savings account (loosely tied to the Fed rate) waiting to buy a house in the West Midlands after the Big Crash of 2005-20??.

[BillyShears]

Warren Buffett advises only investing in things you do understand. I only have a few stocks (UK Coal, RBoS) and have invested mostly in Mutual Funds (Fidelity, Vanguard and Oakmark--mostly all 5 Morningstar rated) to allow the experts to make the decisions. Overall, these funds rose about 16% in 2005 and are up about 4% so far this year which is outpacing property nicely.

Right now, I only have about 20% of our STM (sold to move) money in the markets with 80% in a risk free 4.27% savings account (loosely tied to the Fed rate) waiting to buy a house in the West Midlands after the Big Crash of 2005-20??.

Thanks for the info. I'll look into the mutual funds. I presume if you search hard enough there are statistics showing how well they perform so that regressions can be performed, error bars calculated, etc?

I remember Paul McCartney saying in an interview saying that he was advised to invest in things he knew. He said that what he knew was songs, and he started buying them. Bought up Buddy Holly's catalogue before his revival, and is said to have made a packet.

Billy Shears

[Scipio_Africanus]

Thanks for the info. I'll look into the mutual funds. I presume if you search hard enough there are statistics showing how well they perform so that regressions can be performed, error bars calculated, etc?

I remember Paul McCartney saying in an interview saying that he was advised to invest in things he knew. He said that what he knew was songs, and he started buying them. Bought up Buddy Holly's catalogue before his revival, and is said to have made a packet.

Billy Shears

Is it neccessary to by mutual funds? Don't like the idea of fund managers managing my money. New fund manager comes in, and he or she sells a perfectly good investement because they want to make their mark and buy their own pet sectors and companies. Also, fund managers' decisions might be influenced by the needs of performance tables. Buying individuals shares is not too expensive, if using a good online broker - worth it, in my opinion, it if one can put at least £500 in one share. So for a few thousand pounds you can build up something approaching a balanced portfolio.

As for advice on buying shares, spend a few months watching the market. Read some bulletin boards, like ADVFN, Motley Fool and Hemscott - but in the first instance don't believe anything anyone tells you. Read a book about charting, and also read about interpreting fundamentals and company reports - I'm not very good at following my own advice on the last two, but I should. Remember to check things like director buys and sells. Finally, remember the advice (which I NEVER follow!) of drip-feedling funds into the market (whether into stocks or funds) - buy putting a regular amount into the market every month you help to minimise the risk of the market crashing. Because your purchase price will average out, and during the crash it's likely that you'll be buying low.

[Realistbear]

Is it neccessary to by mutual funds? Don't like the idea of fund managers managing my money. New fund manager comes in, and he or she sells a perfectly good investement because they want to make their mark and buy their own pet sectors and companies. Also, fund managers' decisions might be influenced by the needs of performance tables. Buying individuals shares is not too expensive, if using a good online broker - worth it, in my opinion, it if one can put at least £500 in one share. So for a few thousand pounds you can build up something approaching a balanced portfolio.

As for advice on buying shares, spend a few months watching the market. Read some bulletin boards, like ADVFN, Motley Fool and Hemscott - but in the first instance don't believe anything anyone tells you. Read a book about charting, and also read about interpreting fundamentals and company reports - I'm not very good at following my own advice on the last two, but I should. Remember to check things like director buys and sells. Finally, remember the advice (which I NEVER follow!) of drip-feedling funds into the market (whether into stocks or funds) - buy putting a regular amount into the market every month you help to minimise the risk of the market crashing. Because your purchase price will average out, and during the crash it's likely that you'll be buying low.

I agree to a large extent. Mutuals can be overpriced when taking into account management fees etc. My funds all have industry lows on fees (Vanguard, Fidelity and Oakmark) around 1% or less and they are all no-load and mostly zero redemption when held for 90 days. Vanguard and Fidelity together are major market movers as they control well over $1 Trillion in the US and a sizeable amount in the UK. When they buy a stock the market usually moves!

For the novice stock investor or for the person that does not want to spend the time (or anixiety) picking their own stocks, mutuals are a good way to go.

The Fidelity website has some intricate histories with plenty of charts.

_____________________

Why I like UK Coal as a stock to buy:

http://www.housepricecrash.co.uk/forum/ind...showtopic=23040

There is a lot of money headed in coal's direction and new technology has eliminated the pollution problems of the Scargill days. The stock is up over 35% over the last year and Chinese money is about to be invested at the next energy review. With NS Oil about gone coal will rise again!

[Scipio_Africanus]

I can see the point of funds for markets that are difficult for the private investor to access - eg Japan, India, South America - but for the UK markets I don't think it requires a great deal of research to put together one's own fund, that has a reasonable chance of outperforming the market.

I think one of the best approaches to the stock market is recovery - momentum investing is too scarey, where you buy high in the hope of selling high, is in my opinion only for gamblers and experts. Oh, another piece of advice if you're considering buy stocks - look at the debt situation of company, and also its pension liabilities.

Edited March 18, 2006 by Scipio_Africanus