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Have You Any Suggestions For Somewhere To Invest?

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At the moment I am about 50% cash and 50% in a variety of shares/ funds.

I still have not invested in the £4k mini ISA allowance for 05/06. Losing the tax benefit of this would irk me somewhat but I am happy to forgo it rather than invest the money for the sake of it.

I’m not even going to mention property but let me start with:

Cash

Not very happy with the weighting I have invested here. Back of a fag packet, I reckon I see somewhere between 3.0-3.5% after paying 40% tax on the portion that is not sheltered from tax. Given that I consider inflation to be under-reported I think that this is, at best, standing still. I do not have complete confidence that more money will not be printed to ease the debt burden and try and pull the UK and US economies out of the mess they have got themselves into. Therefore keen to reduce my cash holdings.

Dollar/ Euro accounts

I’m not considering dollars because I think the US economy imbalances are going to cause some severe problems. Other economies cannot continue to buy dollars with the same voracious appetite.

I did consider a Euro account a couple of months ago as it seems to be gaining further traction in the world – clearly an obvious choice for central banks trying to reduce their dollar purchases. However, I believe the US will defend the unique status of the dollar and the ability to export inflation (in effect an excellent way of collecting tax from an “empire”) very vigorously (Iraq?). Couple this with the fact that I don’t think that the Euro has been severely tested yet and I have come to the conclusion that the Euro could be riskier than it at first appears (the Euro project does not make economic sense in terms of a currency union but it did (/does?) make political sense – what will happen when Ireland et al are feeling real pain and the ECB sets policy sensibly weighted to the German powerhouse?)

Accounts denominated in other currencies – open to suggestions but not a particular fan of fiat money.

Gold

I did consider this last year but didn’t get my act together. From where it is at the moment I’m not that keen to invest. Gold suffers from central bank manipulation and the fact that its primary usage is as a store of value and therefore costs to store rather than being used productively. I know this is a popular investment choice here but it’s not for me.

Fixed income

Yields too low to mention.

Shares

In general the liquidity in the global markets have caused asset prices to balloon. This isn’t just pushing the FTSE past 6000, “emerging” markets are affected too. The kind of thing I would be happy with is a company that would do equally as well in a downturn and delivers healthy regular dividends.

I’ve prattled on for too long. In essence I’m saying that fiat money causing an asset boom means that for a normal investor there are no sensible places to go. Shorting shares and spreadbetting are outside my comfort zone – do I need to change this?

Does anyone have any interesting ideas/ suggestions?

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I think that the Dec Puts are pretty high on the old risk reward spectrum though. what about corporate debt ?

There has been a bit of a crash in bonds recently what with riseing rates world over and all that and in the next months could get better temporarily.

dollar denomonated debt is up to 6.2% ish now for the terminal risk takers :)

despite the spreads over treasuries being liable to widen. if we see a Japan style ZIRP (zero interest rate policy) in the US or UK that Phat 5.5% yield could be sweet.

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Guest boredwaiting

"Dec Puts are pretty high on the old risk reward spectrum"

I absolutely agree with that.

I am prepared to lose the whole amount of the premium that I put up. But I see the clear potential to make 4-5 times what I pay for the puts.

Currently, I have about 3% of my networth in this "risky strategy", and I would like to bump that up to over 10% in the coming weeks

PLEASE NOTE that i am buying DECEMBER puts, so I can be wrong for weeks and months, and still make money before they expire. And I may prove to be spectacularly wrong, and then later spectatcularly right.

Which company did you use to make the puts?

I followed your investement thread on singing pig - (i lost track towards the end due to heavy workload - but was quite impressed with your success.

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DrBubb,

I can understand buying puts to hedge a portfolio. Or as a punt. But as a place to invest?

As I see it, the key to everything is knowing if and when the current equity bull market is going to end. Going defensive or bearish too early could cost almost as much money as being overly bullish. If the bull market carries on until the Autumn of 2007 or later (as I believe it will) then going defensive could be very costly. You might be vindicated in 2008 or later, but in the mean time you have foresaken massive profits.

It seems to me that bubbles are called to early - I thought that property was expensive in 1999! As for equities, it's possible that the bubble hasn't even started.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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