Depends so much on how much/how old you are/what your goals are/attitude to risk/your tax situation/prperty mortgage situation?
Depending on sum may be good idea to get in quick with an ISA. Ceratinly befor 5 april open a cash ISA if you dont have one (getting a fixed rate for a couple of years usually gives a decent rate). This would be max £5,340 although you could efffectively double with a spouse if you have one.
If you want to put some into equity you can open a stocks and shares ISA for a further £5,340. Personally I favour the legal and general Indexed funds which are low on fees and don't have a manager who may or not be good. They do one for FTSE index which you can do online.
Pension - very long term obviously, but most tax effecient if you want to do that.
You may need some advice but beware investment professionals as a good chunk of these want a slice.
You may need some advice but beware investment professionals as a good chunk of these want a slice.
For "good chunk" read "all".
Nothing wrong with getting paid for good advice of course, but a lot of people could probably get by with just the internet and a little bit of time doing some research.
Whatever you do don't invest in the stock market now. It's about ten percent off it's record highs - at least the ftse100 is and S&P 500. If you think you're an amazing wonder-market machine, then go for it, but there is no free-market reason out there that is going to replace the US's QE. You might make a bit of money, but in the next few years you will see a catastrophic drop, with a possible bounce who knows? Wait until then if you feel you have to invest in the markets. And don't invest in China, even if you're best mates with Anthony Bolton.
I think it's Leroy who loves gold, and is very knowledgeable about it. Of course the next market jitter it will go up. But for it to sustain those higher levels, you're going to have to have Jon Lydon singing World Destruction on the bar mitzvah circuit.
Talk to the experts, spread your investments, personally keep a lot in cash in various banks: make sure that they're not registered and owned under one of your other banks. But if some 'expert' says put some in the markets, almost any market, I'd shake his hand and walk out.
dont agree colin - if your investing for the long term, some stock market investment is probably wise. What you got against China - don't invest directly but investments that have exposure to china could well do well
dont agree colin - if your investing for the long term, some stock market investment is probably wise. What you got against China - don't invest directly but investments that have exposure to china could well do well
Why would you invest near the top of the market? The vast majority of people in the financial services want you to invest at any time, all the time. If the market can barely break it's highs of 1999, why would you invest when we're hovering around 6,000, and there is NO driver out there past QE? Of course you could invest and do well in equities, but again why invest money now when the average in the market only has a few percentage points of upwards movement. Why not buy equities when they're 50% off the value they are know?
Unless you pick the rare perfect share, timing your entry into the market is everything. Get a tracker fund, or an etf tracking a market, at the moment and you'll make better money in a cash ISA over the next 2-3 years. Long term investing in stock markets is good, but for god's sake don't invest when it's utterly irrational to do it. The tricks of laissez-faire capitalism of the last 40 years teaches you one thing in the wider market, invest counter cyclically. Maybe there'll be two crashes like between 1929-1933, at the next downturn, who knows? Either way invest in the market when it's in crisis, and keep some in cash at the same time: Trackers were perfect between the late 70's and late 90's, you'd always make money long term, not now you need to invest at the right time.
As for China it's a property disaster that's been waiting to blow up since the late 90's. The BBC may talk about the last few years, but ghost properties have been around for ten years plus. China's economy is more reliant on property building and speculation than the US ever was. Buying a coal miner in Indonesia will probably get you returns in the long run. Again if it's healthy why would you buy it at the top of a massive speculation bubble, when China still hasn't solved the internal retail market/consumption issue?
I'd agree with you that there's money to be made in the markets short term, there always is. Long term atm if you're picking and waiting you're a fool, a genius, or one lucky cnut. Long term, invest when there's some potential for an upswing, especially if you don't have time to follow them as if it's your job. There's too many things that can go wrong in the next few years, and something will.
Please can you tell me 1) when the market is at the bottom & i will invest my millions & then 2) when the market is at its top and I will take out my money..................
As you & I know that you can't do neither, then its probably best not to say anything. I had been telling clients for the past couple of years when the FTSE100 was around the 4500 mark that it was a good time to invest, based on historical values, but many didn't want to know.............now its at 6,000 they all want a piece of the action.
As I said previosuly..............best I go away & not get involved.
Colin - don't forget about dividend yield. All the current FTSE 100 constituents are yielding over 3%, some of the blue chips are paying over 5%. If you're a basic rate tax payer - that's tax paid too - try getting that from a deposit account. This factor means share prices are supported at current levels. (Unless Israel nukes Iran of course!) However, I do think tracker funds are, generally, a bad choice. When a FTSE 100 constituent gets booted out of the 100, the tracker is forced to sell and it is selling at a low price. It is then forced to buy the new constituent - which is getting promoted because its market capitalisation has already increased. Selling low and buying high sounds like a bad idea to me. The other factor is that trackers are generally weighted according to market capitalisation. So inevitably you are going to be holding a large proportion of your assets in oil, mining, financial services and pharmaceuticals. If one sector, eg the banks gets hit - you get hit with it. At the moment, 24 of the 100 constituents are financials, accounting for 20% of the total FTSE100 capitalisation. Opting for a FTSE 100 tracker fund means a punter is putting many of his eggs in one basket.
As an ex- Financial adviser (just retired), I tend to agree with Colin Tat. Although, I know very little re China, so I make no comment in that regard.
I also agree with golf that it's a devil's own job to get most people to invest at 4500 when they should be. Yet, everyone wants to pile in when it's gone up to 6000. This is exactly the wrong strategy.
You should buy low and sell high. You buy in the sales, not when prices are sky high. People know this but they're too scared to do it.
I've had a lot of success investing at the bottom of the market, I managed to pick exactly the right day in 2009, when it bottomed out. I'm not so good at picking the top of the market, although I do follow a formula (like Peanuts).
I must say that pre Xmas it all looked doom and gloom and I expected the market to continue falling. I'm amazed that the market has risen from 5200 approx to 6000 now. There appears not enough good reason for it to have done so IMO. It appears that the media have gone from total doom and gloom, to great optimism, mainly because Greece has been bailed out (although they are still insolvent) & the US economy has picked up.
So yes I agree with Colin Tat that IMO now is not the time to invest in equities. Yes, I've missed the boat somewhat, but it will return & when everyone else is bailing out, I'll be climbing aboard. Often sell in May & go away & return again on St Leger's day (September) works. So I won't be surprised if the market slips back in a months time & falls until September. It happens more often than not.
are banks worth looking at, are they a bit undervalued at the moment, or is the imminent euro problem and liquidity crisis likely to wipe them out further
(as you can probably tell I know nothing, but am genuniely interested in this stuff)
are banks worth looking at, are they a bit undervalued at the moment, or is the imminent euro problem and liquidity crisis likely to wipe them out further
(as you can probably tell I know nothing, but am genuniely interested in this stuff)
That is precisely the dilemna. I have some bank shares & yes if the economy picks up & The Euro zone doesn't fall over, they are a cheap price. However, if the sbove happens, they could get hit even harder. As I already hold some I'm not willing to put more in.
I should have bought Barclays a couple of years ago when they were about 30p & are now £2.50 ish. Barclays said they were fine, but so did all the others. I chickened out.
Please can you tell me 1) when the market is at the bottom & i will invest my millions & then 2) when the market is at its top and I will take out my money..................
Cheers golf. As always your rule of thumb thinking, and generalised precis is erm nothing really. Did I say I could predict the exact top of the market or the bottom? Erm that's a no. So you're actively shouting from the roof tops to your clients to generally buy at 6,000? Looks like it's a no.
Might have I said that's it not worth investing when you're near the top of a cycle, when there is no logical economic reason for economies to organically sustain growth? I don't have to predict the top of the market in anyway to protect my capital. Sure I can easily get the bottom wrong. I have to make a decision on whether government policy is close or will be holding up the market. I don't have to make the exact call on the top or the bottom. That call is exactly the same at 4,500 in December or June as to 3,800 in October or February
I said invest in the market when it's in crisis. Where did I say I predict the bottom? Seen as it's monumentally obvious when there's a crash, make your own decisions when it's best to jump in. Using your historical rule of thumb, lows hit inbetween October and November and then are tested inbetween February and March of the next year: perhaps a little bit earlier if your following an indivdual company.
Do you just advise on historical values? I'd hate to think you didn't have any analysis as to why say Bernanke wouldn't push to carry on using the printing press, or whether government was willing and monetarist policies were strong enough to counter further downward pressures. I'd have loved to invest with you in 1930 on 'historical values' theory.
Make your own decisions. I'm unsure of monetarist Friedman acolytes being able to save the US economy in the next serious economic turmoil. I can easily be wrong for a few more years or for way too long, and lose out on a lot of cash. But I'll always be happier investing in a trough than a peak, whatever investment if I'm long in it: short, medium or long term.
Actually what are you saying golfie? Apart from throwing your investment abacus out your office, you seem to be agreeing buy around the crisis? Nice one, I agree with you.
I agree with you cafcfan, but if you're not able to track the markets very closely and understand a fund managers strategy, then etfs and trackers diversify your investments and take away some of the punt.
Oh and golfie it was around 4,500 for a couple of months in 2009 post crash. Nice to be telling them that for a few years. Glad to see you keep so abreast of movements affecting your timely advice.
The problem with investing at the bottom is that you only know that it's there when share prices start rising. I know of a few people who dived in when companies like Lloyds and Barclays halved in a value in the autumn of 2008. The problem is they went much, much lower.
That said there is a Warren Buffet quote - "be greedy when others are afriad and afraid when others are greedy" and it always pays to bear in mind that share prices often fluctuate according to crowd behaviour and can gain or lose a lot of money quite quickly and for reasons out of your control. The best srategy in these uncertain times is to invest in what you know - if the whole FTSE 100 thing looks greek to you then steer well clear.
Thanks very much for all the advice. After consideration I will be investing in hard assets. The MF Global fraud has made me realise that no paper assets are now safe. There's been a good pullback in Gold and thats where I'm putting my nest egg.
Well good luck with that but I would certainly not put all my money in one commodity! I reckon somewhere between 5-15% in metals (or metal related shares, eg gold miners, is enough. I take it you will not be keeping it under the bed but will be paying someone to look after it for you? That'll cost aroung 1% per annum and if the price takes a hit - say Australia finds another large goldfield - you'll be feeling a bit sick. You'll be losing, say 5% pa interest, which you should offset against any gains and you can't shelter it from tax in an ISA, so even if you do make a wedge, it'll be liable to capital gains tax. If you do have a significant sum of money to invest you should first work out what your attitude to risk is. Try that here scottishlife.co.uk/scotlife/web/site/Consumer/Investment/ConInvYourAttitudeTo.asp. And check out the Money Advice Service web site moneyadviceservice.org.uk/yourmoney/ If you don't feel you have sufficient knowledge about investments, then, as much as I hate to say it, I'm afraid you should bite the bullet and speak with a professional. (Oh, and make a will!) Diversification is king.
Comments
http://www.gyrconsulting.org/
do you want to whisper me (or however you do it) the main details of what you have & what you are looking for then I'll let you know if I can help.
thanks
Could any man ask for more?
Depending on sum may be good idea to get in quick with an ISA. Ceratinly befor 5 april open a cash ISA if you dont have one (getting a fixed rate for a couple of years usually gives a decent rate). This would be max £5,340 although you could efffectively double with a spouse if you have one.
If you want to put some into equity you can open a stocks and shares ISA for a further £5,340. Personally I favour the legal and general Indexed funds which are low on fees and don't have a manager who may or not be good. They do one for FTSE index which you can do online.
Pension - very long term obviously, but most tax effecient if you want to do that.
You may need some advice but beware investment professionals as a good chunk of these want a slice.
Nothing wrong with getting paid for good advice of course, but a lot of people could probably get by with just the internet and a little bit of time doing some research.
I think it's Leroy who loves gold, and is very knowledgeable about it. Of course the next market jitter it will go up. But for it to sustain those higher levels, you're going to have to have Jon Lydon singing World Destruction on the bar mitzvah circuit.
Talk to the experts, spread your investments, personally keep a lot in cash in various banks: make sure that they're not registered and owned under one of your other banks. But if some 'expert' says put some in the markets, almost any market, I'd shake his hand and walk out.
Unless you pick the rare perfect share, timing your entry into the market is everything. Get a tracker fund, or an etf tracking a market, at the moment and you'll make better money in a cash ISA over the next 2-3 years. Long term investing in stock markets is good, but for god's sake don't invest when it's utterly irrational to do it. The tricks of laissez-faire capitalism of the last 40 years teaches you one thing in the wider market, invest counter cyclically. Maybe there'll be two crashes like between 1929-1933, at the next downturn, who knows? Either way invest in the market when it's in crisis, and keep some in cash at the same time: Trackers were perfect between the late 70's and late 90's, you'd always make money long term, not now you need to invest at the right time.
As for China it's a property disaster that's been waiting to blow up since the late 90's. The BBC may talk about the last few years, but ghost properties have been around for ten years plus. China's economy is more reliant on property building and speculation than the US ever was. Buying a coal miner in Indonesia will probably get you returns in the long run. Again if it's healthy why would you buy it at the top of a massive speculation bubble, when China still hasn't solved the internal retail market/consumption issue?
I'd agree with you that there's money to be made in the markets short term, there always is. Long term atm if you're picking and waiting you're a fool, a genius, or one lucky cnut. Long term, invest when there's some potential for an upswing, especially if you don't have time to follow them as if it's your job. There's too many things that can go wrong in the next few years, and something will.
Please can you tell me 1) when the market is at the bottom & i will invest my millions & then 2) when the market is at its top and I will take out my money..................
As you & I know that you can't do neither, then its probably best not to say anything. I had been telling clients for the past couple of years when the FTSE100 was around the 4500 mark that it was a good time to invest, based on historical values, but many didn't want to know.............now its at 6,000 they all want a piece of the action.
As I said previosuly..............best I go away & not get involved.
(Unless Israel nukes Iran of course!) However, I do think tracker funds are, generally, a bad choice. When a FTSE 100 constituent gets booted out of the 100, the tracker is forced to sell and it is selling at a low price. It is then forced to buy the new constituent - which is getting promoted because its market capitalisation has already increased. Selling low and buying high sounds like a bad idea to me. The other factor is that trackers are generally weighted according to market capitalisation. So inevitably you are going to be holding a large proportion of your assets in oil, mining, financial services and pharmaceuticals. If one sector, eg the banks gets hit - you get hit with it. At the moment, 24 of the 100 constituents are financials, accounting for 20% of the total FTSE100 capitalisation. Opting for a FTSE 100 tracker fund means a punter is putting many of his eggs in one basket.
I also agree with golf that it's a devil's own job to get most people to invest at 4500 when they should be. Yet, everyone wants to pile in when it's gone up to 6000.
This is exactly the wrong strategy.
You should buy low and sell high. You buy in the sales, not when prices are sky high. People know this but they're too scared to do it.
I've had a lot of success investing at the bottom of the market, I managed to pick exactly the right day in 2009, when it bottomed out. I'm not so good at picking the top of the market, although I do follow a formula (like Peanuts).
I must say that pre Xmas it all looked doom and gloom and I expected the market to continue falling. I'm amazed that the market has risen from 5200 approx to 6000 now. There appears not enough good reason for it to have done so IMO.
It appears that the media have gone from total doom and gloom, to great optimism, mainly because Greece has been bailed out (although they are still insolvent) & the US economy has picked up.
So yes I agree with Colin Tat that IMO now is not the time to invest in equities. Yes, I've missed the boat somewhat, but it will return & when everyone else is bailing out, I'll be climbing aboard. Often sell in May & go away & return again on St Leger's day (September) works. So I won't be surprised if the market slips back in a months time & falls until September. It happens more often than not.
(as you can probably tell I know nothing, but am genuniely interested in this stuff)
I should have bought Barclays a couple of years ago when they were about 30p & are now £2.50 ish. Barclays said they were fine, but so did all the others. I chickened out.
Might have I said that's it not worth investing when you're near the top of a cycle, when there is no logical economic reason for economies to organically sustain growth? I don't have to predict the top of the market in anyway to protect my capital. Sure I can easily get the bottom wrong. I have to make a decision on whether government policy is close or will be holding up the market. I don't have to make the exact call on the top or the bottom. That call is exactly the same at 4,500 in December or June as to 3,800 in October or February
I said invest in the market when it's in crisis. Where did I say I predict the bottom? Seen as it's monumentally obvious when there's a crash, make your own decisions when it's best to jump in. Using your historical rule of thumb, lows hit inbetween October and November and then are tested inbetween February and March of the next year: perhaps a little bit earlier if your following an indivdual company.
Do you just advise on historical values? I'd hate to think you didn't have any analysis as to why say Bernanke wouldn't push to carry on using the printing press, or whether government was willing and monetarist policies were strong enough to counter further downward pressures. I'd have loved to invest with you in 1930 on 'historical values' theory.
Make your own decisions. I'm unsure of monetarist Friedman acolytes being able to save the US economy in the next serious economic turmoil. I can easily be wrong for a few more years or for way too long, and lose out on a lot of cash. But I'll always be happier investing in a trough than a peak, whatever investment if I'm long in it: short, medium or long term.
Actually what are you saying golfie? Apart from throwing your investment abacus out your office, you seem to be agreeing buy around the crisis? Nice one, I agree with you.
I agree with you cafcfan, but if you're not able to track the markets very closely and understand a fund managers strategy, then etfs and trackers diversify your investments and take away some of the punt.
That said there is a Warren Buffet quote - "be greedy when others are afriad and afraid when others are greedy" and it always pays to bear in mind that share prices often fluctuate according to crowd behaviour and can gain or lose a lot of money quite quickly and for reasons out of your control. The best srategy in these uncertain times is to invest in what you know - if the whole FTSE 100 thing looks greek to you then steer well clear.
If you do have a significant sum of money to invest you should first work out what your attitude to risk is. Try that here scottishlife.co.uk/scotlife/web/site/Consumer/Investment/ConInvYourAttitudeTo.asp.
And check out the Money Advice Service web site moneyadviceservice.org.uk/yourmoney/
If you don't feel you have sufficient knowledge about investments, then, as much as I hate to say it, I'm afraid you should bite the bullet and speak with a professional. (Oh, and make a will!)
Diversification is king.