Small caps is where I’ve parked my money, biggest difference in price with large caps in something like 35 years. Obviously no big tech in there and it’s much higher risk so certainly not suitable for Prague. But seems a decent place to be exposed to any ai boom and equally keep safe from the ai bubble popping for companies like nvidia.
Whilst I expect there could be a correction at some point where it comes to tech stock, it would hopefully differ in many ways to what happened with the dot com crash 25 years ago.
The companies propping up the tech/AI market are far more stable businesses now than they were in the late 90s/early 00s, and they now have decades of revenue performance to demonstrate it.
Does anyone else find it really interesting/surprising/worrying that we are in a world where gold is up 47% YTD, and the S&P is up 14%?
It feels like everyone is terrified of missing out so pumping the S&P whilst being absolutely terrified of what is coming, so also pumping gold!
I really wish I'd bought gold earlier this year, I might be about to get my hands on a little bit of cash and still think it would be a good purchase!
I stopped buying gold about 12 months ago, I also sold what I had in a fund back in March, but still hold a fair amount of physical gold. Not sure I'd buy more at this stage but that's as much about already holding quite a lot, just buy a few gold sovereigns if you want to enter the market, or a fund if you have space in ISA/SIPP etc.
That said I've also liquidated around 2/3rd of my SIPP to lock in the growth since March, currently sitting in cash, which does earn last time I looked 2.5% (having slowly dropped this year from 3.25%) so not the end of the world.
You should be doing better than that in “cash”. Still 4% + in money market funds, and just about 4% for 1 year bonds with reputable British- based banks ( and HSBC😂)
There are a limited number of SIPP'able deposit account providers and very few, if any, would pay those sorts of rates on deposits. You may be able to get a bit more on MMFs but they do carry risk, although pretty low in normal times (which these are not!).
ok, I missed the “SIPP” context. I have a SIPP but as a tax NR it doesn’t fully function as such. I am busy de-risking it right now by gently cashing out profits from any funds which have tech stuff. MMFs are not, as you say, risk-free but they are a lot less risky right now than many of the funds I am in.
Can I ask what your rationale is for this?
Is it because you judge the AI/Tech bubble is set to burst or just the right time to bank the profit?
My curiosity, following these conversations where investors switch funds , is what makes people lose a bit of faith in the judgement of the fund managers.
The US generally feels like it’s outperforming despite everything Trump does and should surely stall at some point but who knows when.
The key thing here is my age (71) . If I were 51 I would not be doing this, not least because I wouldn’t be able to touch my SIPP whereas now I want to start using some of the hard-earned cash.
I do think it has developed into a bubble, especially when someone like James Anderson, who remains a big believer in Nvidia, expresses his concerns about it. The other factor that has bothered me is that most of us who are mainly in funds rather than direct shares, hold far more tech than we realise in our broader based funds.
Appreciate the response.
Your last point does tend a little to a lack of faith (to a degree) in the fund managers ie exposure to tech.
As ever spotting when a fund is starting to lose its sparkle is a hard thing to do.
Does anyone else find it really interesting/surprising/worrying that we are in a world where gold is up 47% YTD, and the S&P is up 14%?
It feels like everyone is terrified of missing out so pumping the S&P whilst being absolutely terrified of what is coming, so also pumping gold!
I really wish I'd bought gold earlier this year, I might be about to get my hands on a little bit of cash and still think it would be a good purchase!
I stopped buying gold about 12 months ago, I also sold what I had in a fund back in March, but still hold a fair amount of physical gold. Not sure I'd buy more at this stage but that's as much about already holding quite a lot, just buy a few gold sovereigns if you want to enter the market, or a fund if you have space in ISA/SIPP etc.
That said I've also liquidated around 2/3rd of my SIPP to lock in the growth since March, currently sitting in cash, which does earn last time I looked 2.5% (having slowly dropped this year from 3.25%) so not the end of the world.
You should be doing better than that in “cash”. Still 4% + in money market funds, and just about 4% for 1 year bonds with reputable British- based banks ( and HSBC😂)
There are a limited number of SIPP'able deposit account providers and very few, if any, would pay those sorts of rates on deposits. You may be able to get a bit more on MMFs but they do carry risk, although pretty low in normal times (which these are not!).
ok, I missed the “SIPP” context. I have a SIPP but as a tax NR it doesn’t fully function as such. I am busy de-risking it right now by gently cashing out profits from any funds which have tech stuff. MMFs are not, as you say, risk-free but they are a lot less risky right now than many of the funds I am in.
Can I ask what your rationale is for this?
Is it because you judge the AI/Tech bubble is set to burst or just the right time to bank the profit?
My curiosity, following these conversations where investors switch funds , is what makes people lose a bit of faith in the judgement of the fund managers.
The US generally feels like it’s outperforming despite everything Trump does and should surely stall at some point but who knows when.
The key thing here is my age (71) . If I were 51 I would not be doing this, not least because I wouldn’t be able to touch my SIPP whereas now I want to start using some of the hard-earned cash.
I do think it has developed into a bubble, especially when someone like James Anderson, who remains a big believer in Nvidia, expresses his concerns about it. The other factor that has bothered me is that most of us who are mainly in funds rather than direct shares, hold far more tech than we realise in our broader based funds.
Appreciate the response.
Your last point does tend a little to a lack of faith (to a degree) in the fund managers ie exposure to tech.
As ever spotting when a fund is starting to lose its sparkle is a hard thing to do.
A few fund management groups that I deal with have been reducing their exposure to US stocks & favouring UK, Europe & Emerging Mkts. Not by much, maybe a few % here & there, but it's been happening since the start of the year.
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The companies propping up the tech/AI market are far more stable businesses now than they were in the late 90s/early 00s, and they now have decades of revenue performance to demonstrate it.