Stock market is a "fully-fledged epic bubble" and will burst
Discussion
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hstewie said:
hstewie said: I have a reasonable amount for me in Baillie Gifford American & SMT type funds.
I do keep debating whether to sell it and take the money and go to "safer" equities like Terry Smith and Fundsmith.
Problem is every time I consider selling it keeps bloody going up
Safer in what way?I do keep debating whether to sell it and take the money and go to "safer" equities like Terry Smith and Fundsmith.
Problem is every time I consider selling it keeps bloody going up
BarryGibb said:
Safer in what way?
That's the dilemma.Insulin providers and toothpaste makers v electric vehicles and internet connected cycles.
It's hard to articulate but I look at what those two funds have done this past year and it feels unnatural that they can continue to do that.
But look at the charts and ask how many times you'd have said the same last year.
bhstewie said:
hstewie said: That's the dilemma.
Insulin providers and toothpaste makers v electric vehicles and internet connected cycles.
It's hard to articulate but I look at what those two funds have done this past year and it feels unnatural that they can continue to do that.
But look at the charts and ask how many times you'd have said the same last year.
Bailie Gifford holds a lot of Tesla doesn't it? How concentrated has the overall performance been on selected holdings like this? It's been a great ride for those who've been in it, but i'm not sure how long it can be maintained for.Insulin providers and toothpaste makers v electric vehicles and internet connected cycles.
It's hard to articulate but I look at what those two funds have done this past year and it feels unnatural that they can continue to do that.
But look at the charts and ask how many times you'd have said the same last year.
shopper150 said:
It seems to me that property in and around London is a very good investment, as it has been for decades.
Interest rates will remain low, it's seems like an absolute no brainer.
It's a difficult one. Yield is lower than the FTSE and upside, post Covid, is hard to judge. It could go stagnant as people exit in slightly elevated numbers and slightly fewer people migrate from the regions as they discover they can work remotely. It could fall quite a bit if employers have realised they don't need 100 expensive workers as during the Covid period they've seen that it's just the usual ten people doing all the work and generating the revenue that pays for the other 90 to sit in Facebook all day. Or, it could rocket as 8bn people living outside of the UK realise that they don't want to be in their country when the next Covid style event happens but prefer to be in London. Interest rates will remain low, it's seems like an absolute no brainer.
And on top of that there is the risk of unplanned bills, unpaid rent and all the other stuff.
I always feel with property it seems to make more sense when you don't have the money to create a good investment portfolio as you can borrow heavily for property to compensate or it makes sense as a diversification once you e maxed pensions and ISAs etc. In that middle area the risk element makes it a harder call.
Personally, for resi property, I think I'd favour the parts of the UK where the govt have said they will pump money and where the next govt will have to to buy votes. Afterall, no one is going to cry if London values fall and there won't be the same kind of political pressure to bail them out either.
It's just really hard to consider anything other than blue chip equities even if we do think they are over valued and looking unsustainable.
egomeister said:
Bailie Gifford holds a lot of Tesla doesn't it? How concentrated has the overall performance been on selected holdings like this? It's been a great ride for those who've been in it, but i'm not sure how long it can be maintained for.
Depends what you call a lot I guess.About 8% across those two and of course they're part of a more widely diversified set of funds.
Like I said pick a point when you'd have got out and look to the right of that point
shopper150 said:
It seems to me that property in and around London is a very good investment, as it has been for decades.
Interest rates will remain low, it's seems like an absolute no brainer.
As an investment property is a great way to pay extra tax to HMRC. Interest rates will remain low, it's seems like an absolute no brainer.
Income tax on the money you need for a deposit.
Additional stamp duty when you buy a 2nd property.
Income tax rates on any rental income - likely 40/45% for someone buying in the London area.
Capital gains when you sell it.
Compared with an ISA or pension investment then I don't see property being very efficient, and neither is it liquid if you want to change your exposure. That is before we come to difficult tenants, letting agents fees, repairs and upgrades.
London property HAS been good for the last 20 years, mainly through unrealised capital gains. Turning that paper profit into cash in the bank doesn't look so rosy.
DonkeyApple said:
shopper150 said:
It seems to me that property in and around London is a very good investment, as it has been for decades.
Interest rates will remain low, it's seems like an absolute no brainer.
It's a difficult one. Yield is lower than the FTSE and upside, post Covid, is hard to judge. It could go stagnant as people exit in slightly elevated numbers and slightly fewer people migrate from the regions as they discover they can work remotely. It could fall quite a bit if employers have realised they don't need 100 expensive workers as during the Covid period they've seen that it's just the usual ten people doing all the work and generating the revenue that pays for the other 90 to sit in Facebook all day. Or, it could rocket as 8bn people living outside of the UK realise that they don't want to be in their country when the next Covid style event happens but prefer to be in London. Interest rates will remain low, it's seems like an absolute no brainer.
And on top of that there is the risk of unplanned bills, unpaid rent and all the other stuff.
I always feel with property it seems to make more sense when you don't have the money to create a good investment portfolio as you can borrow heavily for property to compensate or it makes sense as a diversification once you e maxed pensions and ISAs etc. In that middle area the risk element makes it a harder call.
Personally, for resi property, I think I'd favour the parts of the UK where the govt have said they will pump money and where the next govt will have to to buy votes. Afterall, no one is going to cry if London values fall and there won't be the same kind of political pressure to bail them out either.
It's just really hard to consider anything other than blue chip equities even if we do think they are over valued and looking unsustainable.
bhstewie said:
hstewie said:BarryGibb said:
Safer in what way?
That's the dilemma.Insulin providers and toothpaste makers v electric vehicles and internet connected cycles.
It's hard to articulate but I look at what those two funds have done this past year and it feels unnatural that they can continue to do that.
But look at the charts and ask how many times you'd have said the same last year.
BarryGibb said:
If you really dig and press someone to confess what their actual net yields are, after ALL costs, London BTL stinks in general.
I would guess that for quite a few people it's ok as the property is something they bought a long time ago for themselves and they've since used the equity to buy home elsewhere etc?I'm sure there are pockets that work like HMO and looking around the short dated lease play seems to be returning and that's interesting. Lots of people have clearly bought flats on sub 100 year leases up to 30 years ago and spent the uplift on lifestyle and don't have the money to extend the lease so are having to sell. Seeing quite a few sub 50 year leases in nice areas now.
I have two flats in London and they tick over but they are for my children to use in due course or else I would never have got involved.
I'm also very suspicious re impending tax hikes to pay for Covid as they are almost certainly going to target property owners.
bhstewie said:
hstewie said:egomeister said:
Bailie Gifford holds a lot of Tesla doesn't it? How concentrated has the overall performance been on selected holdings like this? It's been a great ride for those who've been in it, but i'm not sure how long it can be maintained for.
Depends what you call a lot I guess.About 8% across those two and of course they're part of a more widely diversified set of funds.
Like I said pick a point when you'd have got out and look to the right of that point
Why dont we just start buying some put options. I looked and you can get 2 or 3 year expiry. Surely if everything is going to tank it must surely do so before 2 or 3 years is out. Or is that picking a top?
The other way to look at it is insurance right. Isn't that what put options are for - protecting your down side? So if you own a lot of over priced stock you sell put options right.
The strike price as to be ridiculously low to make it interesting. So do we say half of current prices?
FULL DISCLOSURE
I have never bought or sold any options but I'm wandering if its a valid play if we really do believe this is a massive bubble.
The other way to look at it is insurance right. Isn't that what put options are for - protecting your down side? So if you own a lot of over priced stock you sell put options right.
The strike price as to be ridiculously low to make it interesting. So do we say half of current prices?
FULL DISCLOSURE
I have never bought or sold any options but I'm wandering if its a valid play if we really do believe this is a massive bubble.
egomeister said:
I don't think that's quite what I meant. By the looks of it each of those funds has approx 9% in Tesla - how much of their outsize performance recently has been down to superstar performers like this, and what is the rest of their fund doing? Is all the gain actually just from buying a proxy of Tesla for example?
Ah sorry yes with you now.Interesting if you compare a few BG funds or trusts against comparable ones.
It's basically like a f
king great upward ramp happens to the BG ones around March 2020.Tesla is a huge part of that but I don't think it's just Tesla.
ATM said:
Why dont we just start buying some put options. I looked and you can get 2 or 3 year expiry. Surely if everything is going to tank it must surely do so before 2 or 3 years is out. Or is that picking a top?
The other way to look at it is insurance right. Isn't that what put options are for - protecting your down side? So if you own a lot of over priced stock you sell put options right.
The strike price as to be ridiculously low to make it interesting. So do we say half of current prices?
FULL DISCLOSURE
I have never bought or sold any options but I'm wandering if its a valid play if we really do believe this is a massive bubble.
Perfectly valid. It's about choosing the right option, right time period and size for the hedge that you want. The other way to look at it is insurance right. Isn't that what put options are for - protecting your down side? So if you own a lot of over priced stock you sell put options right.
The strike price as to be ridiculously low to make it interesting. So do we say half of current prices?
FULL DISCLOSURE
I have never bought or sold any options but I'm wandering if its a valid play if we really do believe this is a massive bubble.
Can I add a small question (if that’s possible given the subject). I have two daughters, 4 and 6. Both with cash isa’s doing bugger all. Through a habit of divorce they have 4 set of grandparents who put money in as well as out our own monthly contribution.
I’m at the very beginning of learning more about investments and I wondered about moving them to a shares ISA and either getting them in a simple ftse 250 tracker fun or perhaps something in the ESG field. Obviously I’m looking at the lower end of risk, but running the numbers both would have around £25k at 21, not awful amount, but I would prefer that to be higher.
Seeing the title of this thread, obviously makes me nervous, but this is a 15 year project. Any thoughts would be welcome.
Sorry probably sounds very simple but all new to me.
Many thanks
I’m at the very beginning of learning more about investments and I wondered about moving them to a shares ISA and either getting them in a simple ftse 250 tracker fun or perhaps something in the ESG field. Obviously I’m looking at the lower end of risk, but running the numbers both would have around £25k at 21, not awful amount, but I would prefer that to be higher.
Seeing the title of this thread, obviously makes me nervous, but this is a 15 year project. Any thoughts would be welcome.
Sorry probably sounds very simple but all new to me.
Many thanks
Stan hyd said:
Can I add a small question (if that’s possible given the subject). I have two daughters, 4 and 6. Both with cash isa’s doing bugger all. Through a habit of divorce they have 4 set of grandparents who put money in as well as out our own monthly contribution.
I’m at the very beginning of learning more about investments and I wondered about moving them to a shares ISA and either getting them in a simple ftse 250 tracker fun or perhaps something in the ESG field. Obviously I’m looking at the lower end of risk, but running the numbers both would have around £25k at 21, not awful amount, but I would prefer that to be higher.
Seeing the title of this thread, obviously makes me nervous, but this is a 15 year project. Any thoughts would be welcome.
Sorry probably sounds very simple but all new to me.
Many thanks
Global tracker is simple and set & forget.I’m at the very beginning of learning more about investments and I wondered about moving them to a shares ISA and either getting them in a simple ftse 250 tracker fun or perhaps something in the ESG field. Obviously I’m looking at the lower end of risk, but running the numbers both would have around £25k at 21, not awful amount, but I would prefer that to be higher.
Seeing the title of this thread, obviously makes me nervous, but this is a 15 year project. Any thoughts would be welcome.
Sorry probably sounds very simple but all new to me.
Many thanks
Depends how much you want to fiddle and monitor IMO.
I don't know about Junior ISAs v regular ISA's but make sure you invest inside a tax wrapper.
clubsport said:
I've no idea where you get that % from...
There are plenty of options strategies you can use to hedge a position or portfolio, is that gambling as such?
e.g. If you owned a stock or long an index position and considered selling it, you could sell a call taking in the premium on the option.
If the market fell you still had the position and the option premium, to cover some of the lost value.
If the market went up and the call was exercised, you would be taken out of your position at the strike price, you were considering selling anyway and keep the premium.
All investments have an element of opportunity cost, I don't think it is right to suggest they are outright gambling, if you are educated on such matters?
Yes the theory is quite sound. But how many people who trade options on IG are really managing risk in an organised way? It's easy to rationalise away your motives with valid theory. It's not so easy to overcome temptation to expand. All I'm saying, it's' something to keep in mind. There are plenty of options strategies you can use to hedge a position or portfolio, is that gambling as such?
e.g. If you owned a stock or long an index position and considered selling it, you could sell a call taking in the premium on the option.
If the market fell you still had the position and the option premium, to cover some of the lost value.
If the market went up and the call was exercised, you would be taken out of your position at the strike price, you were considering selling anyway and keep the premium.
All investments have an element of opportunity cost, I don't think it is right to suggest they are outright gambling, if you are educated on such matters?
Education also is only part of it. Many advise others by the book and still make the same bias led mistakes privately.
Edited by Lim on Monday 18th January 15:08
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