Printing Money

tradetime

bubblesmoney wrote: »

any suggestions on where to be investing spare cash for the risk averse and also for those willing for moderate risks. since quantitative easing will be decreasing the value of my cash assets. buying gold etc is cumbersome plus it is at historic highs and it is not exactly liquid.

any suggestions on low PE ratio companies that give a good dividend plus have a good outlook in the present climate, plus have reasonable market capitalisation etc to make them safer bets. just planning on hedging my savings against inflation that is bound to follow printing money.

Selecting investments is pretty challenging in the current market, probably even for those who do it regularly, there's just too much uncertainty. Until it becomes clear that the financial sector has got all of it's skeletons out of the cupboard then there is still substantial downside risk. Really for this sort of question you'd need a good IFA, who knows all the asset classes available, and how they historically perform in different environments, that way he can suggest a diverse range that performs best in the most likely outcomes of this crisis, sadly that's not me for the most part as long as the market is moving the direction is immaterial to me, though I have been tempted recently to experiment with some investments given that we have fallen so far..

The more I see and read, the less convinced I am where we will end up. Personally, investment wise, I am at the moment assuming that we somehow manage to escape deflation and at some point inflation rises rapidly, to that end I want to be in things that do well in an inflationary environment, so I am accumulating positions in commodities, such as oil, Nat gas, coal, and agriculture related commodities and stocks related to them, even in a deflationary environment they should hold up well. Gold, I had an entry point planned for the mid $600's, I think it got down as far as $700 and promptly reversed, so I missed that, will have another look at it in the new year. Also I think the western economies will undoubtedly emerge more damaged after this, and as such I am also building positions in Asian markets. Don't know anything about capital ratios, etc, I tend to avoid individual company stocks, preferring to use ETF's which give me diversification.

tradetime

Generali wrote: »

Diversification is your friend. I know that a lot of people disagree with me but I reckon the best thing to do is to invest in cheap trackers or ETFs, feed your money in month-by-month and look to hold for the long term.

The biggest problem is that everything seems to be screwed. Of the biggest 5 economies which would you choose to invest in.

US? Maybe on the basis that stocks are oversold but I don't think they are personally.
Germany? Possibly - they're likely to be amongst the first to recover as they sell so many 'capital goods' (things that are used to make other things), recovery looks a long way off right now though.
Japan? Nope. They're screwed by demographics. Screwed by not enough screwing if you like.
France? They must be due another revolution.
UK? Hahahahaha.

Quite honestly, I think the only thing you can do is diversify and hope for the best and try to console yourself with the thought that at least you've got your health.

LOL, you paint such a cheery picture G, does look gloomy doesn't it. I'm a fan of ETF's also. I like Asian countries, they won't be saddled with debt when this is all over, at least not to the extent that the west is, since they enter it as net creditors, also countries who are large natural resource producers.

Generali

tradetime wrote: »

LOL, you paint such a cheery picture G, does look gloomy doesn't it. I'm a fan of ETF's also. I like Asian countries, they won't be saddled with debt when this is all over, at least not to the extent that the west is, since they enter it as net creditors, also countries who are large natural resource producers.

Well I like to bring a little joy into everyone's lives at this time of year!

The trouble is it's a reasonable (if slightly tongue in cheek) summation of the situation.

I must say, Asia away from the demographic timebombs of China and Japan look pretty good to me longer term. Places like Vietnam, Malaysia, Singapore (esp Singapore). Aus is full of stuff that is being made in Vietnam.

tradetime

No knowledge of Vietnam, must look at it, Singapore, I like also. not sure what you mean by

the demographic timebombs of China and Japan

Away from Asia I like Brazil also

Generali

tradetime wrote: »

No knowledge of Vietnam, must look at it, Singapore, I like also. not sure what you mean by Away from Asia I like Brazil also

The Japanese population is set to fall by 20 million over the next 20 years. China will have big problems with unfunded healthcare liabilities as the single child policy catches up with them - in effect one child will be trying to support 2 parents.

tradetime

Generali wrote: »

The Japanese population is set to fall by 20 million over the next 20 years. China will have big problems with unfunded healthcare liabilities as the single child policy catches up with them - in effect one child will be trying to support 2 parents.

Ah, ok, interesting., those are longer term problems though, we'll likely have all killed each other before then I think China is still a viable play despite that, their water situation would be more of a worry, though they are spending heavily to solve that.

Generali

tradetime wrote: »

Ah, ok, interesting., those are longer term problems though, we'll likely have all killed each other before then I think China is still a viable play despite that, their water situation would be more of a worry, though they are spending heavily to solve that.

TBH, short term Singapore could be interesting. An island of calm in a sea of turmoil quite possibly.

Australia has a lot of personal debt but a very good fiscal situation. And again a good play as a stable place in an unstable world. It's the breadbasket of Asia which is a good position to be in. The water problem is starting to be seriously addressed too which has been a limiting factor.

tradetime

Generali wrote: »

TBH, short term Singapore could be interesting. An island of calm in a sea of turmoil quite possibly.

Australia has a lot of personal debt but a very good fiscal situation. And again a good play as a stable place in an unstable world. It's the breadbasket of Asia which is a good position to be in. The water problem is starting to be seriously addressed too which has been a limiting factor.

Yes I heard something about Australia having had a lot of HPI, don't know how true that is, or where I heard it, most likely Bloomberg. But they are a very resource rich country, and the current crisis will do nothing but good for the prospects of Natural resource prices once / if we get out of this mess.

Generali

tradetime wrote: »

Yes I heard something about Australia having had a lot of HPI, don't know how true that is, or where I heard it, most likely Bloomberg. But they are a very resource rich country, and the current crisis will do nothing but good for the prospects of Natural resource prices once / if we get out of this mess.

Aus has had a house price bubble comparable to that of the UK and clearly doesn't have the same pressures on land that the UK has as it has rather more realistic planning policies. Virtually everywhere has though. There was a piece a few years back in The Economist which pointed out that most countries had seen a rise of 90-100% in their house prices. They said that the UK, Burkina Faso, the Faroes, everywhere except Germany and Japan, had seen house price bubbles.

IveSeenTheLight

tradetime wrote: »

Just to cover what I said above, it's not always about yield. I don't trade bonds so I am not subscribed to a feed, but these are etf's that track them, I think you'll find the performance is the same.

Tradetime,
I appreciate the graphs, but please make sure they don't make the webpage go into horizontal scrolling.
It's such bad web page design.

I notice on imageshack, there is an option for a link to forums based pictures to help in this matter

Edit apolgies Sabretooth