Protecting your money

jfpeeps

I have about 40k Sterling (cash) and 40K Sterling in mainly US stocks (hedge fund)

I am very worried about protecting this over the next few years, my aim is to buy a house when the market bottoms but am seeing my deposit shrink (mainly the shares at the mo) very fast. It took a long time to put this together and I don't want to have to start again!

Should I pull the hedge fund and put it somewhere else? or keep it where it is -50% and hope that it can't get much worse and ride it out. Will it ever ride out!

The cash is with HSBC and is earning almost no interest, I am more worried about it losing value due to inflation or whatever rather than actually earing money on it. I just want to come out of this with as close to my original value as possible.

gozomark

easy - sell the hedge fund - your risk appetite clearly isn't enough for you to be in investments, and your time horizon too short

dunstonh

You are in a high risk, high reward investment with half the money and you dont appear to have the risk profile to go with that.

jfpeeps

The hedge is so low it is painful to sell at this level, I could probably just use the cash for the deposit if it was protected. Do you think the shares are that long term for a recovery, I know it will be a year+ but more than that? I know I should probably just cut my losses but 50% that hurts!

gozomark

do you mean you invested 40K or its now worth 40K ?

what sort of hedge fund is it ? why has it gone down so much ?

depending on the type, it may not benefit from a recovery in the market anyway

jfpeeps

It is a "long term growth" hedge fund managed by a US firm. PRGFX it it's ticker.

It is 40K now

I don't like the hedge but need a good reason to jump at this low point.

I think I should

Cash hedge fund in it and split it my self over 10 large companies in different sectors.
Take the cash and split it between Gold and Index linked bonds.

Thanks for all your comments!

gozomark

PRGFX isn't a hedge fund, its a large cap US equity fund

I don't like the hedge (fund) - why don't you like it ?

Fund Summary

The investment seeks long-term growth of capital; income is secondary. The fund normally invests at least 80% of assets in the common stocks of a diversified group of growth companies. It mostly seeks investments in companies that have the ability to pay increasing dividends through strong cash flow. The fund generally looks for companies with an above-average rate of earnings growth and a lucrative niche in the economy. While it invests most assets in U.S. common stocks, the fund may also purchase other securities including foreign stocks, futures, and options.

gozomark

what happens if the gold price halves between now and when you want to buy a house ?

jfpeeps

Ok but it is 90% US stocks, not sure of the difference or how relevent that is in my situation. It's growth has not been good and income is non existant. My point is jump ship at this low point or ride it out. Plus what to do to protect the cash in GBP.

Thanks!

jfpeeps

<--- gozomark

Well my current investment has halved (well the stocks), any ideas what may not? I do not pretend to be an expert of any kind, that is why I am asking advise. If you think gold is bad I will take that under advisment, I do know that gold will be worth somthing. My present holdings are all paper.

gozomark

I'm not saying gold (or any other investment) will halve, I'm just saying they might, and if they did, what would be the implications for you and your house purchase ? why are you taking this risk ?

any ideas what may not? - cash