Investing money during the recession.

bluey890

Where is the best place to place my savings? What sort of asset mix/split should I keep?

Bluey

dunstonh

Are you talking about savings or investments?

If investments, the asset/sector allocation will depend on your risk profile, time you will be investing form, what type of investments you will be using (e.g. unit trust, shares etc) and what investment strategy you are following.

a7man

loads of factors to take into account:

How much?
How long?
Risk?

for a start

bluey890

£50k.
Errmmm, 5 years, but able to get at it more quickly if required.
Medium to High Risk / Return.

Thanks.

a7man

Ok, this is very general and you will have to do a lot of the research yourself due to your own individual circumstances.

5 years is probably sufficient for returns from equities providing you are optimistic about the economic recovery, which I am - generally 10 years plus is ideal. You might also want to invest regularly rather than putting the whole amount in on one date, however volatility is much lower at present than the end of last year/ beginning of this year.

You will be looking at a high equity content for money you definitely wont touch for 5 years plus, with a proportion in emerging markets, Japan/far east & global areas. You may also look at UK smaller companies. The higher proportion in global/ em market areas the higher the risk.

Its worth putting some in commodities and any money you 'might' touch should be in lower risk investments such as fixed interest & bonds.

If you dont have an emergency fund of cash, this should be kept aside in a bank/ savings account.

As an example:

med-high risk is:

45% UK Eq
10% US
10% Japan
8% Em markets

the rest split in property, FI & Europe.

bluey890

a7man wrote: »

Ok, this is very general and you will have to do a lot of the research yourself due to your own individual circumstances.

5 years is probably sufficient for returns from equities providing you are optimistic about the economic recovery, which I am - generally 10 years plus is ideal. You might also want to invest regularly rather than putting the whole amount in on one date, however volatility is much lower at present than the end of last year/ beginning of this year.

You will be looking at a high equity content for money you definitely wont touch for 5 years plus, with a proportion in emerging markets, Japan/far east & global areas. You may also look at UK smaller companies. The higher proportion in global/ em market areas the higher the risk.

Its worth putting some in commodities and any money you 'might' touch should be in lower risk investments such as fixed interest & bonds.

If you dont have an emergency fund of cash, this should be kept aside in a bank/ savings account.

As an example:

med-high risk is:

45% UK Eq
10% US
10% Japan
8% Em markets

the rest split in property, FI & Europe.

Thanks!
Should I put any savings in gold? Or is it a case of having now 'missed the boat' and being likely to receive capital appreciation?

a7man

Gold has fallen pretty sharply recently. There are a lot of gold lovers on this forum and in the right circumstances it can be valuable addition to a portfolio, however when everyone else was pouring their money into gold the oil price was dropping towards $30 and I saw this as a much better inv opportuinity.

Gold can be useful as an investment during a recession, however it is also very volatile lately & I dont really know enough about it to give you an answer either way.

Generally, what everyone else is doing - you dont do.

Myrmidon_J

a7man wrote:

As an example:

med-high risk is:

45% UK Eq
10% US
10% Japan
8% Em markets

the rest split in property, FI & Europe.

Generally useful comments from 'a7man' - but not this (in my opinion).

73% exposure to equities (above), with the remainder "split in property, FI & Europe" is extremely high risk. Assuming that the 27% is divided equally across the asset classes listed, this means that just 9% of the portfolio is invested in defensive assets.

Typically, this split is associated with 'aggressive' investors with a timescale of ten years plus. I would certainly not recommend adopting such a strategy if you wish to "get at [your money] quickly if required."

I would also comment that in order to realistically consider investing in growth assets (equities, property, etc.), you would need to adopt a rolling five year timescale.

dunstonh

That is a very high risk spread on my scale as well. Obviously everyone has their own perception of risk and its often worth putting it in context to cash and how many grades you have on that scale. One persons cautious is another persons high risk.

Medium/high and I would expect to see around 1/3rd of it in non stockmarket investments. The rest of the comments by the OP dont suggest a high risk spread (just 5 years and accessibility required put you on guard).

sabretoothtigger

The way its written savings means it would all have to be aimed towards low risk I think. The lowest risk would be index linked savings but they pay 1% right now I think
http://www.nsandi.com/products/ilsc/isitrightforme.jsp


Equities through an entire index is less risky I reckon but still liable to loss unless you fed it in over 10 years then I reckon that would be close to positive.
However the ftse was 6,231.00 in June 1999 so maybe not, I would have to work out where the average was. This is why I prefer an emerging index over westerns

Kua

a7man wrote: »

Gold has fallen pretty sharply recently. There are a lot of gold lovers on this forum and in the right circumstances it can be valuable addition to a portfolio, however when everyone else was pouring their money into gold the oil price was dropping towards $30 and I saw this as a much better inv opportuinity.

Gold can be useful as an investment during a recession, however it is also very volatile lately & I dont really know enough about it to give you an answer either way.

Generally, what everyone else is doing - you dont do.

So, the million dollar question - How would you go about investing in gold?