FTSE 100 Kick out plan

chucknorris

LeeSouthEast wrote: »

5 year fix seems sensible here. Why gamble it all (interest) on the stock market when in 5 years who knows what it'll do...

Although I have put some money into BM's 5 year bond at 5.15% I think there is good reason to take a risk (gamble) on the stock market because after 40% tax that rate is reduced to a mere 3.09%. So I recently bought a non ISA tracker (already used my ISA allowance), it doesn't have to perform all that well to beat 3.09% and as long as you cash it in with your profit within your CGT allowance it will be tax free.

I'm not saying risk all your capital just a sensible proportion currently my cash/stocks ratio is 80% cash 20% stocks so I might need to still further adress that ratio.

Does anyone think it might be worth investing into a bond fund, or have I missed that boat now. The problem I have with a bond fund is that it appears in normal interest rate periods they pay no more than the highest savings rates (or am I wrong?) obviously they do at the moment but the 'initial' and 'switch' charges are not cheap. so it does not seem value to take out a bond for what might be only a few years.

cashbackproblems

gozomark wrote: »

I agree with what you say. Unfortunately you as a shareholder might well have been wiped out by nationalisation in the meantime

Come off it does anyone really think the banks will ever be fully nationalised?? The govts want their money back WITH profits and with an election coming it will allow them to say theyv actually given something back to taxpayers, so its in their interests to have a profitable banking system and they realise the banks will run better themselves with better regulations.

http://www.agentcities.net/2009/02/18/lloyds-will-not-be-nationalised/

gozomark

cashbackproblems wrote: »

Come off it does anyone really think the banks will ever be fully nationalised??

You make it sound as though the govt wants to nationalise the banks - they don't but they maybe forced into doing so. From the article you link to "the government does not intend to nationalise Lloyds bank." Exactly, they don't want to.

The analyst in post 19 puts the risk of nationalisation at 25-30%. I think thats a little high, but its not a negligible risk.

Even if not nationalised, there is a further risk of massive dilution if the govt had to rescue a bank and did so through the issue of shares

Finally, Northern Rock was nationalised.

cashbackproblems

Northern Rock is a different case, they are much smaller and had a deeper debts with other banks who they have borrowed off, so if they had been allowed to go under impacts upon the financial system would have been huge, lbg and rbs this isnt the case. Lloyds real problem is HBOS which is whats dragging them down as they overpaid for them and took on hbos's debts, soon as they are able to sell it off/get it profitable they would the bank id invest into.

OP- If you dont want the uncertaintly and are prepared to sacrifice some rewards, put it all into Barclays.

Richard_DandR

I suspect THIS GUY may have done "a bit of research" and he thinks there is still a significant risk that LBG and/or RBS may be nationalised.

Personally I think he's wrong but he's vastly more experience than me (or you, I'm guessing?).

You can hear his views on the markets (recorded in June so a bit behind the times now). The webcast lasts 11 minutes.

http://investor.invescoperpetual.co.uk/portal/site/ipinvestor/specialfeatures/focusfunds/highincomefund/fundmanagerviews/