Good investment strategies for 2010?

guitarman001

After the pitiful less than 1% return on my Lloyds cash ISA, and with the hassle of changing provider for even more pitiful rates, I have decided to move all my monies into my iii S&S ISA.

During 2009 shares dipped big time and then made subsequent recoveries in general - anybody putting money in would have benefited greatly. I plan to do the same, with backups. Firstly I plan to place shorts in shares related to housing, as this is the biggest con of the last decade and prices must come down as I believe that even with government intervention (like in the last year), the prices are unsustainable and will crash - so shorting housing is on the cards for me. Any further ideas on this? e.g. who would you be shorting, using what instruments (spread-betting etc)? This is also in the interests of the younger generation (including myself) who cannot afford one of our most basic needs - a roof over our heads.

Secondly, I need a defensive role... I was thinking about buying INXG (index-linked gilts ETFs) but unlike going through NS&I, I believe if you buy these, your capital varies with it - is this correct? And also I don't think the gains will be that great. Any other ideas for protection of money in the form of an investment account?

C_Mababejive

Im no expert but ...

NSI&I index linked certs
Defensive essential stocks such as NG/CNA/VOD/NWG all pay good divs and can be had at fair prices at present.

Also for a good gamble on small caps VOG

turbobob

I would be wary of shorting anything in the current market. You are fighting against the prevailing trend IMO.

NS&I index linked certificates and index linked gilts are completely different. Gilts, which you can invest in through a S&S ISA are UK government debt securities. The NS&I product is a deposit account. The capital value of gilt funds can go up and down. In my ISA I have some of it in bond funds (not gilts at the moment) -for example M&G Strategic Corporate Bond to give some diversification away from equities and other things. To my knowledge its not possible to have "cash like" investments in a S&S ISA.

lvader

C_Mababejive wrote: »

Defensive essential stocks such as NG/CNA/VOD/NWG all pay good divs and cant be had at fair prices at present.

can't or can be had at fair prices??

amcluesent

>Any further ideas on this?...This is also in the interests of the younger generation<

My honest view is you're making highly leveraged, high risk 'plays' with minimal investment experience and in the hope you can 'stick it to the man'. You're overwhelmingly likely to lose the lot.

purch

I need a defensive role... I was thinking about buying INXG (index-linked gilts ETFs)

Not particularly defensive.

Index Linkers are still currently priced to show much higher Inflationary expectations, than the current actual levels.

They are pretty expensive, and will require a spike in Inflation to be good value.

sabretoothtigger

Firstly I plan to place shorts in shares related to housing,

Short can just mean 'I sold' and can just mean you are avoiding that market. So you've sold your housing shares and have no holding there.
Compared to the ftse-all share your balance would be short of any housing so your performance changes also

If you meant to go short further from there, it means you want to borrow someones money basically so you can gamble the shares wont rise further

thats not an investment strategy really, unless your portfolio is 1 million large I wouldnt bother actually borrowing to sell even more housing shares, just excluding it means you are already short enough of them


Other ways you can go short in effect is to invest abroad. So if you sell sterling currency to buy korean stocks that to me is a kind of change of balance similar to being short and it doesnt involve borrowing money since you already owned the sterling you sold.

[So if you think korean currency will have lower inflation then sterling, you are in effect short sterling and will gain from this eventually as the exchange rate changes]



Or a couple years ago if you wanted to short the banks then maybe gold made sense. Debt deleveraging increases more solid forms of capital apparently.
Gold was already expensive then like gilts are now but it turned out the market still underestimated the risk in british currency as gold in sterling has risen more also dollars.
So if inflation goes over 10% then I guess index gilts are underestimating though Im not sure just how 'inflated' the price is, I'm personally not tempted as shares will rise with inflation eventually


In australian dollars gold fell in price so I think a pacific tracker regular investment is my favourite safe but adventurous investment and it wont hold any uk housing stocks, though everything has some influence it will be pretty distant

C_Mababejive

lvader wrote: »

can't or can be had at fair prices??

Sorry...can !

Jonathan_Devine

There are some great ETF Funds that you should look at. Given your risk profile I would suggest you forget about leveraged ETF's for now, as they do carry more risk. However there are some terrific diversified exchange traded funds available that can help you build your portfolio.

tradetime

I can understand your feelings with regards to interest rates, and the performance of your savings and I am sure most people feel the same way.
I would caution however, unless you are a proficient trader, ie someone who has already demonstrated to themselves that they can consistently make a profit timing the market, then I would avoid the use of short selling, it tends not to be as straight forward as it might appear. Also I would recommend avoiding any sort of leverage until proficient in market timing, whilst leverage is a great tool to enhance profits, it will also magnify mistakes, and benefits tend to deteriorate the longer you have to hold a leveraged position.
All in all take things slowly and take the time to fully understand how any product or strategy you might use can affect your performance, not only on the positive side, but also on the negative.

JamesU

Jonathan_Devine wrote: »

[STRIKE]There are some great ETF Funds that you should look at. Given your risk profile I would suggest you forget about leveraged ETF's for now, as they do carry more risk. However there are some terrific diversified exchange traded funds available that can help you build your portfolio.[/STRIKE]

GuitarMan, try to ignore this rep whose sales and company signatures were spammed out earlier this morning.

If you want a better feel on how to set up a diversified etf portfolio according to risk profiles, have a read of the link below instead. But note: INXG is no longer a cautious option in the present economic and political climate as already mentioned on the thread. Similarly, some more on a defensive stance with stategic bonds and funds, general reading and some current ideas on this also.

JamesU

http://www.investorschronicle.co.uk/Tips/default/TipsOfTheWeek/article/20080418/e553b59a-0d30-11dd-9279-0015171400aa/Ten-lazy-portfolios.jsp

http://www.investorschronicle.co.uk/InvestmentGuides/Funds/article/20100215/eedf794a-17cf-11df-b0bd-0015171400aa/On-the-defensive.jsp