How to safely invest £150K

pqrdef

getzegold wrote: »

The fundamental driver is the loss of faith in paper money

And yet bonds are also trading at silly prices, and not only the linkers, while property remains depressed. Which doesn't really look like the markets are in a blue funk about inflation. And why on earth would anybody who's worried about inflation be inclined to buy something as volatile as gold? Gold is only a safety play against Armageddon.

Aegis

getzegold wrote: »

Distort matters? charts don't distort,

Of course they do. If you look at a chart showing the nominal price over time and scale it right back so the trends are less apparent, that's a distortion. The chart I presented was in a much more appropriate scale and it compared the current trend with the last gold bubble rather than with one of an unrelated asset class in which both NAV and premiums are subject to volatility.

whereas vague unbacked claims of gold being a 'classic bubble' do. Does the gold chart look like a classic bubble to you?

Yes, it does. The real price of gold is currently over twice the long term value (i.e. in 2010 prices). Where has that additional value really come from? You yourself claimed that it's effectively sentiment, and that is exactly how bubbles form: when investment decisions are made based on sentiment rather than fundamentals.

Gold MIGHT stabilise at a much higher long term real price, but what I know about investments screams to me that this price rise is unsustainable because it is based almost entirely on negative opinion of other investment markets. As I mentioned, the inflation-adjusted price of gold has only spiked up like this once before in the last 50 years or so, and that ended with a loss of nearly 75% in real terms. I think the crash outcome is vastly more likely than the continuous ongoing growth that many people seem to think is going to happen.

blinko

i think the difference this time is

Dollars - the US is in alot of debt ok we dont expect her to default but in the unlikely we want to reduce our exposure

as above countries are diversifying currencies more euro and emerging market currencies are being considered

current voltatlity and uncertainty are still out ther and with a weakening dollar and see above gold is more attractive as a cuyrrency

but also to agree with previous poster it wont be a crash but a steady decline but this will only be when the banks decide to take profits, i just cant see what else would be able to initiate a price decrease unless of course economic data and growth become stabilised and clearer but this is doubtfuil

pqrdef

Well I've got two questions.

(1) The people who've been buying gold lately, are they really in it for the long term? Or are they watching the price like hawks, to pick the time to sell? What are their stop-losses set at?

(2) If a seller appears - perhaps even a short seller who hasn't been buying - is the threat of inflation enough to prop the price up? Or will we see a cascade of selling as the stop-losses kick in?

bendix

blinko wrote: »

i think the difference this time is

LMAO. The old 'It's different this time' line must be the most over-used cliche in investment history.

Here's a tip. It's NEVER different this time.

Linton

en8wall wrote: »

Hi
Following the recent death of a close relative I have approx £150k to invest. I'm 40, married with one young child and mortgage free.
I'm looking for advice on how to invest this money with little to no risk and ideally receive a monthly income although this is not essential as i work.
Any tips please?

To go back to the original question.....

With that amount of money and no immediate need to spend it, I would want to go into investments. I appreciate this may be worrying to start off with, so take it carefully.

Perhaps something like:

1) Spend some - eg good holiday, house improvements etc £10K

2) Ensure you have at least 6 months instant access cash available for emergencies - say £20K

3) Put 3 tranches of £30K in fixed rate cash - one for 1 year, one for 2 years and one for 3 years. In that way you will be having an annual stream of lump sums coming in which you may chose to put back into savings, to invest or to spend.

4) With most of your inheritance safe for the short and medium terms you can start to think about investing the remaining £30K for the long term (> 5 years). I would suggest a broad range of unit trusts.

Sign up to one of the online providers - I use Fidelity and iii, there are several others discussed in this forum. At this point you can buy, say 6 investments of £5K each.

These should be mostly safer ones eg bond and gilt funds, equity income (reinvested), conservatively managed funds etc. If you look on https://www.trustnet.com you can find funds that over the past 5 years have done moderately well in the good years and havent crashed too disastrously in the bad ones.

I would also put one £5K tranch in something riskier - perhaps emerging markets, SE asia, special situations or resources. You may have specialist knowledge from work which could guide you.

By the time your £30K fixed rate sums come in you should be in a better position to decide how to proceed.

blinko

pqrdef wrote: »

Well I've got two questions.

(1) The people who've been buying gold lately, are they really in it for the long term? Or are they watching the price like hawks, to pick the time to sell? What are their stop-losses set at?

(2) If a seller appears - perhaps even a short seller who hasn't been buying - is the threat of inflation enough to prop the price up? Or will we see a cascade of selling as the stop-losses kick in?

im one of those watching like a hawk, as before i dont expect it to crash but a steady decline, but again this will be based on news elsewhere OR investment banks taking profit/ increasing any short positiosn

LMAO. The old 'It's different this time' line must be the most over-used cliche in investment history.

Here's a tip. It's NEVER different this time.

i agree on this, but gold is a known quantity and so is the current economic movements of the government and there effects i do think gold will fall in value sometime, but i dont feel that time is yet i believe there is more momentum here i would wait and see the affect of QE2

although the affect of bonds on gold is something i havent fully looked at yet