FTSE 100 new 52 week high

Blacklight

Just an observation, 5891 at close of play today.

6000+ by the end of the year?

1984ReturnsForReal_2

That is good isn't it?

I bet it breaks 6000 by the end of the years also.


Followed 3-6 months later by a fall back to around 5250-5500.. When the suddenly realise they haven't solved the economy by tapping a few numbers into a machine & patting themselves on the back.....

chucky

so you're happy that we're going to have to pay more for shares by the end of the year than we did last month!!!

how is this a good thing... no wait...

chucknorris

chucky wrote: »

so you're happy that we're going to have to pay more for shares by the end of the year than we did last month!!!

how is this a good thing... no wait...

When it goes above 6500 (eventually) I am planning to divert my NEW stocks and shares Isa's into individual corporate bonds as I see limted upside. I plan to leave all my existing Isa's in place until it gets to about 7000/7500 then change them into an isa corporate bond.

Someone please feel free to criticise my plan as it's logic could do with being tested. I am trying to avoid just passively leaving it all in Ftse trackers and falling at the next crisis point (after this recession) by diverting it into bonds at some point.

Linton

chucknorris wrote: »

When it goes above 6500 (eventually) I am planning to divert my NEW stocks and shares Isa's into individual corporate bonds as I see limted upside. I plan to leave all my existing Isa's in place until it gets to about 7000/7500 then change them into an isa corporate bond.

Someone please feel free to criticise my plan as it's logic could do with being tested. I am trying to avoid just passively leaving it all in Ftse trackers and falling at the next crisis point (after this recession) by diverting it into bonds at some point.

Yes. Firstly would go into bond funds rather than individual bonds. Individual bonds can have quite high minimum purchases, I think are difficult to trade online, and you will need a reasponable number for safety's sake.

Secondly, bond fund prices have increased markedly (20%?) over the past couple of years as people have moved into them because savings returns are so low. When the current problems are over they could drop back to previous values. Whether this is before or after you start buying them might be significant to you.

But agree with not having all your fund in FTSE trackers. Have you looked at a balancing strategy whereby you start by putting say equal amounts into a FTSE tracker and something else that behaves differently, say a bond fund. Then when one rises significantly you move enough of the profits into the other fund to return to the previous balance. In this way you are selling when prices are relatively high and buying when prices are low. Much better than just waiting for a FTSE tracker (or a bond fund) to do something really worthwhile.

purch

Corporate Bonds are the biggest bubble since the last biggest bubble.

StevieJ

chucknorris wrote: »

When it goes above 6500 (eventually) I am planning to divert my NEW stocks and shares Isa's into individual corporate bonds as I see limted upside. I plan to leave all my existing Isa's in place until it gets to about 7000/7500 then change them into an isa corporate bond.

Someone please feel free to criticise my plan as it's logic could do with being tested. I am trying to avoid just passively leaving it all in Ftse trackers and falling at the next crisis point (after this recession) by diverting it into bonds at some point.

The problem is bonds have had a good time of it as well, so you could see a twin dip :eek: I think I prefer stocks on balance, or something like this.

http://www.artemisonline.co.uk/investor/products/artemis-strategic-assets

sabretoothtigger

Linton wrote: »

balancing strategy

Sounds good, think Ive read on that before. Bonds fund is my biggest recent holding, not really waiting for 6000 mark


Bonds might be a bubble but bubbles are the trend nowadays. This time last year soros said gold was a bubble, he is probably right.

Depends how you measure it and invest in each sector. I think gold mines are in less of a bubble and more deserving of investment for future return, raw commoditys are always bubbling up and down thats their nature

For bonds again I think it depends which one. government is a disaster area it would appear but theres a massive variety before even coming to company debt.
Microsoft borrowed money for 3 years at less then 1% I think it was. Pointless lending to them, why do they even need to borrow, they generate billions in free cashflow

So who needs to borrow now and is actually going to give the best returns in 5 years. Whose poor and will be exponentially richer for the investment because its criminal if they dont have the money it will make such a difference to their ability to generate earnings.
Bonds could be good, takes some skill like anything I guess

chucknorris

Thanks for the replies guys I'll get round to specific replies tomorrow as I haven't time tonight.

The reason I want to go into an individual bond rather than funds is because I want certainty of return. So I want to purchase something like (for example) the Tesco corporate bond with 19 years to run and hold it in an isa until it matures. All I would want is the approx 5.3% (tax free) return as this is equivalent to 8.8% gross. I have made my money now, all I am trying to do is put it in places that attract a reasonable return rather than seek greater returns. I don't like the idea of bond funds because I do not know what they will pay, I really like the idea that if I hold an individual bond to maturity I know what I am getting. Although of course I would be taking the risk of long term interest rates rising and making the 8.8% look poor. Is that the only downside?

chucknorris

purch wrote: »

Corporate Bonds are the biggest bubble since the last biggest bubble.

I don't really understand how it could be a bubble for example if I buy say a tesco corporate bond and hold it to maturity (unless Tesco goes bust) am I not guaranteed to recieve the coupon interest rate annually and after the 19 years or so full redemption (at the £100 price)?

I am not interested at all in bond funds, only individual corporate bonds.

Someone said you have to purchase a lot, would 70k be enough? Or would that be too small. I thought the stock market's retail bond had been started to address this exact point of allowing lower investments.

purch

I am not interested at all in bond funds, only individual corporate bonds

Sure.

An individual Bond bought with the intention of holding to maturity, could not be called/referred to a bubble.

A Bond Fund has no maturity, so in many ways it loses the one single factor that gives a Bond a low risk rating. Maturity.

As a fund does not mature, but holds Bonds with a multitude of maturities it is always open to volatility.

A single Bond, held to maturity does not have that.

You can just sit back, watch the coupons roll in and wonder at the marvels of compound interest.

P.S. There are numerous other 'risks' involved in this strategy, but volatility and changes in the capital value are not those.