long term investment

brasso

MrInvestor wrote: »

I like to base my investments on the predictions of some of the top proven economists and investment experts in the world.

You crack me up. You really crack me up.

gadgetmind

MrInvestor wrote: »

I purchased most of my gold bullion 2 years ago. At the time a number of people told me it would be mistake because gold was at an all time high. Yet 2 years later, the value of my gold has increased by about 60%. Whilst their stocks and shares have dropped yet further in value.

I hold some gold via PNL and it's done very well, but my equities have also had a decent couple of years as have my bonds. (I did reduce bonds too early, but I can live with that.)

Investment 101: hold a wide variety of assets.

brasso

I don't think anyone is saying you should never buy gold. But sinking 60% of your capital into one single investment -- gold or anything else -- is NOT something you will be taught at 'Investment School'.

You sum it up nicely:

MrInvestor wrote: »

Fool? Sure. Sounds very foolish.

gadgetmind

brasso wrote: »

sinking 60% of your capital into one single investment

The guys at Personal Assets Trust elucidate their views on gold very well, and they are holding so much that you can probably see it from orbit.

http://www.patplc.co.uk/secure/documents/quarterly/63.pdf

My attitude is to never hold gold because you love it, but to hold *some* gold even though you hate it.

When PNL start selling their gold, we'll know things have changed.

brasso

gadgetmind wrote: »

The guys at Personal Assets Trust elucidate their views on gold very well, and they are holding so much that you can probably see it from orbit.

http://www.patplc.co.uk/secure/documents/quarterly/63.pdf

My attitude is to never hold gold because you love it, but to hold *some* gold even though you hate it.

When PNL start selling their gold, we'll know things have changed.

Actually, that document is a very interesting insight into the gold mentality -- and nicely written too. By contrast with the strategy of the expert investor we have in our midst, they say:

Personal Assets’ investment in gold ― approximately 13% of shareholders’ funds at 31 October, or around £50 million worth ― has been very headline-grabbing."

Puts his 60% into perspective.

gadgetmind

brasso wrote: »

Actually, that document is a very interesting insight into the gold mentality -- and nicely written too.

I like reading the reports of PNL, RICA, RIT, and many more as they provide a great insight into the mindset of conviction investors. They don't pretend to know what's going to happen, and don't pretend they are going to blow the bloody doors off, but they do realise the key to making money long-term is not losing it short term.

Personal Assets’ investment in gold ― approximately 13% of shareholders’ funds at 31 October, or around £50 million worth ― has been very headline-grabbing."

Puts his 60% into perspective.

Yet, 13%, and PNL are seen as gold bugs.

Linton

MrInvestor wrote: »

Day 1, week 1 of investment school - 10% of your capital should always be invested in gold bullion. During times of financial crisis, astute investors shift a higher proportion of their capital into gold bullion.

.......

I purchased most of my gold bullion 2 years ago. At the time a number of people told me it would be mistake because gold was at an all time high. Yet 2 years later, the value of my gold has increased by about 60%. Whilst their stocks and shares have dropped yet further in value.

Fool? Sure. Sounds very foolish.

It is extremely dangerous to base your total investing strategy on what happened to work in the past 2 years. For example in the 2 years from 3/3/2009 the FTSE100 also rose by nearly 60%.

I guess you wont believe me now, but I promise you, you will in a year or two's time.

PS stocks and shares on average havent dropped in value over the past 2 years.

gadgetmind

MrInvestor wrote: »

If you knew anything about how investment companies are managed, you would appreciate that there are certain limitations on how much can be invested in certain areas.

Really? What the restrictions on (say) Personal Assets Trust?

For an investment company to invest 13% in one particular market, this actually shows incredible confidence in that area.

I suspect that you haven't read the report that I linked to. If you do, you'll see that PNL really don't have incredible confidence in gold.

huwgus

many thanks everyone for your advice/views. interesting how polarized some of the comments can be.
anyway, have now taken out a cash isa (more like 40% of original £10k)
and also a S/S isa with the following breakdown

axa global high income 10%
invesco perpetual high income 12%
first state global emerging market 15%
glg japan core alpha 12%
neptune european opportunities 8% (inc)
schroder global properties 8%
aberdeen asia and pacific 22%
legal and general dynamic bond 12%
old mutual uk smaller select 12%
investec enhanced natural resources 5%
jupiter absolute return 2%

any comments or advice on the above again are much appreciated

Linton

As a long term (10yr+) investment your range and allocation of sectors looks reasonable to me.

Couple of detailed points:
1) I dont see the purpose of the 2% in an Absolute Return fund. AR has been very much a mixed bag. Many of the funds havent really met their objective of providing return in good and bad times, some have been remarkably volatile. On the other hand one or two have done more or less what they were meant to (eg Newton). The Jupiter fund looks like it has only been running 2 years and so has not been exposed to anything really nasty.

So, either you have a good one, in which case it should surely form a core holding within the portfolio or you dont in which case you shouldnt have it at all.

2) I think an omission is the USA. Either Global Technology (which tends to be mainly US) or US Small Cap may fit in with your general strategy.