long term investment

gadgetmind

I agree regards the absolute return fund. I mainly use ITs for this function, but do also hold some Ruffer Total Return, however it's a slightly different animal.

http://www.ruffer.co.uk/cmsfiles/reports/RTRF_Monthly_report.pdf

I'm also very cautious about anything that calls itself "high income" particularly when someone is investing for the long term rather than needing income "now, dammit!". They generate the income by investing in high-yield bonds (which carry more risk), companies paying high dividends (which usually aren't those likely to grow rapidly) and in some cases, by burning capital to pay the income.

You also need to bear in mind that many property funds/companies will tend to correlate quite strongly with equities, which might not be what you intended.

Linton

I partially agree with gadget on the high income side - you do need to investigate how your chosen funds achieve their high income. Looking up the AXA fund, it's actually in the High Yield Sterling sector (which is a bit odd in that it seems to invest significantly in $ investments) and invests entirely in higher risk corporate bonds.

These tend to be rather correlated with equity as in the bad times it's the higher risk companies that normally go to the wall.

huwgus

thanks for the replies.
wasn't entirely sure about the absolute return myself. will possibly replace this with some US (possibly Legg Mason small companies) and reduce the high income ones

dreem

Put a 10% foundation of gold under your portfolio is probably good advice - If you could buy silver at a pre-VAT price then I think long term you may do well...

Linton

MrInvestor wrote: »

Some have increased in value and almost as many have decreased in value. Certainly on the whole, not enough money has been made to counter the rate of inflation. However 2 years is only a short - medium time investment.

Mine have averaged over 7% annually in the past 2 years, a FTSE100 tracker would have had a similar return. Its a short time, but that's the time during which you claimed that shares had dropped in value.

MrMalkin

But gold isn't necessarily even a very good hedge against inflation. For long periods gold has declined in real terms, for example during much of the 80s gold declined in nominal terms, never mind real terms, whilst inflation went on its merry way.

You're better placed to deal with inflation using index-linked bonds, or even a portfolio of stocks from companies with a proven track record of growing earnings, or the suggestions in this article.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aF1zfwwrcA2w

Let me guess, by 'top economists and private investors' you mean Austrian "economists" (because of all of that voodoo science they above all deserve the air quotes) and Ron Paul?

lvader

MrInvestor wrote: »

I stated that a lot of investors claimed that gold was at an all time high and it was a bad investment. A number of these same people generally made a loss, however I averaged 30% increase in value in the same period. They called me foolish at the time but who made the better investment over those 2 years?

.

I'm one of the people saying that gold was due a drop and that it was a bad time to buy. (Gold over $1800)

I sold my gold at the peak, bought shares when the FTSE was around 5000 and made another 20% profit.

sabretoothtigger

MrInvestor wrote: »

How do I find pre-VAT silver? I have heard about it. Doesn't it apply to silver coins made before a certain year?

Buy it second hand and near spot price

Let me guess, by 'top economists and private investors' you mean Austrian "economists" (because of all of that voodoo science they above all deserve the air quotes) and Ron Paul?

You got that upside down. They are not scientists precisely because they make an appeal to common sense.
The guys juggling QE are using complex equations and voodoo logic to justify raising debt above the level of the entire countrys annual production.

The Austrian argument is too much debt is as bad as it sounds, ie:

But gold isn't necessarily even a very good hedge against inflation. For long periods gold has declined in real terms, for example during much of the 80s gold declined in nominal terms, never mind real terms, whilst inflation went on its merry way.

You're better placed to deal with inflation using index-linked bonds

Buying at the peak and saying its a bad idea is a biased self referecing argument. Tech was a terrible buy from 2000 yet we use it everyday, its actually a great investment
Gold has for thousands of years roughly followed prices of goods, there is no gain either. Bonds have a counter party risk and right now are the highest prices for 30 years. Whichever one, buy it regularly not just once.

MrMalkin

sabretoothtigger wrote: »

The Austrian argument is too much debt is as bad as it sounds, ie:

The Austrian argument is therefore terrible because households can't print money or raise their income at will, both of which are options available to governments.

sabretoothtigger wrote: »

Buying at the peak and saying its a bad idea is a biased self referecing argument.

Where did I talk about buying at peak? Gold declined for most of the 80s and most of the 90s. That's a 20 year period where gold failed to keep pace with inflation, so even investors who bought gold years after the peak got no protection.

sabretoothtigger

Warren Buffet in a recent interview - Given the choice of 100m in paper money or gold which would you rather have? WB - I really dont like paper money I prefer assets but I really wouldnt buy gold I would buy something productive like a farm

I think thats about as close to an endorsement or warning as he is going to give

Where did I talk about buying at peak? Gold declined for most of the 80s and most of the 90s.

Gold peaked in the eighties so yes... :laugh: If you want to include the seventies that'd be less biased
I'll get the figures in a sec but buying gold regularly should have shown a 'profit' by now even after then.
Probably the same stands for technology where most of it is half the price of the peak still