long term investment

lvader

I'd rather hold cash right now than gilts, it wasn't that long ago that any spare cash I had went into equities because they were so cheap. Now as I've taken some profits and other cash has become availabe I'm sitting on about 25% cash, just waiting for another buying opportunity.

gadgetmind

brasso wrote: »

When you've been lucky with an investment -- as we all have at various points

Yup, and knowing when to get out is more important than when to get in.

Even if you think gold is a good long term hold, then you might also perhaps accept it's a bit toppy right now?

I really, really, really want to be holding some IL gilts, but I'm not buying at current prices.

sabretoothtigger

MrInvestor wrote: »

Don't want to sound nit-picky, but isn't it 25,000% growth? Or did you mean 250 x growth?

Linton wrote: »

Lets be really nitpicky - isnt it 24900% growth?

Yes 250% would be £3.50 or £3.49

Best thing about savings would be the compound effect, so 7% is about 100% growth over 10 years or for the sovereign comparison, £2
1.07^100 to give 100 years, £867 or if I read it right this time - 86,771.6% growth
WB recently stated he has made 550,000% growth since 1964

Cash is no where near to giving 7% a year. I dont think it even manages 1% above inflation hence why gold at 250 seems so amazing.
250 is a bit less then 3% gain per year yet gold does absolutely nothing so we can conclude inflation has been about 3% since 1900 and unless savings on average earn more then that it is a waste of time and money
In the long run that is, I agree either could be good short term but gold is the winner long term I think and right now in troubles and 0% rates a well justified holding


The solution to this argument is to figure why cash pays any interest. Why does it so often fail to give a good return.
Right now I think supply and demand covers it, the BOE is issuing alot of liquidity to save harsh business cuts. Savers are not well rewarded because supply of money is very high

brasso

MrInvestor wrote: »

Oh bore off would you!! I never jumped on the house price band wagon. I even realised Gordon Brown was talking cr*p when he said that the UK was now recession proof about a decade ago.

It's not rocket science, you just have to look at the facts - and take the facts publicised in the UK with a pinch of salt because the news in the UK reports differently to the rest of the world.

Please can we just agree to disagree. Only time will tell who's predictions were correct, who's were wrong, and to what extent.

I didn't say you'd "jumped on the house price band wagon" and in fact most gold obsessives seem to be strongly anti-property market.

It is very very amusing though that the mindset that HPC types hate about the BTL-ers, is precisely the mindet that HPC types exhibit towards gold. "Its value can only ever go up".

We'll see.

sabretoothtigger

The value of gold never changes would be more accurate. 'The price can only go up' is a reference to inflation and politics favouring cheap money

Measure houses against rental costs and its more accurate

gadgetmind

brasso wrote: »

It is very very amusing though that the mindset that HPC types hate about the BTL-ers, is precisely the mindet that HPC types exhibit towards gold. "Its value can only ever go up".

I just don't understand this "single asset class above all others" mindset.

I own property, but always bought when prices were close to historical trends, and they still need to drop a bit to get back down there. I (indirectly) hold some gold and don't intend adding significantly at current prices. Equities and corporate bonds still have good yields even at current p/e (yield is more important to me than price, and I prefer the latter low!) so I'm still adding.

Investing is for the long term, so I think you need a long term view and to see how all the different asset classes have behaved across a number of market cycles.

lvader

Looking at the bubble comparison chart it looks like gold is 2 years away from a spike and crash, looks about right to me.

gadgetmind

Wow, loads of good arguments for gold not being in a bubble. It's clearly the "must have" asset class. Splendid!

Now, please excuse me while I sell even further and buy those unclean assets that no-one wants to touch.

I'm currently buying subordinated bank debt in countries that are hard to spell but have great scrabble scores.

I'm sure the Sunday papers will be plugging this as the great growth area some time soon.

I'll be elsewhere.

Using my greedy spork.

fairleads

Gold is insurance against currency depreciation. Some feel they need that insurance hence will pay over the odds for it. Others sense this and speculate in gold. However, gold is not an asset, assets produce income. If you really fancy gold, buy gold shares. If you feel worried about the current investment climate maintain a high cash allocation until the fog clears. If you feel inflation will take off then allocate more to equities. If you feel deflation is on us, or you are unsure of what to do, again, maintain a high cash allocation. Patience is a virtue.

John_Black

MrMalkin wrote: »

Your advice is terrible. What is it about precious metals that brings these mental people out of the woodwork?

I’ve been given the same advise for six years now; those who listened to it did well, those who didn’t are soon to discover what happens when you have exaggerated trust in paper money…