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Uncorelated Assets
Comments
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So would gold and silver bullion that you buy privately and keep away from prying eyes count as uncorelated assets?
Gold can certainly play a part in a balanced portfolio, but not so much if stuck under the floorboards. The only gold I hold is via ITs such as Personal Assets Trust.They are certainly a protection against the power of the printing presses.
Yes, but so are productive assets that earn an income.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Perhaps the archetype for uncorrelated investments would be the Harry Browne Permanent Portfolio. This (US based) portfolio contains equal allocations to four elements: stocks, gold, long-term government bonds and cash.
Harry Browne argued that the portfolio mix would be profitable in all types of economic situations: growth stocks would prosper in expansionary markets, precious metals in inflationary markets, bonds in recessions and T-bills in depressions.
It has worked for the past 30 years but no telling if it will work in the future. Much discussion on the web about that.0 -
I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »If it were possible to do that in an ISA and/or SIPP, then I would be a happy man.
I'm currently avoiding gilts due to the asymmetric risk/reward situation, which is a decision that I'm not entirely comfortable with, to say the least!
So out of interest, if by some piece of magic, you had the required proportion of your portfolio in cash earning 4%-ish tax-free, you would forego any uncorrelated asset holdings in bonds, gilts, etc...?0 -
So out of interest, if by some piece of magic, you had the required proportion of your portfolio in cash earning 4%-ish tax-free, you would forego any uncorrelated asset holdings in bonds, gilts, etc...?
Corporate bonds tend to correlate too heavily with equities to really class as an uncorrelated asset. The main two others are gold and gilts, but I'm currently wary of both. This is probably more my failing than that of the Harry Browne approach!
I do have some cash ISAs earning 4%, and some NS&I linkers, but I still look at the balance of all of our S&S ISA and SIPP portfolios as individual pots as it's hard to rebalance between them. The same might be true of your unwrapped cash holdings - dunno.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
You could try an etf tracking commodity prices generally
This is (I think) a bit slug of oil price exposure, some food stuffs plus a little gold
It used to perform differently to equities, but the correlation went up a lot recently
I used one for several years as inflation protection and it worked very well for me, even as the equity market tanked, which is what it is supposed to do
I found it a bit easier to stomach than investing in gold (which I also used to do) because those other commodities actually have a useful purpose
(The only reason why I stopped was I realised a while ago that I could reach my retirement fund goal just by investing in index-linked gilts without any risk)0 -
gadgetmind wrote: »Yes, but so are productive assets that earn an income.
Assuming you manage to pick assets that keep producing an income that keeps up with inflation0 -
going back a bit, to the theory that a mix of shares (higher return) and bond/gilts (lower return) can perform at least as well as shares alone, because rebalancing means selling high and buying low ...
does that only work for fixed-rate bonds/gilts, or also for index-linked? because the inflation risk puts me off fixed-rate. it seems there can easily be several decades when real returns are much higher or much lower than average.
(and that's without trying to call the market. it's hard not to believe that fixed-rate bonds are somewhere near a long-term peak.)0 -
Assuming you manage to pick assets that keep producing an income that keeps up with inflation
True enough, but a good spread of equities and bonds has historically done that, and some more.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
grey_gym_sock wrote: »it's hard not to believe that fixed-rate bonds are somewhere near a long-term peak.
Not just fixed rate, but linkers too. The current yields are so low that by buying these you are agreeing to lose a little of your long-term buying power in exchange for hanging onto the rest. Quite some deal!I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
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