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Interest rates so low - don't bother saving!
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If you diversify enough, you can near-guarantee that the gains will cancel out the losses. Or to put it another way, the losses will cancel out the gains.
Can't have it all ways.
If the losses cancel out the gains then you are implying that the net return is zero and you get your original stake back.
From my understanding of gambling that certainly isn't the case. On the one occasion I did the lottery they didnt give my quid back when I didn't win the jackpot so I still can't see how investing is gambling.Remember the saying: if it looks too good to be true it almost certainly is.0 -
I agree, more like Premium bonds than true gambling.
I say cash only savers are gambling as well with shortfall and inflation. In a premium bonds way perhaps? As your original stake is returned intact (if worth less than the day you invested it)
Premium bonds are a bit like cash, in that I think it is a fine idea to hold a few (i hold 100 quid's worth) but not a good idea to have 100% of your money in them. I don't think it is a good idea to have 100% of your money in anything really.0 -
Capitalism depends on exploitation of cheap labour, but those days are going.Global capitalism depends on it.
Should I buy gilts then? Are they a low-risk investment?Unless the UK economy crashes catastrophically gilts wont "crash" in any real sense, they will revert to around par. Say a drop of 30% or so at most, guaranteed by their redemption at par on maturity.
But in those cases, I know why. I know what could stop those things happening, and how likely it is.You act on the basis that the sun will rise in the morning. You turn on a tap without worrying too much whether water will come out. You assume that your employer will continue to pay your wages. etc etc.
Unfortunately it's too late now for us to take advantage of the last 25 years.The returns from investments have greatly exceeded anything I could have got from cash savings for the past 25 years"It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
Quite the reverse. The cash saver can be relatively certain of the least he'll end up with. The price of trying to get more is that you run a distinctly greater risk of ending up with not enough. Ask the people who went for endowment mortgages.grey_gym_sock wrote: »most obviously, cash has more shortfall risk.
So long as you remember that the nominal gain is only inflation, not real profit.grey_gym_sock wrote: »there is a kind of built-in inflation proofing in any investment in real assets, and equities (excluding cash shells) do mostly represent real assets"It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
Quite the reverse. The cash saver can be relatively certain of the least he'll end up with.
no, that's only in the short term. in the long term, it's is blatantly false due to inflation risk.
one has no idea what the least real value one will end up with from cash over 20+ years.
one has no idea what the least real value from a balanced portfolio of investments will be over 20+ years will be, either. but it is likely to be higher than on cash. because investments give a higher return on average.
are you continuing to deny that there's any reason to expect a higher return from investments on average? (i gave some reasons in another post.)
the ppl who used them in a sensible way had no problem. sensible meaning not assuming that the next 25 years will be exactly like the previous 25. and taking an endowment whose minimum payout would cover the mortgage.The price of trying to get more is that you run a distinctly greater risk of ending up with not enough. Ask the people who went for endowment mortgages.0 -
grey_gym_sock wrote: »the ppl who used them in a sensible way had no problem.
I took one out in the late 80s and flogged it on the secondary market in the mid 90s at a rather pleasing profit.
As you can't time the market, this is of course down to pure luck.
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 protect cash from inflaton by capitalising part of the interest. If you can't get a high enough interesr rate, or an index-linked product, or a foreign currency, you may have to put up with a negative real return. But there are limits to that if the Bank doesn't want a mass flight from sterling to foreign currency.grey_gym_sock wrote: »no, that's only in the short term. in the long term, it's is blatantly false due to inflation risk.
Well there's an easy way to make a fortune. If you happen to know which investments will be average.grey_gym_sock wrote: »are you continuing to deny that there's any reason to expect a higher return from investments on average?
Can't understand why the banks are so reluctant to pay decent rates to savers if they can just stick all the money in trackers.
You didn't mention that some of those taking the residual risk end up bust.grey_gym_sock wrote: »(i gave some reasons in another post.)"It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
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Y
Can't understand why the banks are so reluctant to pay decent rates to savers if they can just stick all the money in trackers.
Well, that is kind of how many Investment Trusts work but it's only possible because they are close-ended funds. Banks need to be able to repay money on demand so can't do this.Unfortunately it's too late now for us to take advantage of the last 25 years.
No, it isn't as we can use lessons from the past to guide our future actions.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 -
How could lessons from the past have predicted the printing of £375bn?gadgetmind wrote: »No, it isn't as we can use lessons from the past to guide our future actions.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0
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