Interest Rates

jimjames

I'd agree with the HL article.

As it stands at the moment I can see very little likelihood of rates rising in the near term and the suggestions of a further 3+ years at current rates seems perfectly feasible.

In terms of other options I'd be very wary about dismissing all stock market investments based on a few "dodgy shares". I hope they were part of a balanced portfolio so that any losses on those were covered by gains on the rest. 6%+ since start of year for the FTSE and 20% for funds outside UK.

Not suggesting that is regular but making judgement on the worldwide market on the basis of a bad stock selection seems to be cutting off your nose to spite your face. Even dividends of 6% are possible so 10% is not beyond reach but the key is a balanced portfolio.

marathon_man_3

The government are proud that they are keeping interest rates low despite that, traditionally, there are about 7 savers to every borrower.
If/when interst rates start to rise there is going to be an awful lot of mortgagees, already in or close to being in negative equity, who are going to howl very loudly whereas us savers seem to have no influence right now.

guitarman001

The ONLY sort of share investment I'd consider now is ONE Vanguard fund, and that's it.

talexuser

Just look at the growth figures, triple dip recession likely, loss of AAA likely, deficit reduction way off track, bigger cuts to come with no rise in real income spend. The article is right, 3 or more years of 0.5% base (some are even predicting 0.25 for all the good it will do) and a v-e-r-y slow rise thereafter. The housing bubble will take years to unravel without large negative equity shocks, or banks going actually rather than hidden bust.

C_Mababejive

marathon_man wrote: »

The government are proud that they are keeping interest rates low despite that, traditionally, there are about 7 savers to every borrower.
If/when interst rates start to rise there is going to be an awful lot of mortgagees, already in or close to being in negative equity, who are going to howl very loudly whereas us savers seem to have no influence right now.

But thats where you are wrong.

The problem with too many savers is that they are apathetic. They are quite content to keep money in rubbish savings products,being shafted and being amde to underwrite losses which have !!!!!! all to do with them !

If the interest rate is rubbish,simply pull your money out.

Store it at home
Invest it
Spend it

But dont leave it in paltry savings accounts with the added loss of being taken for a fool. Not only is it financially damaging but also spiritually.

pop_gun

jimjames wrote: »

I'd agree with the HL article.

As it stands at the moment I can see very little likelihood of rates rising in the near term and the suggestions of a further 3+ years at current rates seems perfectly feasible.

In terms of other options I'd be very wary about dismissing all stock market investments based on a few "dodgy shares". I hope they were part of a balanced portfolio so that any losses on those were covered by gains on the rest. 6%+ since start of year for the FTSE and 20% for funds outside UK.

Not suggesting that is regular but making judgement on the worldwide market on the basis of a bad stock selection seems to be cutting off your nose to spite your face. Even dividends of 6% are possible so 10% is not beyond reach but the key is a balanced portfolio.

Gold has out performed the stock market over the last 10 years. Does that mean gold is a better investment? The stock market is for insider traders and fools. Only the former is guaranteed returns.

ColdIron

Depends what dates you pick, historically the stock market has always outperformed gold. I am a gold bug but would never consider more than 5% physical gold in a portfolio and would not recommend buying it now unless you think inflation will run amok or the currency is about to collapse

Gold does not guarantee returns, it's not an investment it's speculation and it doesn't pay dividends

MoneySaverLog

Short the USD/JPY ?

Milarky

melbury wrote: »

I was reading an investment magazine sent to me from HG and there is an article about interest rates in it that makes very depressing reading.

Says that experts are predicting that base rate will fall to 0.25% by next year and then a very gradual increase back to 1% by 2019

What are people to do?

These 'experts' will for ever be 'predicting' the future - and with ever-increasing baselines it appears. Essentially it's like using clock arithmetic: eventually the 'time' [here, interest rates] must be whatever you said it would be because it has to cycle. When it begins to look as though your 'prediction' 2019 is off - no probs - just double-up on the number of years in which your 'prediction' must comes to pass. You have complete plausible deniability.. and even get paid for being wrong nearly all the time. [old statisticians joke]

watcher13

The only way to accurately predict interest rates is to have a crystal ball and nobody has that. The general feeling is that interest rates will not rise in the near future and that is woeful for those with cash savings, unless you have been lucky enough to 'fix' at a reasonable rate - but how long do you fix?

Historically, the market tends to do better when interest rates are low and will outperform cash savings over the longer term.