'We lost everything gambling on shares'

atush

I was trying to put the 180 lost in perspective. Allthough I have to say pretty much all my shares and funds are up this past year.

did you make anything in dividends to mitigate that trading loss?

jimjames

N1AK wrote: »

So what do we do? Refuse to sell shares to people below a certain IQ, or perhaps require that anyone buying shares shows they have more than £200k in assets left after buying them? Short of having someone watch their every move and intervene when they decide the behaviour is sufficiently moronic the only other option is to completely remove access to anything other than standard savings style accounts which are part of FSCS including by speculating on commodities, assets and property just in case.

I think there is probably far more case for regulating gambling than share dealing. Our local high street has at least 3 different bookies making it highly accessible to those that can least afford it. Whatever else these people may have done they weren't spending money they didn't have or had borrowed unlike quite a few gamblers. But that doesn't make such a good headline.

MABLE wrote: »

Wow £180K a lot to lose. I felt bad enough losing £180 last year on shares last year. I am now happy to keep any extra money i have to overpay on our mortgage and because of this we will be MF January 2015.

Can you explain how you lost £180? Did you buy at the wrong time? Panic and sell because the price dropped or invest when you needed the money sooner?

All the money I have for paying off the mortgage is in investments as I'd rather risk that than get a pittance on cash.

mark55man

jimjames wrote: »

All the money I have for paying off the mortgage is in investments as I'd rather risk that than get a pittance on cash.

My thoughts exactly - even with a conservatively constructed portfolio I should beat 2.69% by some margin


some would view this as unhealthy leverage - all I am really leveraging is an extra year in work should things go badly

Thrugelmir

mark88man wrote: »

My thoughts exactly - even with a conservatively constructed portfolio I should beat 2.69% by some margin

And in the past couple of weeks?

atush

Was a buying opportunity lol?

Seriously, I had trusts that were up 36% over a year, and are now up- I dunno? 20+ still?

Glen_Clark

mark88man wrote: »

My thoughts exactly - even with a conservatively constructed portfolio I should beat 2.69% by some margin

With the yield on my FTSE 100 ETF shares at 3.6% last time I looked that is not difficult.
But the game changer is if interest rates normalized to say 5% - not high by historical standards, and not far off the real rate of inflation if housing costs were included. Company profits would fall as they had to pay higher interest on their loans possibly halving the yield to 1.8%. Just think how far share prices would have to fall - about a third of their present value - to bring the yield back above the level of interest rates :eek:
Investors holding bonds and cash at derisory interest rates may have backed the wrong horse, but they are not stupid, and may well do better than us.

atush

The yield of the UK market and the FTSE does not fall/rise in tandem like that.

Glen_Clark

atush wrote: »

The yield of the UK market and the FTSE does not fall/rise in tandem like that.

Ok just substitute which index you like for FTSE 100 - the only reason I quoted FTSE 100 is I knew offhand about what the yield is.
Its just an illustration of how I think interest rates reverting to historic averages could drastically reduce share prices.

jimjames

Glen_Clark wrote: »

Ok just substitute which index you like for FTSE 100 - the only reason I quoted FTSE 100 is I knew offhand about what the yield is.
Its just an illustration of how I think interest rates reverting to historic averages could drastically reduce share prices.

The real anomaly is the relationship between interest rates and yields at the moment not historically. In the past as far back as I can remember the yield on shares has always been a fraction of what you can get for savings in the bank. It is only since 2008/9 that this has been turned on its head and shares have paid more.

The reasoning as I understood was that you accepted a lower starting yield because you had the possibility of capital growth and higher yield in future compared to savings.

When things return to normal it will be interest rates that rise not share prices that fall although that may happen for other reasons.

mark55man

Thrugelmir wrote: »

And in the past couple of weeks?

My fixed income is performing very nicely despite turmoil returning 8% yield and a capital gain to boot - my share portfolio is largely up 5% YTD even now, and my pound cost averaging of the "overpayments" will repay me handsomely over time

Also in support of PCA - as Warren Buffett said, why on earth would you want something you are going to hold for a while to be expensive when you buy it. I think if you invest at all you do so on the basis that in the long term it will appreciate (and for me that is the approx. 10 years until my repayment mortgage outstanding balance is less than my investment sum.

At that point I will have a good think about whether to use the pot to pay off the mortgage immediately, over time or not at all


Plus I would be concerned with total return not just income yield