Achievable Pessimistic Portfolio

jamesd

HL sells covered warrants but not options within their SIPP. I don't think that either is a permitted investment for ISAs but that might have changed with the liberalisation last April, not sure. HL offers options within its HL Markets product, operated by IG. I assume but haven't checked that HL offers covered warrants in their fund and share account.

For other providers it depends what products they choose to sell, you'd need to check with the provider and maybe move some money to one that offers what is wanted.

N1AK

If you think the markets going to fall then investing/saving cash or bonds is the standard option.

Chris75 wrote: »

At my age 10 years is a long time. Capital appreciation is less important than capital protection.

You shouldn't be in stocks at all if capital protection is more important to you than earning rate over a 10 year window. You're already making decisions that don't match your stated priorities so I'm not sure we can advise you wisely.

DonM

Tricky one. Troy & Ruffer are both decent funds. What I would aim for is a diversified mix of asset classes (not just bonds & stocks) & I would also not rule out good hedge funds (small percentage of fund) that have the opportunity to capitalise when/if markets fall. Also, consider other markets rather than just UK/EU/US.

Unfortunately there is no point in me naming the funds we use as they are not accessible to you.

Thrugelmir

Ryan_Futuristics wrote: »

It's cash ... I'm moving 10% of my portfolio into Funding Circle (P2P lending to small businesses with an estimated return of 7% - which seems very reasonable at the moment, but of course it's a new asset class, so there are always unknowns)

Nothing unknown about lending to small business. Chasing yield isn't the way to select investments. Risk comes in many forms.

Ryan_Futuristics

Thrugelmir wrote: »

Nothing unknown about lending to small business. Chasing yield isn't the way to select investments. Risk comes in many forms.

Well if I didn't think there were unknown unknowns in the P2P lending sector, I would have more invested in it

Funding Circle covers a fairly wide range of risk bands and rates (from 5% to 15%) which you can choose your exposure to; it lets you diversify by having as little as £20 in each loan; loans are paid back daily; and because you're lending to small businesses, any bad debt should be tax deductible

To me, it's very similar to high yield or junk bonds (but with much lower individual exposure) ... P2P lending to private individuals, at 4% returns, with potential tax issues on bad debts just doesn't appeal to me as an investment

TheTracker

I agree. P2p is low grade small bonds no more no less. The question is Not whether you expose yourself to this market but whether p2p is the best way to expose yourself (!) to that market. I consider the answer yes but open to alternatives.

rpc

Chris75 wrote: »

I am becoming increasingly convinced that over the next 12 months the only way for stock markets is down - and possibly quite spectacularly.

Whenever I have thoughts like that, I usually ask myself what I think I know that nobody else does. I don't usually have an answer.

I also believe that bonds are at a peak and that they are headed down as well.

Given that equities are have an implicit short position on bonds and historical correlation is low (but not necessarily negative), it is highly unlikely that both equities and bonds will crash.

If you are convinced, why not take up short positions on the major indices? Rather than avoid the crash you could profit from it. You can buy ETFs that short the FTSE (but be clear how they work because it usually tracks daily movements only).

Cash, gold and gilts are the usual alternatives if you don't want to hold equities or bonds.