What will happen when interest rates rise?

Thrugelmir

chucknorris wrote: »

I'm really surprised that you would advocate 100% savings over a balanced portfolio over the long term.

Bonds are down with further to fall, oil, mining and banking stocks are all under downward pressure for various reasons. China is catching a cold. Gut instinct says sit on the sidelines in cash for the moment. Unless there's an anomaly in the valuation in a specific stock.

chucknorris

Thrugelmir wrote: »

Bonds are down with further to fall, oil, mining and banking stocks are all under downward pressure for various reasons. China is catching a cold. Gut instinct says sit on the sidelines in cash for the moment. Unless there's an anomaly in the valuation in a specific stock.

But 'for the moment' is not a long term strategy (as I posted'), you should know that. I also think that it was a reasonable interpretation that the poster concerned was (apart from her pension) very savings biased.

Thrugelmir

chucknorris wrote: »

But 'for the moment' is not a long term strategy (as I posted'), you should know that. I also think that it was a reasonable interpretation that the poster concerned was (apart from her pension) very savings biased.

Paying down debt is a defensive option. At least a guaranteed return. First rule of investing is not to lose capital.

katejo

Thrugelmir wrote: »

Paying down debt is a defensive option. At least a guaranteed return. First rule of investing is not to lose capital.

My saving is split between pension including AVC's, saving for specific projects and clearing the mortgage. Different people have different levels of risk and different attitudes to money and debt.

midnight_child

Thrugelmir wrote: »

First rule of investing is not to lose capital.

The second rule is to not speak about losing capital. :rotfl::rotfl:

Thrugelmir

katejo wrote: »

Different people have different levels of risk and different attitudes to money and debt.

Risk comes in many forms. Far more than the average investor appreciates. Many investors struggle to distinguish between lady luck and their own investing skills. Given this is one of the longest bull runs in recent history. I suspect many are going to be shocked when volatility finally strikes. Then we'll see how their attitude to risk stands up.

midnight_child

Thrugelmir wrote: »

Given this is one of the longest bull runs in recent history. I suspect many are going to be shocked when volatility finally strikes.

Yet I was the one a few pages back getting accused of being a closet bear


Do you think we are still in a bull run? FTSE has lost about 500 points since a few months back. I agree its probably still has further to fall, but reckon we will have another (smallish) rally first when folks get back off holiday, and end the year probably higher than now.


MC

chucknorris

Thrugelmir wrote: »

Risk comes in many forms. Far more than the average investor appreciates. Many investors struggle to distinguish between lady luck and their own investing skills. Given this is one of the longest bull runs in recent history. I suspect many are going to be shocked when volatility finally strikes. Then we'll see how their attitude to risk stands up.

I am comfortable with my risk attitude, values fall that is for sure, back in 2008 our property portfolio fell by about £1m, and it was over £2m lower than it is today. If you are investing for the long term, you have to expect to go through some uncomfortable times, it isn't always going to be an easy ride. But if you are talking about an exit strategy, that I agree is entirely different from having a long term view. In fact, I'm currently reviewing my exit strategy from property, and I may no longer be in property for the long term.

chucknorris

midnight_child wrote: »

Yet I was the one a few pages back getting accused of being a closet bear


Do you think we are still in a bull run? FTSE has lost about 500 points since a few months back. I agree its probably still has further to fall, but reckon we will have another (smallish) rally first when folks get back off holiday, and end the year probably higher than now.


MC

I think your age has a lot to do with whether you should feel bullish or not, my view is that if I am investing for the long term, then short term falls in value are inevitable, I don't think trying to time the market and avoid corrections is a viable strategy. My horizon for equities is probably about 15 years away, I probably don't want to be too heavily invested in equities beyond my early 70's. I am not heavily invested there right now, but when I dispose of my properties I probably will be. Whilst I am no longer bullish about property, because I think that I need to get out by my early/mid 60's (possibly much sooner), I think I can afford to be more bullish about equities being higher in about a 15 to 20 year time frame.

Graham_Devon

The latest "speek" from the bank of england is that rates will rise "pretty soon".

Last week they would rise "shortly". The week before that, they would rise "when required". A couple of days before that it was "sometime in the future". The week before that they were trying to dampen expectations for a rate rise.

This forward guidance has been a PR disaster. The need to say something shouldn't be overtaken by the need to say something different each week.