HPC thread of the week

gadgetmind

chucknorris wrote: »

I switched £270k from one ftse 100 etf to another etf, and locked a £30k loss in,

Smart, well done.

But I'm finally getting to that place where I just see it as further opportunity when share prices fall.

I've been a whole load of these dips, and the world has never ended. It's nice seeing dividends come in, and new money too, and for there to be bargains out there. With the FTSE at around 7000, I was just sitting on my hands and letting cash pile up.

chucknorris

Mistermeaner wrote: »

Chuck's loaded. Just in case none of you realised.

I'v e got almost nothing in liquid cash, a friend of mine needed to borrow £6k at Xmas, and I had to work out my tax bill before I could say yes, it was very tight, but I just managed.

I didn't think of doing this (locking the loss in thing) before this tax year (I'm new to equities), I thought it was quite a good move. I switched from one ftse 100 tracker to another ftse 100 tracker (extremely similar) and although I'm obviously disappointed that it had dipped by over £30k, at least I got the tax man to take 28% of the loss from me, and if (when) it recovers, the tax man will be excluded from the recovery.

But I did make an error in investing too much in the ftse 100, it is not diverse (it got hit by the oil price fall), I knew this, but wanted to trade on the volatility, which I did for a while, but I would have probably been better off investing in my preferred etf (which is VYHL, it is very diverse).

chucknorris

gadgetmind wrote: »

Smart, well done.



I've been a whole load of these dips, and the world has never ended. It's nice seeing dividends come in, and new money too, and for there to be bargains out there. With the FTSE at around 7000, I was just sitting on my hands and letting cash pile up.

Yeah my focus is definitely on the dividend income, rather than a capital gain. I sold a bit around 7,100 but I invested more earlier at 6,900 (and of course much more lower than that). I've now realised that you need to be in a few different funds to allow creativity to mitigate CGT. Because if you have happened to invest in one at a higher level, after a recent fall, you can lock a loss in, and use it against CGT.

Jason74

mwpt wrote: »

My best guess is that I didn't find the housepricecrash website until sometime after 2010 when I really started to question my own judgement. I'd believed since about 2004, when I first had the ability to buy in London and started looking around, that prices were nuts. I saw people taking 100% + loans to buy whatever they could and just couldn't understand why. I guess since my childhood was not spent in the UK, I was unaware just how deeply engrained into the culture of the kingdom house prices are and expected things would eventually fail.

snip

Having said all that about HPC, I do think the level of analysis that goes on there exceeds this forum in many ways. Just that certain posters only look through blinkered glasses.

I think your post is bang on the money, but the two paragraphs quoted are probably the real key to why the HPC mindset ultimately doesn't work. The British as a nation are so obsessed with property that they will spend whatever they have to in order to buy whatever they can. It's simply accepted as fact by enough people that buying property at almost any time and in almost any market is an unambiguously good thing that the very fact that people think it makes it true.

And all the analysis and thought that goes into people's positions over there (and like you say, there is a fair bit of intelligent thought once you get past the "extremists") misses that simple reality. Indeed, the intelligent thought is in many ways what holds some of them back. Logically, many of their arguments "should" be right, but faced with the British obsession with property (which is understandable given the rather poor alternatives to owning) , and the extent to which Government policy supports rather than challenges it, all the thought and analysis counts for little. Indeed, when it comes to property, those intelligent thinkers would probably have been better off following the herd, and then putting their sometimes considerable intellects to better use.

cells

chucknorris wrote: »

I didn't think of doing this (locking the loss in thing) before this tax year (I'm new to equities), I thought it was quite a good move. I switched from one ftse 100 tracker to another ftse 100 tracker (extremely similar) and although I'm obviously disappointed that it had dipped by over £30k, at least I got the tax man to take 28% of the loss from me, and if (when) it recovers, the tax man will be excluded from the recovery.

can you explain that bit

something to do with ISAs?
Up = no tax
Down = offset for CGT?

chucknorris

cells wrote: »

can you explain that bit

something to do with ISAs?
Up = no tax
Down = offset for CGT?

I simply meant that eventually that the etf will (probably) recover, so I will get the £30k back at some point, because I will offset the notional loss against CGT, I will recover 28% of it by paying less CGT, because I can carry forward this years CGT loss and off set it against future CGT when I sell some of my properties, which I will be doing, I cannot avoid paying CGT on the properties, like i can with shares, but what I can do is create losses and offset those losses.

Obviously when the etf recovers there would be a potential CGT bill (because I have now invested at a lower level), but as you will no doubt be aware, it is easy enough to avoid CGT on shares, by bed and breakfasting etc. I will be a long term investor in shares, because I'm in the for the long term, I have plenty of time and opportunity to mitigate future CGT on my shares.

It isn't actually £30k (or rather £30,966 as that was the actual loss that I locked in yesterday) because I already had some profit this tax year, I did my provisional 2016 CGT calculations yesterday afternoon, and it looks like I'll be carrying forward about a £27-28k loss (so worth about £7.7k net to me), I can't say for sure because I also intend to switch another smaller fund later today and lock in about another £2.5k loss (I don't know what the market will be doing at the noon settlement time for that particular fund), and I also need to offset the dividend income from my accumulation funds, and I won't get those dividend tax vouchers until April 2016.

Generali

Why VYHF? Why not MSCI World if you want a highly diversified ETF?

chucknorris

Generali wrote: »

Why VYHF? Why not MSCI World if you want a highly diversified ETF?

It was Vanguard's VUKE (that I sold out of), the etf that I like for diversification is Vanguard's VHYL, but the thing is when you load both graphs together for comparison, they are remarkably similar :

Damn it won't allow me to copy and paste the graph!

So because they appeared very similar and the dividend income was about 0.9% higher and the fees about 0.2% lower for VUKE, I decided to take on the additional risk of less diversification of VUKE, my reasoning was that, ok there might be additional risk, but I'm getting about 1.1% more per annum as compensation.

I think the eft you mentioned is accumulation (maybe they also do an income etf? But the fees are higher than the Vanguard anyway), I prefer the transparency of income over accumulation products (yes I am a cycnic and very mistrusting), but when I was in fidelity's accumulation funds (I still have some) I really did not like the lack of transparency when it comes to the dividend income.

mayonnaise

TheCountOfNowhere wrote:

The options for us really are:

1) Retire and live in Spain ( rent )
2) Semi-Retire and live in the Uk 6-9 months of the year and Spain/France rest of year. ( rent )

or...

3) Buy a rotten dilapidated, damp, cold, badly located, expensive to heat, taxed into the ground family home.

Which would you choose ?

http://www.housepricecrash.co.uk/forum/index.php?/topic/207864-would-you-buy-if-prices-fell-25-if-not-why-not/?p=1102856537

Didn't he move to that French estate with heated pool and private airstrip last year? Confusing....:think:

System

That whole post is classic.

- HPC101 - Needing prices to fall back to where they were when they started the gamble to make it worthwhile, before you even factor in wasted rent.
- Pretending retiring is an option :laugh:
- The "bombshell" that he was lying through his teeth about moving to France.