Chinese/Hong Kong investments

EdInvestor

dipsomaniac wrote: »

what do you think are the safest stock market investments??

a portfolio of income shares is 3 x more volatile than a corporate bond/fixed interest portfolio

Yes. So? :rolleyes:

Income shares are still the safest stockmarket investment.

dunstonh

Income shares are still the safest stockmarket investment.

Thats a bit simplistic isnt it? as well as being wrong.

JDinho

dunstonh wrote: »

You can also reduce the risk from equity funds by utilisng funds in the UK Equity & Bond Income, UK Other Bond, Property and UK fixed interest sectors. Whilst some of those are not stockmarket, they would reduce the risk over 100% equity.

Maybe I have missed an earlier post (asking for UK only) but this is heavily orientated around the UK - where is the overseas diversification amongst those asset classes?

dunstonh

JDinho wrote: »

Maybe I have missed an earlier post (asking for UK only) but this is heavily orientated around the UK - where is the overseas diversification amongst those asset classes?

At this time, global bonds arent that attractive and the UK fixed interest sector would be offset your other sectors. Although UK Other bonds doesnt include funds within that sector that do a selection of overseas holdings. Some are obvious by their names.

Wombat doesnt appear to be interested in sector allocation and diversification but more at investing at extremes (i.e. all in to China and then all in to something else).

EdInvestor

dunstonh wrote: »

Thats a bit simplistic isnt it? as well as being wrong.

It's the answer to the OP's original question.

I am just wondering what would be the safest stock market investment I could make that most likely just beats ICICI savings account over the long term (10 year timeframe) ?

A high yield portfolio/equity income fund should do exactly that. Sorry if it's too simplistic for you.

I know the industry doens't like simple stuff - after all, if it's too simple, people wouldn't need to pay for expensive advice would they?

nrsql

There's a lot of people here talk about investing to match your risk profille so I would have expecetd a few more posts explaining what the lowest risk investment would be. Note - any suggestion will be wrong as it wil depend on timing. Often bonds are very low risk but they have been a lot higher risk in the recent past.

You're doing what any sensible investor would do to maximise return. Finding a sector which you think is best and investing in that. You (I'm not so convinced that I would commit all but I'm pretty cautious) think it is fairly risk free at the moment so why not avoid mediochre returns by committing yourself to it. As you point out there will come a time when you feel it is more risky and will then move funds out of it. It's not an all or nothing so you will be continually evalualting the risk against reward and investing accordingly.
The mistake people make in bubbles is to get greedy - either being too exposed because they don't monitor risk objectively or because they come in late blinded by the returns they could have had.

As to what will be least risk market investment when you change your tack - depends what the market is like at the time. Often it's not obvious what will grow so you will compensate by diversification.
Probably you will move out of China in tranches as you consider the risk growing and each tranch will be invested in different areas.
You'll probably lose some if/when China crashes but hopefully the gains will be more than a diversified investment now.

I have a portolio with which I do exactly the same with when I see an opportunity or am bored. It eventually ends up looking like my other investments. This has done a lot better than anything else but I'm still happy that it's only a small part. Like a lot of people I'm content with mediochre returns and restful nights.

wombat42_2

Being largely a state controlled economy, the Chinese government could pull the plug on the equity markets at any time by actually making cash accounts give a positive return and ramping up capital gains tax. But they have chosen not to and the argument is made that they wouldnt dare this side of the Olympics as they feel that the main reason why the Government is given legitimacy by the people is that their investments are soaring and they dont want riots during the Olympics. There are vast numbers of Chinese pumping money into the Chinese Stock market every day and virually no one is selling.

Currently the stock markets in the rest of the world are very wobbly but China a soaring almost every day as if it is in a parallel world. I am making a nice wad of money thank you very much. I am closely following the developments in China and at some point I will switch out to UK equity Income funds - it could be tommorrow, it could be in six months time).

nrsql

>> UK equity Income funds
Does that mean you've decided that's the safest possible?
Sounds like you're looking for a point where the chinese market risk outweighs the value. As I said I don't do that but I reduce the amounts invested as I think the ratio reduces. I don't like the term "taking profit" but prefer to think of it as timing the sector.

Have you thought about what will happen if China does what you suggest? How much China is supporting varoius other markets and what effect this could have on them?

wombat42_2

Today for example the Shanghai Index is up 1.48% and the Hong Kong market is currently up 0.48%. There are two different worlds:
1/ World 1 - China
2/ World 2 - Everywhere else

So much for the market downturns last Friday !

Dithering_Dad

Just come across this thread. It reminds me very much of an older thread where someone borrowed 10 or 20k on an interest free credit card and gambled it on a single UK company share. He doubled his money as far as I can remember - not sure if he got out in time though to relaise his gains.

He had a few detractors who he proved wrong, so here's hoping you can do the same. Good luck!