Are we heading for a bubble?

Pincher

They just haven't found the killer app for 3D printers and drones.

Funny you should put the two together.

If I was the Q branch, developing assassination drones, I would use the hooker in Mars Attacks as a template. Use 3D printer to produce a Taylor Swift (or other hot stuff) exterior, over an endoskeleton drone.

Killer application

Pincher

Bubble? I'm counting on it.

The "What are we gonna do now" crowd that goes for three year fixed energy tariffs when it's the most expensive when standard tariff goes up, will now react to the fall in BOE rate in exactly the wrong way as usual.

They will now pile into equities, probably some kind of passive FTSE Tracker, because they read in the money sections is better value than active (closet tracking) managed funds. Savvy people who can manage properties can borrow at really low rates, and live off tenants, but a lot will flow into equities.

So, FTSE shoots up, and more sheep pile in. Price goes up, yield goes down. It's just a matter of time before they realise FTSE Tracker funds are yielding not much better than a deposit account.
Bonanza time for financial advisors, whom the clueless will now turn to for guidance, and ask: "What are we gonna do now?"

But where can they go? I look forward to my £4.25 HSBC shares at £10, paying 38p dividend a share, and I won't let them go for a king's ransom.

The correct way is to see three moves ahead, and see the inevitable struggle for rapidly diminishing natural resources, under the weight of unsustainable over population. To displace, blame, I would use the Sky.net approach, and go Oops Apocalypse, and emerge from a bunker with all the super models I invited.

Why super models? They don't eat much.:D

Eric_the_half_a_bee

Pincher wrote: »

They will now pile into equities, probably some kind of passive FTSE Tracker, because they read in the money sections is better value than active (closet tracking) managed funds. Savvy people who can manage properties can borrow at really low rates, and live off tenants, but a lot will flow into equities.

So you are confident there is a bubble in equities, and equally confident there is not a bubble in property?

Pincher

Eric_the_half_a_bee wrote: »

So you are confident there is a bubble in equities, and equally confident there is not a bubble in property?

There is a global asset bubble from too much QE.
The problem with ultra slim interest rate is, you can't just pack up your toys and not play. So all you can do is take a view and allocate.

As you bring up equity and property, I sold one property back in March, so I obviously think it's safer to profit take, and the buyer obviously thought the other way. I suppose you can call it confidence to do so knowing I have to pay ~£120k in capital gains tax.

A lot of that money is now in equity, and the 11th August ex-dividend date has gobbled up all my dividend allowance this tax year.

chucknorris

Pincher wrote: »

Bubble? I'm counting on it.

The "What are we gonna do now" crowd that goes for three year fixed energy tariffs when it's the most expensive when standard tariff goes up, will now react to the fall in BOE rate in exactly the wrong way as usual.

They will now pile into equities, probably some kind of passive FTSE Tracker, because they read in the money sections is better value than active (closet tracking) managed funds. Savvy people who can manage properties can borrow at really low rates, and live off tenants, but a lot will flow into equities.

So, FTSE shoots up, and more sheep pile in. Price goes up, yield goes down. It's just a matter of time before they realise FTSE Tracker funds are yielding not much better than a deposit account.
Bonanza time for financial advisors, whom the clueless will now turn to for guidance, and ask: "What are we gonna do now?"

But where can they go? I look forward to my £4.25 HSBC shares at £10, paying 38p dividend a share, and I won't let them go for a king's ransom.

The correct way is to see three moves ahead, and see the inevitable struggle for rapidly diminishing natural resources, under the weight of unsustainable over population. To displace, blame, I would use the Sky.net approach, and go Oops Apocalypse, and emerge from a bunker with all the super models I invited.

Why super models? They don't eat much.:D

I'm putting almost all my free cash into equities, and apart from also buying the max allowed additional pension in the teachers' pension scheme, I have been doing so since 2010. I have no interest in investing more in property, we already have over £5m (equity, not value) invested in property, and we will be selling some soon too.

I do invest in passive tracker etfs, I don't need to make more money, and I am happy with the yield that they provide, and the very low fees. One thing that I would add, is that I don't really care if they do crash, in fact, they are bound to at some point, as long as they have recovered when I eventually sell up, I really don't care. In fact, it can come in quite handy, I currently have over £55k in capital losses being carried forward to offset against future CGT when I sell property, I got this simply by switching into similar etfs when the market was down and creating a notional loss. The market has now recovered, but I still have those losses to offset.

roxy28

I am a novice investor and just want to add money to my VLS 60 fund inside my S&S ISA, its gone up a bit since i last put money in.
Is that just the nature of things and i just add money now and stop looking too much in to price rises.

What do more experienced investors think.

JohnRo

I am a novice investor and just want to add money to my VLS 60 fund inside my S&S ISA, its gone up a bit since i last put money in.
Is that just the nature of things and i just add money now and stop looking too much in to price rises.

That's the dilemma isn't it.

Do you wait until it drops to some lower value? If it does, do you then get smart and wait even longer until it drops even further? Conversely do you then sell some once it's at a relatively high value, or do you get smart again and wait until it rises to an even higher value before selling some?

It's called market timing and it's impossible for anyone to say what will happen in future other than the value of your investment will rise and fall in value, that's why it's better to make a long term regular investment plan and adhere to it.

That way you have a reasonable chance of capturing some of those lower prices without the risk of your capital being out of the market when things are on the up.

talexuser

roxy28 wrote: »

I am a novice investor and just want to add money to my VLS 60 fund inside my S&S ISA.

It doesn't matter as long as you don't need the money now, or next year, or the year after. You have to look on it as long term, like a pension.

If you think the economy is going to tank, it's maybe not worth investing now. If you don't invest now and things chug along, you miss out compounding which you may never get back. We can't predict the future, only say that if you stay long enough through an economic cycle, the historic chances are good you will beat deposits. Trouble is little of the history includes central bank printing tons of fiat paper and years of virtually zero interest rates which puts another question mark over the historical perspective, although a definite downside on deposits.

Pincher

chucknorris wrote: »

The market has now recovered, but I still have those losses to offset.

28% on property gains, but 20% on ordinary gains.
As if you had a choice.;)

I wonder if you can get a tax deduction for marrying ugly women, since we will do anything and everything to save tax.

UGLY: Union of Gorgon Love Yaks

Protest placards: Marry Me! Marry Me! Marry Me!

chucknorris

Pincher wrote: »

28% on property gains, but 20% on ordinary gains.
As if you had a choice.;)

I wonder if you can get a tax deduction for marrying ugly women, since we will do anything and everything to save tax.

UGLY: Union of Gorgon Love Yaks

Protest placards: Marry Me! Marry Me! Marry Me!

I don't pay CGT on my shares, it is easy enough to avoid paying. It isn't that easy to avoid it on property though, this is the one way that I have found to avoid significant amounts of CGT without having to live in them (I've already lived in 3 of my properties). Our total CGT tax bill is going to be about £800k on property, so that is one of the reasons why I am drawn to equities:

- easy to avoid CGT
- much lower income taxes than property
- no high initial entry fees/charges such as stamp duty
- no high leaving fees/charges such as estate agent's fees
- no lifestyle intrusions (or letting agents fees if used to avoid)