Are we heading for a bubble?

Pincher

chucknorris wrote: »

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).

Remember Hotblack Desiato? He was spending a year dead for tax reasons. Not so far from the truth, as the capital gains on a pure BTL is reset to £0 on death for Probate.

Nearly twenty years ago, I arranged for a BTL to be in my parents' names, so that on their passing away, it will pass down cleansed of capital gains, but still be under the £325k x 2 threshold. Over the threshold already, but fortunately 50% was passed down early, because the allowance was not transferrable in those days, so one allowance was used on one death.

The bonus is, the 50% not passed down generates income that pays very little tax, because the old dear has her own Personal Allowance.

She might be nearly 90, but I work her allowances hard.

roxy28

JohnRo wrote: »

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.

Ok thanks for the reply.
I have around £3000.00 to add to it and at first was thinking about putting £500 each month for 6 months, but think i will put it all in next week

roxy28

talexuser wrote: »

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.

Thanks for the reply.

I don't need the money i am going too add, so i will just go ahead with a lump sum instead of monthly drips which i first thought about doing.

Glen_Clark

George Osborne predicted interest rates would rise after Brexit;
https://www.theguardian.com/business/2016/apr/15/george-osborne-says-brexit-will-drive-up-interest-rates
Some people must have believed this as share prices immediately fell.
Perhaps when realising Osborne didn't see the financial crisis coming and has a history of calling the market wrong, share prices rose. But maybe they are getting ahead of themselves now. A story in the FT points out that directors of large FTSE companies, who were net buyers in the share price falls after Brexit, have now turned into net sellers.

themanfromamarillo

Yup, we have highly elevated stock and bond prices fuelled by low interest rates. As one economic commentator put it on Twitter, people are buying bonds for capital gains and stocks for yield. The problem is how does it unravel? The UK, Japan and the Eurozone aren't going to raise rates any time soon, the US Fed is terrified of spooking the markets so keep putting off rate rises.

Perhaps some geopolitical event will cause a spike in oil prices, increase inflation and force the central bankers' hands.

Eric_the_half_a_bee

themanfromamarillo wrote: »

The problem is how does it unravel? The UK, Japan and the Eurozone aren't going to raise rates any time soon, the US Fed is terrified of spooking the markets so keep putting off rate rises.

Perhaps some geopolitical event will cause a spike in oil prices, increase inflation and force the central bankers' hands.

A rise in inflation caused by a spike in imported oil prices would not be a good reason to raise interest rates.

Glen_Clark

roxy28 wrote: »

Thanks for the reply.

I don't need the money i am going too add, so i will just go ahead with a lump sum instead of monthly drips which i first thought about doing.

There is the pscholigical factore to consider. If you put it all in today you are only in the same situation as those of us who are 100% invested.
But if markets fall 10% tomorrow its harder to swallow for someone who put it all in today, than it is for those of us who have been in for years - even though we have all lost the same percentage.

[Deleted User]

mapk wrote: »

A falling drone is inevitable

Dunno, mine got stuck in the top of a very large tree at the weekend

roxy28

Glen_Clark wrote: »

There is the pscholigical factore to consider. If you put it all in today you are only in the same situation as those of us who are 100% invested.
But if markets fall 10% tomorrow its harder to swallow for someone who put it all in today, than it is for those of us who have been in for years - even though we have all lost the same percentage.

Yes i see what you mean, i have not added any more yet because its still tempting to drip feed.

Glen_Clark

Are we heading for a bubble?
According to the FT banks are looking for ways to store cash when interest rates go negative. There is a cost to withdrawing banknotes, storing and insuring them. What does it say when professionals would rather pay to store banknotes than invest in equities at these prices?.