stocks and shares/FTSE iminent

westernpromise

It's a cash-settled regulated future where one FTSE point is worth £10. So if you buy one lot at 7390 and it goes up to 7395 you make £50.

Similar to a spread bet but a lot more tightly regulated.

You would simply go long whatever quantity resulted in equalised returns versus buying the actual index.

chucknorris

westernpromise wrote: »

It's a cash-settled regulated future where one FTSE point is worth £10. So if you buy one lot at 7390 and it goes up to 7395 you make £50.

Similar to a spread bet but a lot more tightly regulated.

You would simply go long whatever quantity resulted in equalised returns versus buying the actual index.

That is gambling, not investing. The difference is with that is the ftse falls and at a given settlement date I lose, but with shares, I just sit tight, wait for it to go back up again, and in the meantime collect the dividends.

westernpromise

Well, except you can roll the futures position indefinitely. That gives you the economic equivalent of sitting tight.

MrDouglas

I look at thiese things in cycles, wait for blood on the streets before you buy shares, similar with houses but this is much more difficult as affordability and lendeing is usually curtailed. Always think about hedging your investments, gold etc...bonds, bunds also play their part. Its like life cycle investing.

chucknorris

westernpromise wrote: »

Well, except you can roll the futures position indefinitely. That gives you the economic equivalent of sitting tight.

Ahh, I see, I had assumed that they would be based upon prices at a fixed future point in time, although I guess that margin calls are a possibility. But I am quite happy with what I'm doing. I find it quite interesting following the indices to be honest. Although now I am destined to follow a more 'safer' less volatile investment strategy, boring I know, and it goes against the grain a little, but sensible, I don't want to end up like Crashy.

westernpromise

Although as has been observed, landlords need Crashy and indeed HPCers generally...

chucknorris

MrDouglas wrote: »

I look at thiese things in cycles, wait for blood on the streets before you buy shares, similar with houses but this is much more difficult as affordability and lendeing is usually curtailed. Always think about hedging your investments, gold etc...bonds, bunds also play their part. Its like life cycle investing.

I really don't see the point in investing in gold, I get that it is a hedge against a total financial armageddon (1920 's style), but how likely is that, and how much income do you have to forgo waiting for it? Obviously I would view it differently if I lived in country where I didn't trust the Gov.

GreatApe

chucknorris wrote: »

I really don't see the point in investing in gold, I get that it is a hedge against a total financial armageddon (1920 's style), but how likely is that, and how much income do you have to forgo waiting for it? Obviously I would view it differently if I lived in country where I didn't trust the Gov.

Gold might be a good bet because of India.
The Indians love gold and in 25 years time India could be 10x real GDP in dollars.

Currently an ounce of gold is about one years wages in India this will go down to 1 months wages (if gold only tracks inflation) which will probably add a lot of demand. Same more or less applies to Pakistan so about 2 billion people just there.

2 billion gold lovers who's dollar income is going to grow an average 10% nominal a year. My guess would be $5-10k per ounce in today's money by 2050 but I wouldn't put more than 10% of my total net worth on it.

GreatApe

chucknorris wrote: »

I don't generally invest in single company shares, although I did invest all of both my SIPP and ISA in British Land, as a REIT it was a good home for the equity from selling an investment property, plus a little more. But I definitely don't want to start spread betting (assuming that was what the link was), that is too risky.

The biggest risk of spread betting is that it can be addictive in the same way that the slots can be addictive. It encourages users to bet with very high gearing so the general volatility kicks people out. I would strongly recommend against spread betting just on the idea that people are weak willed and its not worth that risk.

Shares are bought with no gearing (mostly) and people usually buy for longer terms

economic

chucknorris wrote: »

I really don't see the point in investing in gold, I get that it is a hedge against a total financial armageddon (1920 's style), but how likely is that, and how much income do you have to forgo waiting for it? Obviously I would view it differently if I lived in country where I didn't trust the Gov.

agree. gold should be treated like an insurance policy. you hold a small amount (maybe a few % of total net worth) but not more then that.