Where to invest now the coronavirus has hit the markets

Just_a_person

2_4 said:

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

Obviously you need to compare your predicted returns against the cost added to your mortgage total. Or perhaps you could consider selling the investment after 12-18 months and overpaying the mortgage for a while to get your total debt back down.

But yeah, no reason why not.

ChopperST

2_4 said:

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

No just, no.

2_4

ChopperST said:

2_4 said:

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

No just, no.

From a financial or ethical POV?

Alexland

2_4 said:

From a financial or ethical POV?

There's no ethical angle on this (other than jamming up the phone lines for people that really need mortgage help) as the banks will charge interest during the 3 month extension so you are only increasing the amount you pay over the term of the mortgage.

2_4

Alexland said:

2_4 said:

From a financial or ethical POV?

There's no ethical angle on this (other than jamming up the phone lines for people that really need mortgage help) as the banks will charge interest during the 3 month extension so you are only increasing the amount you pay over the term of the mortgage.

I'd hope to achieve a better return than 1.49% at any time in the stock market and certainly buying now.

Sailtheworld

ttmatt said:

I had the intention to put my 400k savings into investments in the stock market through an IFA or online platform. However due to the recent turmoil in the markets can anyone advise me where would be a sensible to invest in. I've read that gold is on the up or thought about holding off until the markets hit rock bottom and then pounce... Thanks

Why not finesse the plan and buy gold as it goes up and then sell as the markets hit rock bottom? Then use the fanfare that gets played at every peak and trough to ensure that you keep buying low and selling high. This time next year....

Sailtheworld

Thrugelmir said:

masonic said:

2_4 said:

tropic_of_Username019 said:

2_4 said:

Are there any funds designed specifically to try and cash in on any recovery?

I normally invest in very broad funds such as the Vanguard 100 but don’t want to expose myself to companies with a fair probability of not surviving, which I feel such a wide-ranging fund is likely to do.

Why wouldn't you want to expose yourself to companies which may not survive? Their prices have been marked down (further than the market as a whole) to reflect the risk that they won't survive. Some won't survive, and will lose shareholder's money; but others will, and their prices will bounce back more strongly when it turns out they're pulling through after all.

Wanting to avoid such companies is contradictory to wanting to cash in on any recovery. Because it's the worst hit companies that have the potential to let you cash in on a recovery, if things get better sooner or faster than the market is currently allowing for. They also have the potential to do worse than the market, if things turn out worse than current market prices imply.

In short, I see no reason to move away from very wide-ranging funds (such as VLS 100) in the current situation. Such funds include exposure to a broad range of both companies which are worse affected by the current crisis (but with greater recovery potential) and companies which are less affected (but with less recovery potential).

I'm happy to expose myself to companies that MIGHT fail but if I say buy an all-share tracker I'll automatically be buying some companies that are likely to fail. A managed fund should have a better chance of avoiding these... that's my thinking.

But I suppose maybe that's always the case though, in theory, but in reality even if a recovery fund thinks Share A is safe, Share B is a loser and Share C is very risk with a huge upside, they could get it wrong. Hmm, ok, so I suppose it's no different now to normal...is that what you and others are saying?

As per previous comments, in a cap-weighted index, companies known to be likely to fail will make up very little of the index. Companies unknown to be likely to fail can't reliably be avoided.

You'll still be buying the companies concerned and therefore be directly supporting the share price. While others sell out. 

The point of an index fund is to give market exposure whilst reducing individual stock risk. People who can't pick winners (or losers) in a bull market are no more likely to be able to do so in a bear market. You have to stop thinking everyone has your gift.

Sailtheworld

2_4 said:

Thrugelmir said:

2_4 said:

Veering somewhat off-topic, does anyone have any thoughts on taking an unneeded 3 month mortgage holiday and putting the cash into the markets? Paying 1.49% on a 5 year fix with about 4 and a half years left. 

How much will that give you to invest? 

Around 3k. Not a huge sum but my overall pot isn't huge either.

If it's free money to invest then why wouldn't you do it? A potential gain with zero risk.
If, however, you're effectively borrowing money to make what is a relatively large increase to your investment then the risk is high. Borrowing money to invest always increases risk.

Sailtheworld

ttmatt said:

theselfishaltruist said:

I was thinking it might be a good time to invest in companies which benefit from all of this, so online businesses, pharmaceuticals, medical equipment, grocery chains (which I expect are all doing very well).

I personally went for a gold ETF recently as gold tends to sta stable in a crisis, and gets cheaper as people sell their gold for cash.

I have just left my stock in place, which has all tumbled, and just hoping it all bounces back (eventually).
I don't have any money in normal savings at all, and decided I'm going to put about a 1/3 of all my money into safe bank savings account now.
The interest is terrible, but you are guaranteed not to lose anything (well apart from the fact the interest is lower than inflation).

I'm think inflation will go to below 1% in the next few months now oil has dropped to record lows and mortgage payments are put on hold etc. These coupled with people basically having nothing to spend their money on most goods won't increase so a safe cash fixed account haven could be the way forward rather than dabbling in stocks and shares... But we've got to jump in there now before they reduce the rates as banks react to the 0.1% interest rate announcement ...

Anyone else any thoughts on this???

Investing Demystified by Lars Kroijer. Absolutely, 100% the best £12.10 I've ever spent.

cfw1994

Sailtheworld said:

ttmatt said:

theselfishaltruist said:

I was thinking it might be a good time to invest in companies which benefit from all of this, so online businesses, pharmaceuticals, medical equipment, grocery chains (which I expect are all doing very well).

I personally went for a gold ETF recently as gold tends to sta stable in a crisis, and gets cheaper as people sell their gold for cash.

I have just left my stock in place, which has all tumbled, and just hoping it all bounces back (eventually).
I don't have any money in normal savings at all, and decided I'm going to put about a 1/3 of all my money into safe bank savings account now.
The interest is terrible, but you are guaranteed not to lose anything (well apart from the fact the interest is lower than inflation).

I'm think inflation will go to below 1% in the next few months now oil has dropped to record lows and mortgage payments are put on hold etc. These coupled with people basically having nothing to spend their money on most goods won't increase so a safe cash fixed account haven could be the way forward rather than dabbling in stocks and shares... But we've got to jump in there now before they reduce the rates as banks react to the 0.1% interest rate announcement ...

Anyone else any thoughts on this???

Investing Demystified by Lars Kroijer. Absolutely, 100% the best £12.10 I've ever spent.

Or you could start by watching all his videos at http://kroijer.com!
Must admit I haven't read his book, but did love the advice he speaks