Which asset class do you think looks best value at present?

Frequentlyhere

Not looking for personal advice here, just a bit of hypothetical fun (no need to lecture me about sticking to a balanced portfolio/plan, I know!).

With the total seachange in the investing landscape I'd be curious to know what asset class you perceive as having the best prospects in the medium term, say over 3-4 years? (Obviously in the long term equities are king and short term isn't suitable for investment).

As a few examples, from their respective tops to the present day:

Global equity in $ terms is down 22% nominal, so 32%-ish real.
Long term treasury bonds down (e.g. IDTG) - 39% nominal.
Intermediate global bond fund (e.g GLAB) - 19% nominal. YTM's over 4%
REITS (e.g. blackrock global property -18%
Cash 2 year fixes available at 4.5%.
Gold ($) is -20%
Bitcoin (raises eyebrow)  -70%.

Frankly, it all looks rather appetising to me (well, except BTC or having any more Gold than I already have). I suspect a typical global property REIT might have further to fall though.

I'd be very tempted to roll the dice on a reversal for long term US bonds, but I probably as a UK investor would still pin my hopes on a boring global equity tracker (though perhaps a hedged one in the hope that the US dollar hegemony reversal would outweigh any further £ drops).

Certainly 60/40 70/30 etc portfolios look a hell of a lot more appealing now than they did a year ago. What do you think?

Type_45

Silver is cheap. 

Matt1510

Type_45 said:

Silver is cheap. 

Similar to the great majority of your posts then Type_45 

DannyCarey

Type_45 said:

Silver is cheap. 

And for good reason.... it does nothing. 

masonic

In many cases, these assets have just gone from overvalued to fair value or slightly undervalued (e.g. US equities, bonds, cash deposits), there's mileage for them to fall further to cheap valuations. Gold is still overvalued compared with its long term inflation adjusted valuation, but is no longer near its all time high. GBP is looking truly undervalued, if you compare its purchasing power for goods and services to its exchange rates. REITs are starting to look undervalued, but this is in anticipation of recession, which will drag them down further.

Looks tempting to switch into something like IWDG, to benefit from GBP recovering. Not sure I would do so right now mid-economic chaos. Cash/fixed interest is undoubtedly going to get better value in the short term, but short dated gilts are investable again.

Bobziz

masonic said:

In many cases, these assets have just gone from overvalued to fair value or slightly undervalued (e.g. US equities, bonds, cash deposits), there's mileage for them to fall further to cheap valuations. Gold is still overvalued compared with its long term inflation adjusted valuation, but is no longer near its all time high. GBP is looking truly undervalued, if you compare its purchasing power for goods and services to its exchange rates. REITs are starting to look undervalued, but this is in anticipation of recession, which will drag them down further.

Looks tempting to switch into something like IWDG, to benefit from GBP recovering. Not sure I would do so right now mid-economic chaos. Cash/fixed interest is undoubtedly going to get better value in the short term, but short dated gilts are investable again.

Any thoughts on the Monevator view of hedging ?

https://monevator.com/dont-currency-hedge-your-equity-portfolio/

masonic

Bobziz said:

masonic said:

In many cases, these assets have just gone from overvalued to fair value or slightly undervalued (e.g. US equities, bonds, cash deposits), there's mileage for them to fall further to cheap valuations. Gold is still overvalued compared with its long term inflation adjusted valuation, but is no longer near its all time high. GBP is looking truly undervalued, if you compare its purchasing power for goods and services to its exchange rates. REITs are starting to look undervalued, but this is in anticipation of recession, which will drag them down further.

Looks tempting to switch into something like IWDG, to benefit from GBP recovering. Not sure I would do so right now mid-economic chaos. Cash/fixed interest is undoubtedly going to get better value in the short term, but short dated gilts are investable again.

Any thoughts on the Monevator view of hedging ?

https://monevator.com/dont-currency-hedge-your-equity-portfolio/

Yes, I read it and largely agree with it in general terms. It is only in the extreme that I'd consider hedging, and not over the long term. He raises a good argument against hedging global (mainly US) bonds related to getting a better negative correlation with equities during a crash.

The situation we find ourselves in today certainly qualifies as extreme in my view.

m_c_s

Short dated treasuries (2024 to 2027 maturities) are quite attractive for cash held in SIPPs for near term drawdown use. 

adindas

Frequentlyhere said:

Not looking for personal advice here, just a bit of hypothetical fun (no need to lecture me about sticking to a balanced portfolio/plan, I know!).

I love this bold statement. in the past when you try to talk about diverting from balanced portfolio / plan, you will be heavily personally attacked by the same group of people who are very vocal. This personal attack is actually will hinder the people personal development.

masonic

adindas said:

Frequentlyhere said:

Not looking for personal advice here, just a bit of hypothetical fun (no need to lecture me about sticking to a balanced portfolio/plan, I know!).

I love this bold statement. in the past when you try to talk about diverting from balanced portfolio / plan, you will be heavily personally attacked by the same group of people. This personal attack is actually will hinder the development of people.

There's a big difference between being personally attacked and having the points you make challenged. The latter is helpful for development of people and shouldn't be taken personally. The forum team is pretty good at dealing with those engaged in actual personal attacks.

adindas

masonic said:

adindas said:

Frequentlyhere said:

Not looking for personal advice here, just a bit of hypothetical fun (no need to lecture me about sticking to a balanced portfolio/plan, I know!).

I love this bold statement. in the past when you try to talk about diverting from balanced portfolio / plan, you will be heavily personally attacked by the same group of people. This personal attack is actually will hinder the development of people.

There's a big difference between being personally attacked and having the points you make challenged. The latter is helpful for development of people and shouldn't be taken personally. The forum team is pretty good at dealing with those engaged in actual personal attacks.

I fully agree with these but you have a group of people teaming up, it is another matter. Just look how many useful member if this forum get banned.