Statement of intent

StuartGMC

This is scary stuff for savers and those needing income from savings, see http://news.bbc.co.uk/1/hi/business/8301418.stm

"UK interest rates will stay low for years amid tax rises and spending cuts, according to an economic forecast.The Centre for Economics and Business Research (CEBR) believes the rate will remain at its current 0.5% level until 2011 and not reach 2% until 2014.
The report predicted the pound will weaken further, falling to $1.40 and "possibly" below 1 euro"

This is the first time I've seen such a long-term prediction of base rate in the present climate and the 2% value has been pushed way, way back.....

Those exchange rates will wipe most locations off the map for us as tourists but should earn plenty of export orders.

Presumably, growth in other regions with stronger currencies should result in an even larger return for us in sterling (depending upon the costs to purchase of course).

SmlSave

Scary stuff indeed Stuart

StuartGMC

Sold total of 472 units in NERGRA at £2.98 each (today they are a bit less at £2.93) which equated to a small loss over them (£39) so now need to look at when to take the £1400 and invest it into other funds. I'll watch for a little while, but as you know this sum is split over 2 ISAs (mine and OH's) so any purchases need to be at least minimum allowed on iii per fund. Today funds are 9% up in total.

However, I also don't want to wait too long as the markets still seem to be on the way up so making every day waiting lead to fewer units I can buy, unless of course the markets drop. As they say timing is everything....

Meanwhile on the mortgage front, it certainly is very tight to clear yet have some savings and I don't think I can really gauge it until my payday late in the month. Don't expect any surprises though and therefore likely to be a little while before we finally go MF.

SmileyG_2

Thanks for posting the portfolio!. It all looks a little bit scary to me (in terms of asset allocation and diversification): hopefully the Russian sale helps you sleep more easily!

On the general stockmarket front, the market seems to be racing frwarded, spinning the wheels and then reversing slightly.

As to timing, no-one ever gets that right, so I would suggest you take time out to seriously consider whre you want to re-invest.

"Its time in the market, not timing the market" that is most important and your recent return to profit vindicates that.

Good luck.

SmileyG

StuartGMC

SmileyG

My portfolio scary? No, it's just that presently we only have the "growth" portion in place and investing now for long term growth (until we have more cash to increase contributions I hope to the maximum per year over Cash and Funds ISAs). These are genuinely for long term growth and are not allocated to pension, mortgage clearance etc so we have the luxury of choosing when to convert to income funds/cash/index-linked gilts.

If all goes to plan once we are entering FY2010-11 then we'll have added another range of funds which will include some lower risk, plus perhaps some property exposure (via a fund to get a position before the prices rise) and maybe one more specialist area; ideally want to spread over about 12 active funds at a time I think. We can and will, choose to freeze payments into some like we have Russia, but basically I think you need to keep watching things carefully and review and act don't just think it's "done" for a year.

As you say, time in the market is actually the governing factor longterm, and we are looking at 8+ years ahead during which we want strong growth. Only then do we start to consider major moves to income/lower risk/index linked gilts etc not withstanding some ongoing investments in funds which are lower risk and ongoing top-slicing, hopefully, to realise some profits from the high risks and drop into lower risk (absolute returns etc).

So despite my earlier comment on timing, and in view of the total sum involved (only £700 each to me and OH) we've opted to go for the following and placed orders tonight:

£200 to Neptune US Opportunities A (NEUSA) - medium risk
£500 to First State Asia Pacific Leaders (CFAPLA) - high risk

Remember we are still contributing monthly to these anyway, and the usual £300 will be invested tomorrow.

I'll let you know how things pan out from here.

setmefree2

StuartGMC wrote: »

£200 to Neptune US Opportunities A (NEUSA) - medium risk
£500 to First State Asia Pacific Leaders (CFAPLA) - high risk

Remember we are still contributing monthly to these anyway, and the usual £300 will be invested tomorrow.

I'll let you know how things pan out from here.

with that Stuart :T

Queen-Bee_2

Stuart - forgive me for asking the obvious, but if one's a complete novice and wanting to know more, where's the best place to start? There is so much out there, but so much of it is inaccessible to a complete beginner. Any advice on this would be much appreciated! QB

StuartGMC

Queen-Bee wrote: »

Stuart - forgive me for asking the obvious, but if one's a complete novice and wanting to know more, where's the best place to start? There is so much out there, but so much of it is inaccessible to a complete beginner. Any advice on this would be much appreciated! QB

QB we only started in 2006, but I took a little time to read about things in the 6months before decision, sufficient that whilst we initially signed up to NatWest funds (a little unsure it was right), within a day or so realised they were no where near the performance of funds we could access direct from online (non-advisory) fund / share supermarkets, so we ditched them well inside the 14 day cooling off period. I then went with a couple of UK funds.

We have usually invested monthly not major lump sums and I do keep an eye on things (as you can tell) with a mid-year "check" on progress and a review each December.

So, I still see myself as a novice, but from what I've learned I think if starting now I would:
1) Obviously remember you can lose all the money invested, and you need to know if your intention is to be withdrawing at a certain fixed date, or you can be flexible - just think where I would have been if I had needed to withdraw money in Oct/Nov 2008, major losses!
2) Decide on your balance of acceptance of risk (of loss)/ ability to enjoy (?) volatility vs. your desire for possible major growth. In essence if you want high growth then you need to go for more risky funds, or at least have some funds in your portfolio which may be higher risk than others.
3) You have the chance now to invest at only £20 per month per fund (on interactive investor) - this means you can spread £100 over 5 funds; when we started the minimum was £50 so you'd only spread over 2....
4) Read around the information available
4a) Interactive investor can compare funds
4b) Trustnet gives better information on each fund
4c) Maybe buy (or see if library has) something like Money Observer magazine which has now been running for 30yrs. I've only been reading it a year, but it is very good (if you like it go to their web site, sign up for 3 copies for £1 then you'll get a subscription which saves a lot on cover price, you get online access before each issue is printed etc)
4d) If you have cable or satellite TV then watch Bloomberg
5) Remember you need to diversify and it is difficult to do that on just a few specific company shares, funds spread your money wider but carry costs (which the online supermarkets reduce for you).
6) Presently growth in Asia, Latin America and maybe Russia is set to outpace Europe and North America. It may well soon be "normal" to have some investments in these regions for many people particularly as the UK isn not expected to generate good returns or growth in the next few years.

You can do all the above and not risk a penny if you want to practice - just make some selections then put them into a portfolio on Trustnet and you can then track performance.

Does that help?

REMEMBER - this is just a view not recommendation and I am still, and will continue, learning over many years to come.

Queen-Bee_2

Hi Stuart,

That's very helpful, thanks.

At the moment I've got a L&G index-tracking ISA, which spreads investment across the UK sectors. It has low admin. charges, which is one of the reasons I chose it.

However, I'm interested in finding out more about the principles of investment and maybe starting to make modest monthly investments elsewhere.

And then, with luck, by the time I'm back on the career ladder, I'll be in a position to invest more, but from a more informed perspective!

QB

StuartGMC

QB
Best wishes in your plans