What are you going to invest in this week? Bonds, gold, stocks, USA, Europe, Japan, Cash ...?
With economic worries all over the world you'd be mad to invest in anything at the moment, wouldn't you? But there is always a bull-market in something somewhere in the world, but where is it?
Is it best to play safe, keep your money in the form of cash or just pay down as much of the mortgage as possible or take a gamble while prices are low. Will they go lower?
Please tell me what you think either in the TwitterStorm or Comments sections below or vote for best investment or economy below.
Government Bonds (or Gilts)
Government Bonds are a safe haven investment. AAA rated countries such as USA and the UK will always pay back your money and the annual "coupon" (interest) so what can go wrong? Some major economies (including UK and US) are perceived to be not quite as safe as they were and while no immediate downgrade has occurred there is a reasonable chance of it happening soon. This will probably not cause a default, but will result in a reduction in value. Also if inflation returns bonds prices will fall as interest rates rise to combat it and the real value will be eroded.
Blue Chip (Large Company) Stocks and shares are cheap, but will they get cheaper?
There are historically good dividend yields from big household names, but will they pay their promised dividends? If not, both their value and the income stream could be impacted. Pay careful attention to the safety of their dividends and/or buy a selection of shares in unrelated industries to reduce risk, or buy a collective investment such as an Exchange Traded Fund (ETF) or an Investment Trust
Corporate Bonds pay a huge yield, but will they default?
Historically high yields, compared to bank base-rates after a Hedge Fund sell-off (bonds were sold by many companies in need of cash) if markets return to normal the yield spread between government and corporate bonds should shrink causing a significant gain in value. This has already started to happen (May 2009) but could go a lot further. As with government bonds however, if inflation returns, bond prices will fall as interest rates rise to combat it and the real value will be eroded.
Gold is a great insurance in times of financial trouble, but doesn't pay any income. (See related article)
Which economy: USA, Europe, U.K. Japan...?
Or just leave you money in cash (But Dollars, Sterling, Euro or Yen?)
Zero Dividend Preference Shares look very good.
Zeros (ZDPs) behave much like Corporate Bonds except the profit is returned in the form of capital gains at the end of their lives, so these too have looked very attractive (especially for those hoping to avoid income tax) There are, however, just a few left with good gross redemption yields and suitable time to maturity to make a purchase worthwhile (see the link above for details of how to value them)
Investment Trusts look very cheap.
Investment Trusts often sell at a discount to their net assets, especially at times of economic stress, so there are some bargains around (if you think markets will recover soon)
Spread-betting can make you money in any market (or lose you money)
A Balanced Portfolio i.e. all of the above might be a good bet?
Buying some Gold could also be a good insurance against your currency being devalued?
Or how about hedging your portfolio with derivatives, Options, Warrants or Futures
What do you think is the best bet at the moment?
Do you believe in Technical Analysis (Charting) for predicting price movements?
Please add suggestions and vote in the Voting module or see the latest suggestions and comments in the TwitterStorm blog below, vote on the best investment sectors or markets and see the related articles:
The question at hand... Where to put your money?
What are you going to invest in this week? Bonds, gold, stocks, USA, Europe, Japan, Cash ...?
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- AndyPo AndyPo Nov 26, 2009 @ 6:40 am
- Anthony Bolton of Fidelity, (The UK equivalent of Warren Buffett with an average return of about 19% from his Special Situations fund and Special Values investment trust which he managed during his long career) has returned from "retirement" from active fund management to run a new China fund for Fidelity. I wonder if the returns will be as impressive.
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- AndyPo AndyPo Sep 8, 2009 @ 3:38 am
- Gold has just gone above $1,000 an ounce this morning. In fact it's about $1,007 at the moment, which looks a bit expensive. There are various analysts etc. who are predicting $1,200 or even $2,000, but equally some are predicting a drop back from here before it goes up again. So please be careful and don't put all of you eggs in one basket. Gold is an excellent insurance against dollar weakness, but does not pay a dividend. I have less than 10% of my portfolio in gold, silver and gold miners, at the moment, as insurance and I shall sell some if it goes much higher and buy back in if it drops back. Good luck.
[in reply to ElizabethJeanAllen]
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Reply
- ElizabethJeanAllen ElizabethJeanAllen Sep 7, 2009 @ 7:02 pm
- My husband and I are looking into investing in gold. With the economy the way it is, it looks to be the best bet.
Great lens
Lizzy
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Reply
- AndyPo AndyPo Sep 2, 2009 @ 11:56 am
- Congratulations and Good Luck. I did the same 18 months ago after 15 years and I'm so glad that I did. Now you will have even more time to Squidoo etc.
[in reply to JaguarJulie]
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- JaguarJulie JaguarJulie Sep 2, 2009 @ 11:50 am
- Well Andy, I didn't think that I would do this, but push comes to shove you know. After more than 16 years with a high-profile bank, I told 'em yesterday, "See ya!"
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Hi, I am Andy. I live in the U.K. but have worked and travelled all over the world. I am a semi-professional wildlife and travel photographer (i.e. I sold a couple of photos once), semi-retired consultant physicist (i.e. unemployed boffin) with a keen interest in finance (i.e. get rich quick..ly):
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