Investing and Savings

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elgaucho
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Investing and Savings

Post by elgaucho » Mon May 24, 2021 8:50 am

It's surprised me for a good long while that I don't think I've ever seen a post on TGA about investments or savings etc.

I mean, years ago on PW, we were all pretty young and starting out in our careers (some more so than others!), but over time I guess I somewhat expected that someone somewhere might have posted a thread about investments.

Not strictly about advice or bragging, but perhaps even just about information that's happening in markets or the economy.

I've worked in brokerage for some 15 years by now, but despite this, I don't consider myself an experienced or knowledgeable investor. I've certainly under-invested in the opportunities I could probably have taken advantage of, but also, even working in the industry, you don't necessarily get involved in the details of what makes good investing.

The hot topic in recent months has also, without a doubt, been cryptos. Musk is an influencer with the capacity to manipulate an entire market just on his tweets, which is astonishing, and OUGHT to be highly illegal. But as cryptos are entirely unregulated (except for AML (money laundering) regulations), he's been able to get away with it entirely.

I've no doubt that regulation is coming - I expected it years ago to be honest, predominantly on the grounds it was needed to prevent its use for Money Laundering, but I was way wrong on my timelines, and cryptos have been allowed to balloon enormously in the time in between, and with ridiculous returns, to the point that it can't really be ignored as part of an investment strategy. My only principle on cryptos is put in only what you're willing to lose.

But I remain curious... do we have investors among us? Equities/ Stocks Traders? ETFs? Funds? Cryptos? Do we have any lunatics who do Contracts for Difference?

Or do you have questions about any of these or what the differences are? I'm genuinely curious.
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Mantis
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Re: Investing and Savings

Post by Mantis » Mon May 24, 2021 10:33 am

I think crypto is more gambling than investing at this point. At some point governments will rein it in and the value will crash completely.

I don't have the time or inclination to follow stocks and market trends, so I just stick a chunk of my savings into market index trackers. Time in the market beats timing the market, or so they say, so spreading the risk out over an index rather than paying attention to specific stocks seems like the safest way for me to make any kind of long term returns without having to actively pay much attention to it.

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Wrathbone
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Re: Investing and Savings

Post by Wrathbone » Mon May 24, 2021 10:43 am

I pay into a pension and try to keep at least a couple of months' salary in my current account, but otherwise the only savings I've got are in the ISA I opened up last month as a fund pot for a new PC in a year or so. I could save or invest a modest amount each month, I just choose to spend it on things I want instead. This is the benefit of not needing money for kids or a car. ;)

It's kind of a recent state of affairs, as until a couple of years ago I wasn't exactly on the breadline but I was plummeting into my overdraft constantly and racking up credit card debt (nothing mammoth, but it was never fully paid off). Then within the space of a few months I paid off my student loan, paid off the deposit my parents had loaned me for a house deposit, got a promotion and was left a few grand from my grandma who died. Suddenly my credit card was cleared, my current account was buoyant and I had substantially more money going in my pocket every month. I can honestly say that with dollar signs in my eyes, the idea of investing any of it never really crossed my mind. :lol:

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Maturin
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Re: Investing and Savings

Post by Maturin » Mon May 24, 2021 11:57 am

I've recently got back into paying into my pension again, now my sole trader income is rising enough for it. Got some other money in bonds, but the rates are getting so low now it barely seems worth it.

I might look into moving it into some kind of tracker fund later in the year.

But inflation could be about to go through the roof in the UK, so that could seriously impact on many things over the next year or so.

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Mantis
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Re: Investing and Savings

Post by Mantis » Mon May 24, 2021 1:24 pm

You can minimise your risk of UK inflation knocking out your fund gains by spreading your investments across different funds. For instance, I've got two main funds, one which broadly follows UK stocks and another which is more global with a strong emphasis on the US.

Though having said that, the US one has been hammered quite a bit recently too for some reason. I think they might be on the verge of a rate rise too with the amount of cash Biden is throwing into the Covid recovery.

That said, even if your short term gains get knocked out, the alleged strength of a tracker is that it follows the whole market and broadly the markets always end up recovering and continuing to rise. Time in the market and all that. Eventually you will see gains which surpass any bank account rates you will get.

I'm a total amateur though, so it's possible I'm talking utter bollocks.

elgaucho
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Re: Investing and Savings

Post by elgaucho » Mon May 24, 2021 5:52 pm

I do feel that with cash interest rates having been at rock bottom rates for over a decade, and with an uptick in inflation expected going forward, that the best way to protect your cash is to put your positions into some investments. Otherwise it's basically devaluing over time in your account, which is a depressing state of affairs.

The hesitation I have at the moment is whether we're due another massive market crash - it seems bonkers to me that through the whole Covid situation the markets not only remained broadly stable, but ballooned up, particularly in the context of tech stocks. The increases are astronomical when contrasted to the values of the business, but that hasn't impeded the market. If it happens I'll inevitably stay invested overall and ride it out, but no one wants to put in right before this happens.

I think Mantis's strategy is fairly sound, and there are certainly plenty of choices when it comes to funds. I've always felt more comfortable investing in Funds, as you know there's some active management of the position. You just want to put in and forget about the position.

If you're looking to trade equities little and often then something like a regular investment account can do wonders (for example https://www.ii.co.uk/investing-with-ii/ ... -investing ), which keeps trading fee impacts to a minimum. You'll basically pay to liquidate or transfer your positions, but entry is next to cost free.

I also quite like etoro and their "copy portfolio" models. You can follow people and see their investment history, and even copy them. If you find someone with a solid track record, and who's strategy or risk approach mirrors yours then it's a fairly stress free way to "delegate" the trading decisions to them, and I find the whole model very transparent. I don't like that you're basically paying to FX positions to USD based on their rates, that you're paying % based costs for entry or exit, but the net impact over time should mitigate that if you're in for the long haul.

The UK's ISA model is a fantastic saver, especially as the rules were loosened a few years ago. Unfortunately I can't benefit from those tax savings at the moment, but they're still well worthwhile.
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Achtung Englander
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Re: Investing and Savings

Post by Achtung Englander » Wed May 26, 2021 7:59 am

ISA & Pension in a Vanguard world tracker

I have invested £2.5K in coins from Ethereum to XRP to Bitcoin. I see them as assets, like Gold. I read all about the blockchain and I do not care about whether it will replace fiat currency. It could be a Tulip scheme but the fact is the technology has been invented and it now depends if Govts regulate it out of existance because they fear it. I can afford to lose a couple of grand. I certainly would not put a significant amount of money into it. This bubble is generated by a lot of spare capital sloshing around looking for a home.

The best option is to put your money on a world wide tracker index and forget all about it until you retire.

Also dont trust a third party to look after your money - like a bank or building society - they will make a fortune on commissions and steal your money. Open a Vanguard account or with another broker and stay on top of your investment
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elgaucho
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Re: Investing and Savings

Post by elgaucho » Fri Jun 11, 2021 6:23 pm

Generally I don't like the Motley Fool - they always seem to have the "best" tips, so if they're all the best, I can hardly call them reliable.

However, the following article did pique my interest. With Electric being the foreseeable future (acknowledging it has pros AND cons), there's no doubt in my mind that whoever makes the best deals to get their batteries to market (or multiple whoevers), and whoever has the best batteries is going to win big in the next car cycle. Everyone is going to have some skin in the game, and now the tech companies like Apple want in also.

https://www.fool.com/investing/2021/03/ ... gy-stocks/

I think agree with the following article that we've also reached the spike in the S curve for exponential growth in electric vehicle sales, and the exit of the pandemic definitely going to coincide with a massive increase in hybrid and, increasingly, electric cars

https://www.bbc.com/news/business-57253947

I actually jumped onto the all electric bandwagon about two months ago, and I can't say I'm regretting it at all. It does suit me a lot that I can also charge my car at the office during the day, so I have, so far, zero running costs. Mind you it's almost negligible for the cost of the damn things....

Has anyone else gone electric or thought about it?
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