Credit deflation and the reflation cycle to come (part 2)

[Fully Detached]

10 hours ago, DurhamBorn said:

I tend to use percentages.So say you wanted to start buying Bp and its say £3.15 and you have £5000 for the stock,you could set 5 ladders of £1000 at 8% fall points,so £3.15,£2.90,£2.64.£2.42,£2.22.If Bp only hit £2.50 you would end up with £3000 at an average of £2.89.

Ladders remove emotion from buying.You can also remove ladders if the stock moves ahead and re-deploy in other areas.

I used them to position as i turned my portfolio around,though last March i was lucky in that i managed to buy several ladders together because the markets fell that quickly.

Ah super thanks DB! Really appreciate that - my search showed 12 pages of references in this thread alone but none of them really made sense without the underlying explanation - cheers!

[Majorpain]

 

8 hours ago, sancho panza said:

Very much as per what @Castlevaniawas saying about banks balance sheets being backward looking by necessity.I think what worries me-and I say that as someone who sees a BK type deflationary event as an inevitable prelude to a reflation-is that using reasonable metrics provided by Kevin Dowd,it doesn't seem as if British Banks learned their lesson from 2008.

But then why would they?I remember reading WIlliam White some years back saying the best way to regulate banks was to let one go bust once in a while.

It's going to be interesting tosee what failsafes work and which ones don't come a BK type deflationary wave and where the defaults cause the msot damage.As CV says bad loans are probably going to be the precursor for some wider derivative event,personaly,I think CRE will eb the epeicentre thsi time but there's still an epic bubble in resi too.

They have done relatively well over the past year, the turbulence was far worse than 2008 IMO, with not much to show for it. That is probably helped by governments learning from the past and acting fast, as well as anything else put in place.  The data on bank leverage reminds me of the pandemic stats, if you mess with statistics enough you can get the result you want!

[Barnsey]

Reflation trade seems to be taking a breather?

Yields seem to be levelling out, China credit impulse weakening. As for the £...

 

[Lightscribe]

https://inews.co.uk/inews-lifestyle/money/habitos-40-year-fixed-rate-mortgage-is-a-game-changer-for-borrowers-heading-for-retirement-904925
 

What’s the betting this mortgage lender goes bust in the next few years?

Re-mortgage, put it all in gold/silver and crypto? 

[wherebee]

10 minutes ago, Lightscribe said:

https://inews.co.uk/inews-lifestyle/money/habitos-40-year-fixed-rate-mortgage-is-a-game-changer-for-borrowers-heading-for-retirement-904925
 

What’s the betting this mortgage lender goes bust in the next few years?

Re-mortgage, put it all in gold/silver and crypto? 

jesus.  20 year at 2.99.  if that was available here in Oz I would be remortgaging up to 75% (I have no mortgage) and using that seed capital for stuff.  That's lifechanging stuff right there.

Joe and others who have been thinking about buying - that's an offer that you won't see again in your lifetime, in my personal view.

[M S E Refugee]

I was going to stop putting as much money in my Sipp as I have most of my Pension in the Royal Mail scheme and I don't want to go over the £12500 tax threshold when I hopefully retire in 6 years time.

My strategy going forward was to put as much as possible into a Stocks and Shares ISA.

These are the investments that are in the RM pension, Is there a good chance that my pension will get reduced owing to their current investment strategy?

(%)

 Equities (listed and private) 0-40

Property 0-30

High yield credit 0-30

Private debt (incl. property-linked debt) 0-30

Absolute return (including Diversified Growth/MultiAsset Funds) 0-100 Investment grade credit

0-50 Emerging market debt Other

[DurhamBorn]

16 minutes ago, M S E Refugee said:

I was going to stop putting as much money in my Sipp as I have most of my Pension in the Royal Mail scheme and I don't want to go over the £12500 tax threshold when I hopefully retire in 6 years time.

My strategy going forward was to put as much as possible into a Stocks and Shares ISA.

These are the investments that are in the RM pension, Is there a good chance that my pension will get reduced owing to their current investment strategy?

(%)

 Equities (listed and private) 0-40

Property 0-30

High yield credit 0-30

Private debt (incl. property-linked debt) 0-30

Absolute return (including Diversified Growth/MultiAsset Funds) 0-100 Investment grade credit

0-50 Emerging market debt Other

You could always open a separate SIPP yourself and save in there and get the extra tax relief,if its final salary there is no way it will be reduced,the only small risk is if they went bust and it went into pension protection and thats just a 10% cut.

Iv got a similar aim as you.I intend to take £16,600 in lump sums from 55 to 67,tax allowance and the 25% tax free,then a month before my state pension starts go into full drawdown and take the full 25% lump sum out.Once my state pension kicks in il only take £3k a year from my pension so still at the tax allowance,and then use my ISAs for extra income.My pension from that stage will mostly be for inheritance tax avoidance.

[Froggy2000]

That 20 year fix looks very tempting.  What are peoples thoughts on early repayments? 

I remember a few mentions previously of TSBs 10year fix which came in 2 forms.  One of which had the option to pay it off after 5 years with no early repayment charge but had a slightly higher interest rate.  I looked into that option, but with mortgage rates slightly over 2% I thought why would I?  Inflation / equity returns will almost certainly be higher than that, so I couldn't see the advantage in the early repayment option given that it comes with a higher interest rate.

Is there anything wrong with stretching out the payments as long as possible? Am I missing something?

[Chewing Grass]

A fix is a fix as long as it is cast in stone with no way out for the lender, if you want cast-iron certainty at uber low rates now is probably as low as you will ever get.

[M S E Refugee]

14 minutes ago, DurhamBorn said:

You could always open a separate SIPP yourself and save in there and get the extra tax relief,if its final salary there is no way it will be reduced,the only small risk is if they went bust and it went into pension protection and thats just a 10% cut.

Iv got a similar aim as you.I intend to take £16,600 in lump sums from 55 to 67,tax allowance and the 25% tax free,then a month before my state pension starts go into full drawdown and take the full 25% lump sum out.Once my state pension kicks in il only take £3k a year from my pension so still at the tax allowance,and then use my ISAs for extra income.My pension from that stage will mostly be for inheritance tax avoidance.

I have 17.5 years in the final salary then another 9 in a defined benefit scheme.

We start yet another scheme in the next year or so.

Many thanks.

[DurhamBorn]

2 minutes ago, Chewing Grass said:

A fix is a fix as long as it is cast in stone with no way out for the lender, if you want cast-iron certainty at uber low rates now is probably as low as you will ever get.

I got my kids onto the TSB 10 year fix and a very cheap 5 year with the Halifax.The 5 year was because they have got the mortgage down to £48k and are happy just to chip £4k a year plus the repayment off it now.They should have a £20k mortgage by the time they are 32 on a nice house.

My son is only 21,partner 23,they owe about £100k on £130k nice house,they got the 10 year from TSB,im quietly nudging them all the time to chip it away and they have the first £3k to pay off now.Id be quite happy if they manage a £4k a year over payment as they are paying off £2.5k capital on the repayment anyway.My son also had about £27k of silver and its worth over £40k now.The idea was to sell it once it equals the mortgage left and pay it off.His partner is a teacher,and he works for Aldi so about as secure as you can get for jobs.

Its taken me nudging though for them to understand that these rates arent normal and that 6% mortgage rates would see their mortgage really jump.You can see why most young people who dont have the kind of advice we on this thread understand can get themselves in lifelong debt.

[Boon]

Did you gift your son the silver or did he purchase it on his own?

I kind of wish I had this kind of financial education at the same age, I was blowing money on all types of rubbish at the time. 

I don't know why it never occurred to me, at a young age my own thoughts were that everything would sort itself out in the end and everyone rises to senior level raking in six figures. Unfortunately life is unfair.

[Don Coglione]

Just now, Cattle Prod said:

Same here. I don't know about you, but I thought I was immortal when I was 21, and no one told me otherwise!

Bit of an existential tangent, but is that necessarily a bad thing? Settling down at 20 years old isn't for everyone; if the wheels come off (not a slight on your son, DB!) then the plan can unravel very quickly. For some, at that age, it is better not to have a plan and simply go with the flow.

[feed]

.  

[Bobthebuilder]

One for @sancho panza.

https://www.bbc.co.uk/news/business-56330378

 

[leonardratso]

7 minutes ago, Bobthebuilder said:

One for @sancho panza.

https://www.bbc.co.uk/news/business-56330378

 

its the beko of metal producers.

wonder if mr arse lick was involved in that trade as well.

Owner: Arçelik A.Ş.

[Lightscribe]

1 hour ago, Boon said:

Did you gift your son the silver or did he purchase it on his own?

I kind of wish I had this kind of financial education at the same age, I was blowing money on all types of rubbish at the time. 

I don't know why it never occurred to me, at a young age my own thoughts were that everything would sort itself out in the end and everyone rises to senior level raking in six figures. Unfortunately life is unfair.

Unfortunately would of completely ignored any such advice from teens even up to my late twenties with a lot of capital in my pocket from selling my house I had at the time.

I only had one focus. And it was with the wrong head.

 

 

[Hancock]

2 minutes ago, Lightscribe said:

Unfortunately would of completely ignored any such advice from teens even up to my late twenties with a lot of capital in my pocket from selling my house I had at the time.

I only had one focus. And it was with the wrong head.

 

 

I remember when i was 17 speaking to someone a couple of years older who was going on about his pension and how much money he is putting away in it. I presumed he had something wrong with him for not spending every penny of his earning by Sunday night.

[Talking Monkey]

1 hour ago, Cattle Prod said:

Same here. I don't know about you, but I thought I was immortal when I was 21, and no one told me otherwise!

Yeah but at 21 as a bloke it's basically our job to think we're immortal

[Hardhat]

I pissed away several 10s of thousand in my early 20s. Wouldn't change it. Had a great life and loads of experiences. Always worked hard but got a lot of things out of my system at the same time.

A lot of people who have "followed the plan" and been financially responsible forever never get the chance to blow off steam and this can often lead to them having a bit of a wobble early 30s or even 40s and try to claw back the life they could have lived.

Still, I don't own a house. Depends what your priorities are.

[ThoughtCriminal]

Youth is wasted on the young. Truth. 

 

Let's face it, we all have the brains of a rocking horse at 21.

 

I was working the doors, up to my neck in debt, all the women I could handle and thought I was king of the world. 

 

I shudder now at the attitude I had to money back then. 

[Loki]

Anyone know what's going on with K + S (SDF)

I remember there was some financial irregularity fairly recently 

[Junction25]

BAT Share price  at £26 looks tempting -are people still holding stock for Dividend income ? 

Not bought any yet but looks a good price to buy 

[Castlevania]

22 minutes ago, Loki said:

Anyone know what's going on with K + S (SDF)

I remember there was some financial irregularity fairly recently 

Not sure. I thought it was due to releasing their annual results, but that’s not due until tomorrow morning.

[Loki]

1 minute ago, Castlevania said:

Not sure. I thought it was due to releasing their annual results, but that’s not due until tomorrow morning.

Thanks.  I suppose we're not really in fertiliser season yet either.  Still in the blue, anyway.