Credit deflation and the reflation cycle to come (part 3)

[WICAO]

2 minutes ago, CVG said:

Right on cue, I got an answer from Vanguard about their allocations. I can't really complain as it was never likely that they would come up with something based on DOSBODs allocation. My wife wouldn't even log on, let alone balance out any portfolio once a year (doesn't even do online banking - I have to buy her knickers from M&S myself online!). I might just have to bite the bullet and hope that I'll mitigate possible losses by averaging in over a period of years. My only other hope is that interest rates rise and I can just buy a single long dated gilt to generate the necessary income.

 

"Thank you for getting in touch!

The LifeStrategy funds we offer on the UK platform are mutual funds structured as fund of funds. With this in mind, the LifeStrategy funds are sophisticated and combine multiple individual index funds into one fund portfolio, giving you access to thousands of shares and bonds in a single investment. This is therefore why the LifeStrategy fund has exposure to a wide range of countries and asset classes and further information on each LifeStrategy fund can be found in the 'Key Investor Information Document (KIID)' on the right-hand side of the fund's information page. 

It is worth noting that the LifeStrategy fund have a home bias to the UK for both the equity and bond portfolios, the remaining assets are then weighted according to the global market cap. LifeStrategy concept can be thought of as being based on market global cap with triple overweight of home country (UK) portion. The LifeStrategy funds are reviewed by an investment committee on an annual basis.

Further information can be found via the links below, including a KIID for one LifeStrategy fund.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds

https://www.vanguardinvestor.co.uk/rs/gre/gls/1.3.0/documents/1277/gb

I hope this clarifies and is a useful guide."

I know it's running very much swimming upstream in this thread but for a UK investor who wanted to be hands off a LifeStrategy fund of the appropriate '% equities' might just do the trick.  Then just sit back and collect the dividends assuming they bought the income and not accumulation variant.

All eggs in one basket would be one of the big reasons I wouldn't do that but maybe 5 buckets with LS being one would certainly simplify things.

Maybe of interest https://monevator.com/vanguard-lifestrategy/

[HousePriceMania]

5 minutes ago, Green Devil said:

Can I play too?

Bid 295p on 100 shares

 

 

I will be selling these to the greater fool later today....any offers ?

[Green Devil]

1 minute ago, HousePriceMania said:

 

 

I will be selling these to the greater fool later today....any offers ?

You could hit my bid at 295p? 

[HousePriceMania]

34 minutes ago, Hancock said:

My thoughts now are its better to have a house to pass on, than some shares.

In hindsight it'd have been the best place to stick money from 2020, when rent is considered.

House, shares, does it matter ?

Depreciating crumbling asset that can be heavily taxed over easily transferable shares that can pay the rent.

Housing is not the problem here, it's the instability of their system that poses a risk to us all.

[WICAO]

7 minutes ago, HousePriceMania said:

The point I was trying to make is, it's a gamble not investing right now.  The rampant inflation and 0% IRs has impacted my retirement and financial security/planning much more than any lose on any shares I own could ever have.  Sunak and the central bankers are to blame for those, that is not playing the victim care, that's fact. I personally dont see them acting to bring down inflation any time soon so I am acting to protect myself.  Sunak is positioning himself to be PM, yet another ex-GS banker in a position of power.  Slightly worrying I'd say.

It would be unwise of me not to be moving money into shares give then evidence of my own eyes.

I have a clear plan in mind:

10% holding in shares

10% in PMs/Tangible assets.

15% in index linked bonds

5% in pensions

10% in foreign property

50% in UK property + 40% Mortgage debt.

When bond rates hit 10%+ start selling out shares and moving into bonds, that should give me a comfortable pension.

The main risk to my wealth is not the Russian Government, it's the British government. 

Oh, I agree cash is a terrible way to store wealth ... until it's king.  I'm aiming for 3 years of expenses in cash.  Right now I'm well above that but the house build will eat all the excess.

[WICAO]

Just now, HousePriceMania said:

House, shares, does it matter ?

Depreciating crumbling asset that can be heavily taxed over easily transferable shares that can pay the rent.

Housing is not the problem here, it's the instability of their system that poses a risk to us all.

Why not have it all - a home to live, a globally diversified pile of shares, some precious metals, some bonds, some REIT's and even some cash that's knowingly eaten by inflation.  All invested tax efficiently with low product and wrapper expenses.

[Democorruptcy]

1 minute ago, HousePriceMania said:

House, shares, does it matter ?

Depreciating crumbling asset that can be heavily taxed over easily transferable shares that can pay the rent.

Housing is not the problem here, it's the instability of their system that poses a risk to us all.

Builders up today in a falling market. Ukranians putting more pressure on housing, 'Help to Refugee'?

[belfastchild]

Just now, Democorruptcy said:

Builders up today in a falling market. Ukranians putting more pressure on housing, 'Help to Refugee'?

Bidding for rebuilding contracts so soon?

[Democorruptcy]

3 minutes ago, belfastchild said:

Bidding for rebuilding contracts so soon?

Rebuilding? Has Putin started bombing us already?

I meant we have relaxed our visa rules for Ukranians coming here.

[HousePriceMania]

10 minutes ago, WICAO said:

Oh, I agree cash is a terrible way to store wealth ... until it's king.  I'm aiming for 3 years of expenses in cash.  Right now I'm well above that but the house build will eat all the excess.

Sensible, bit I think I'd prefer it to be 1 year + 2 years worth of bog rolls and beans 

This thread is a bit of a roller coaster at times but I think we all know that doing nothing right now is the wrong choice.

 

13 minutes ago, Green Devil said:

You could hit my bid at 295p? 

Offer me 100 

[HousePriceMania]

30 minutes ago, belfastchild said:

If its in your isa, crystalise the losses, transfer to sipp and get the tax back.

Isn't it better to crystalise your gains then get even more of someone elses tax back ?

[DoINeedOne]

3 minutes ago, HousePriceMania said:

Offer me 100 

100 Loo Rolls?

[HousePriceMania]

 

 

[WICAO]

1 minute ago, HousePriceMania said:

Sensible, bit I think I'd prefer it to be 1 year + 2 years worth of bog rolls and beans 

This thread is a bit of a roller coaster at times but I think we all know that doing nothing right now is the wrong choice.

Maybe some of them as well.    We certainly don't seem to be heading into deflation anytime soon so possibly a good investment.

I'm not saying do nothing.  I'm saying just do what that plan that was written down long before current events started tells you to do.  For me it's currently to do nothing but very soon dividends will build up and I'll have to do something with it.  I know that will be to buy my most underweight against that written down plan asset class.

[Loki]

DXY and 10Y ticking along quite nicely, not bothered at all

[Green Devil]

5 minutes ago, WICAO said:

Maybe some of them as well.    We certainly don't seem to be heading into deflation anytime soon so possibly a good investment.

I'm not saying do nothing.  I'm saying just do what that plan that was written down long before current events started tells you to do.  For me it's currently to do nothing but very soon dividends will build up and I'll have to do something with it.  I know that will be to buy my most underweight against that written down plan asset class.

Need to be more specific.

Deflation of risk assets.

Inflation of living costs/energy. 

Stagnation of wages 

Just about as bad as it could be (apart from nuclear war perhaps- )

[HousePriceMania]

1 minute ago, WICAO said:

Maybe some of them as well.    We certainly don't seem to be heading into deflation anytime soon so possibly a good investment.

I'm not saying do nothing.  I'm saying just do what that plan that was written down long before current events started tells you to do.  For me it's currently to do nothing but very soon dividends will build up and I'll have to do something with it.  I know that will be to buy my most underweight against that written down plan asset class.

I'm not in a position to do nothing this year and have to be active.

I'm nearing my limit for buying shares now, at that point I will stop buying, 10% in this contrived market is more than eough risk foe me.  I sold out last year but realised after a month or two that I should have held and bought more given the inflation outlook, the way things are now I'm happy with my choices, even if we see the BK.   

I have moved onto looking for a property abroad.  Have decided to go for a ski apartment as this will give me a modest income, move money out the £/Banking system and with inflation I am looking at saving £12-15K skiiing holiday cost per year which means an effectively +ve yield, I will try and put it in my children's names too so avoiding inheritance tax. If you dont ski that might seem mad and frivolous but what's life without a bit of excitment/happiness.

After that the plan is to buy 1 or 2 houses in the UK but I wont deal with that till After October, the market is broken and there is a shit storm coming, anyone who thinks otherwise is deluded.

Deflation might still come, I can see one or two scenarios where this might happen but if it does, I am still fluid enough not to lose out. if I see even a modest crash in house prices at the end of the year I'll be a very happy man.

The one think I have learned the most since 2000 is that:

1) Being in the right asset class at the right time is important

2) Buying at the top of a bubble is a bad idea

3) Selling at the bottom of a bubble is a bad idea

4) Compound interest is your friend.

 

[JMD]

1 hour ago, Democorruptcy said:

The number of posts here are correlated to big news in the markets. The West weaponising the financial markets due to the first war in Europe for years is quite big to be fair. One way to cut the number of posts is to put on 'ignore' those people classed as "gamblers".

Exactly right. Are recent events 'the' inflexion point?                                                                                            ...And maybe Polymetal et al are mere 'appetizer' investment trades, important in and of themselves perhaps, but any mistakes made are vital to digest - in order that we ourselves don't become the 'main course' (feasted upon by the zombie bankers)!!          (Hmm, it sounded far better in my head, but I'll post anyway)

[WICAO]

3 minutes ago, Green Devil said:

Need to be more specific.

Deflation of risk assets.

Inflation of living costs/energy. 

Stagnation of wages 

Just about as bad as it could be (apart from nuclear war perhaps- )

A reduction in the price of bog rolls and beans when measured in the currency I have in my pocket 

On a more serious note:

- So far since I started keeping score just before the GFC my risk assets have compounded at an annualised real 3.3% so deflation over the long term (yet?).

- My living costs are where they were in 2017 but I have a plan in play to reduce those significantly.

- My energy costs were £48 last month but I have a plan to reduce them as well.

- Wages no longer matter.

Educate oneself, build a plan, only change the plan because of that developing education, stay the course, ignore the noise and with a fair wind life might just turn out ok...

[HousePriceMania]

1 minute ago, WICAO said:

- My living costs are where they were in 2017 but I have a plan in play to reduce those significantly.

 

My day to day living costs have pretty much halved, a combination of not driving to work and shopping in Lidl.

I'm not saying inflation is not there, it is, but a lot of it cane be avoided for a lot of people simply by swapping Tesco/Sainos/Waitrose for Lidl/Aldi/Iceland. I stopped going to the pub and I'm paying less for a bottle of wine now that I did in 2000.

 

[WICAO]

14 minutes ago, HousePriceMania said:

I'm not in a position to do nothing this year and have to be active.

I'm nearing my limit for buying shares now, at that point I will stop buying, 10% in this contrived market is more than eough risk foe me.  I sold out last year but realised after a month or two that I should have held and bought more given the inflation outlook, the way things are now I'm happy with my choices, even if we see the BK.   

I have moved onto looking for a property abroad.  Have decided to go for a ski apartment as this will give me a modest income, move money out the £/Banking system and with inflation I am looking at saving £12-15K skiiing holiday cost per year which means an effectively +ve yield, I will try and put it in my children's names too so avoiding inheritance tax. If you dont ski that might seem mad and frivolous but what's life without a bit of excitment/happiness.

After that the plan is to buy 1 or 2 houses in the UK but I wont deal with that till After October, the market is broken and there is a shit storm coming, anyone who thinks otherwise is deluded.

Deflation might still come, I can see one or two scenarios where this might happen but if it does, I am still fluid enough not to lose out. if I see even a modest crash in house prices at the end of the year I'll be a very happy man.

The one think I have learned the most since 2000 is that:

1) Being in the right asset class at the right time is important

2) Buying at the top of a bubble is a bad idea

3) Selling at the bottom of a bubble is a bad idea

4) Compound interest is your friend.

 

Can you tell me what the right asset class is right now?  I freely admit I have no idea.

Are we at the top or bottom or somewhere in between right now?  Again, I freely admit I have no idea.

Agree compound interest is very much your friend unless you're loaded with debt from over extending on consumerist tat.

Why do you want so much residential property?

...and £12-15k on a skiing holiday per year.  Holy shit, I can live a good life on that amount.

[HousePriceMania]

This'll confuse a lot of poly investors 

 

https://www.thisismoney.co.uk/money/share-investing/article-10552685/Anglo-Russian-miner-Polymetal-release-year-figures.html

 

"All eyes will be on Polymetal International when the Anglo-Russian miner releases its full-year figures on Wednesday. "

 

They are nailed on to post HUGE profits, what will people do then ( if the shares have not become worthless ) ?

[JMD]

1 hour ago, DoINeedOne said:

Maybe others are gambling but we all invest in different ways, POLY is not even 3% of my net worth

And my rules are i allow 10% for speculation or lets say a gamble but even that 10% can't just be one thing

 

 

 

 

Yes, trading, investing and speculation (oops I nearly mentioned BTC, but think I got away with it?!) are three different things. For success, each comprise different risk/rewards, time frames, levels of attainable/required knowledge. Plus your point about allocation is absolutely crucial... moderation in all things, as the Greeks liked to say.       

[Sidd]

Dreaded US markets open and metals start poo'ing. They just wont allow it to rise meaningfully.

[WICAO]

2 minutes ago, HousePriceMania said:

My day to day living costs have pretty much halved, a combination of not driving to work and shopping in Lidl.

I'm not saying inflation is not there, it is, but a lot of it cane be avoided for a lot of people simply by swapping Tesco/Sainos/Waitrose for Lidl/Aldi/Iceland. I stopped going to the pub and I'm paying less for a bottle of wine now that I did in 2000.

I agree that for many work costs can be significant.  Something that can however be managed with planning.

I now only drink alcohol infrequently.  Not judging anyone but I know it's working for me personally.

I actually visit 2 supermarkets when I do my shopping - a discount supermarket and a Tesco equivalent.  Good quality food that agrees with me from an ingredients perspective is what I look for these days and I can't get that from just a 'Lidl' equivalent.