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where to stick £78 000 to at least retain it's value for 6 years
tiptopfund tiptopfund
Posted: 30 May 2017 07:35:50(UTC)
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chubby bunny;47286 wrote:
[
That's funny, I thought you were based in Estonia. Are you actually J. Bryan Scott from San Francisco, or did you just copy and paste those two paragraphs, without reference, from his answer on Quora ( https://www.quora.com/Ho...ver-the-next-few-years#!n=12 ) in order to build up your post count and make yourself seem more legitimate?


Yes, I copied and pasted the answer that seems very informative and relevant to the question. What's the problem? There is no copyright on Quora, its messages can be distributed without references.

"Subject to these Terms, Quora gives you a worldwide, royalty-free, non-assignable and non-exclusive license to re-post any of the Content on Quora anywhere on the rest of the web provided that the Content was added to the Service after April 22, 2010, and provided that the user who created the content has not explicitly marked the content as not for reproduction.."

https://www.quora.com/about/tos
1 user thanked tiptopfund tiptopfund for this post.
eain on 03/06/2017(UTC)
PaulSh
Posted: 30 May 2017 07:49:31(UTC)
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Some nice selective quoting there, Mr. Tiptop, you missed the bit that says:

"...and provided that you ... attribute Quora by name in readable text and with a human and machine-followable link (an HTML <a> anchor tag) linking back to the page displaying the original source of the content on http://quora.com on every page that contains Quora content"
2 users thanked PaulSh for this post.
dyfed on 30/05/2017(UTC), Mickey on 30/05/2017(UTC)
tiptopfund tiptopfund
Posted: 30 May 2017 09:21:26(UTC)
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You're right, I edited my original post

Thank you!
Alan Selwood
Posted: 30 May 2017 11:35:11(UTC)
#41

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Back in the real world, meanwhile, I draw everyone's attention to an article in Today's Daily Telegraph:
http://www.telegraph.co....h-drawn-4pc-would-left/

This shows a back test of invested capital starting from the Pensions Freedom Day in April 2015, with various investment strategies compared as to volatility, amount of maximum loss during the period, and end value.

It is, of course, a very short period, but as I am sure KL will be pleased to hear, it suggests that a multi-asset approach and withdrawal only of the natural yield produced the most stable while profitable result, only beaten by the 100% equity version in terms of end profit, but with a much more anxiety-creating loss along the way.

The Permanent Portfolio / Crawling Road approach is still holding its head high!
(Even without rebalancing along the way).
10 users thanked Alan Selwood for this post.
dyfed on 30/05/2017(UTC), Joe Soap on 30/05/2017(UTC), S Dobbo on 30/05/2017(UTC), Mickey on 30/05/2017(UTC), c brown on 30/05/2017(UTC), King Lodos on 30/05/2017(UTC), Money Spider on 30/05/2017(UTC), markus on 30/05/2017(UTC), Guest on 31/05/2017(UTC), Guest on 16/07/2017(UTC)
Mr Helpful
Posted: 30 May 2017 15:00:50(UTC)
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Sara G;47269 wrote:
No one has mentioned infrastructure funds or P2P... given that there is no entirely risk-free solution, these might be worth considering as part of the mix.

I don't know much about P2P, but infrastructure funds may offer stable and rising income. Here's one yielding 4%, and in the comments you'll see other recommendations:

http://citywire.co.uk/mo...structure-fund/a1000523





The OP has not totally informed us about deployment of total assets, so we are guessing slightly?
Presumably Bonds are not held?
And this investor finds difficulty choosing any Bonds at present.
We know there is Cash and Income ITs so to add Alternative Income Generating Assets such as Infrastructure is indeed an option.

Like perhaps the OP, with more than suffficient Stocks and with the dodgy Bond situation, have over the last few years been drawn to this alternative area for income and maybe lower Stock correlation.

So Yes; Infrastrucure does seem a worthy candidate.
We hold HICL, BBGI, INPP, 3IN ; of which a few have performed well beyond our wildest dreams. However when a Stock collapse does eventually occur, we will watch with interest to see how these Infrastructure positions hold up.

P2P is troubling. Seems to be a race to the bottom with lending rates.
And like the SQN difficulties mentioned in another thread, (which might nevertheless be worth further consideration at the new price) :-
What type of borrowers are we dealing with?
Why can't they borrow cheaper elsewhere?

Also in the Alternative Income Area that the OP might investigate :-
Ground Rents : GRIO
Real Estate (unless undue direct exposure already held) : ESP, RGL, RDI, BBOX, HSTN
Renewables : FSFL, BSIF, UKW, TRIG (thanks for the heads up on that last one from a Citywire poster).
2 users thanked Mr Helpful for this post.
Sara G on 30/05/2017(UTC), Cyrus Zaydan on 02/06/2017(UTC)
Deano
Posted: 30 May 2017 18:33:47(UTC)
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One investment type not mentioned is with profit bonds. I appreciate they are a form of multi asset investment but they tend to smooth out the peaks and troughs of market movements over time (so the sales brochures say!)

Whilst I am personally not a big fan of them due to the opaque nature of them (charges, investments and how the smoothing is done), if cautious investments and preservation of capital is what you are looking for then maybe they are worth doing your own research on.
Alan Selwood
Posted: 30 May 2017 20:54:22(UTC)
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Deano;47352 wrote:
One investment type not mentioned is with profit bonds. I appreciate they are a form of multi asset investment but they tend to smooth out the peaks and troughs of market movements over time (so the sales brochures say!)

Whilst I am personally not a big fan of them due to the opaque nature of them (charges, investments and how the smoothing is done), if cautious investments and preservation of capital is what you are looking for then maybe they are worth doing your own research on.


They can't create the smoothing out of thin air. Usually, the insurance company keeps back more than enough in the good years to bolster returns in the poor years. Somehow it never seems to give back all the profits to the bondholders, on the grounds that 'we might have a bad year in the future'. Thus they 'kick the can of full returns' indefinitely down the road with the result that the investor never gets all he could have had by investing directly and with visible rather than opaque charges, and no restrictions on cashing in at any time, whereas the with-profits fund will get sealed off in times of market meltdown.

Such a fund is also designed for the long term, and unlike the DIY approach, can't be subdivided into cash you can draw off and equities you leave in place to build up for the future. It is an amorphous blob where you can't see the inside or mould it to your personal shape. Not for me!
2 users thanked Alan Selwood for this post.
Deano on 31/05/2017(UTC), Guest on 16/07/2017(UTC)
eain
Posted: 02 June 2017 05:11:41(UTC)
#34

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BOB 2;47289 wrote:
Make your list out, and wait for the correction , it may be this week or next month
all is needed is a bit of bad news, and there is enough of that around.
i see all markets as over priced at the moment. so it will not take much to bring the roof down
ok i mite be wrong but unless i see a outstanding bargain i am holding back/cash



I think with markets looking toppy this will be my approach - thanks for this
huudi
Posted: 02 June 2017 06:28:17(UTC)
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Joe Soap;47262 wrote:
It's just my opinion, of course, but to be advising anybody who needs access to his money in 5 or 6 years time to invest in anything other than cash is very bad advice. All assets are inflated in price right now. If you need the money it is a very bad idea to do anything with it that can result in value dropping as is very possible with any investment right now.


Correct, no investment( trust or otherwise) is safe especially in the next two years, if you take this route remember it is a gamble.
Banks pay little interest because HMG keep printing them 'free' money.
Gilts, Treasuries or NSI could be frozen in times of panic and lets face it, a country that has to 'print' money to stay afloat is bankrupt.

(1) I suggest offshore banks for safety.
(2) 'Under the bed' that is if you can get the cash, gold is preferable as no matter how well you seal it, paper may erode in a short time, maybe new Fivers?
(3) Spend it now, you may not live to have a final salary.
King Lodos
Posted: 02 June 2017 06:35:22(UTC)
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eain;47453 wrote:
BOB 2;47289 wrote:
Make your list out, and wait for the correction , it may be this week or next month
all is needed is a bit of bad news, and there is enough of that around.
i see all markets as over priced at the moment. so it will not take much to bring the roof down
ok i mite be wrong but unless i see a outstanding bargain i am holding back/cash



I think with markets looking toppy this will be my approach - thanks for this


It's about the worst advice you'll ever get. Be my guest.
King Lodos
Posted: 02 June 2017 06:43:14(UTC)
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huudi;47455 wrote:
Joe Soap;47262 wrote:
It's just my opinion, of course, but to be advising anybody who needs access to his money in 5 or 6 years time to invest in anything other than cash is very bad advice. All assets are inflated in price right now. If you need the money it is a very bad idea to do anything with it that can result in value dropping as is very possible with any investment right now.


Correct, no investment( trust or otherwise) is safe especially in the next two years, if you take this route remember it is a gamble.


Well throughout history, I don't think you'll find even a one year period in which equities, bonds and commodities have all fallen (relative to cash).

Value's always flowing into something .. It's like rock pools .. The water can't really go anywhere, because to sell any asset you need a buyer, and whatever's being bought and sold, demand somewhere is offset somewhere else.

So when you look at a Harry Browne portfolio, down years are quite rare (and very slight). Most people don't 'get' portfolio construction, and just think investing's about piling into stocks .. Well major European stock markets have done 50-60 year downturns – the idea 5 years is reliable for a positive return is nonsense.
1 user thanked King Lodos for this post.
Jon Snow on 02/06/2017(UTC)
huudi
Posted: 02 June 2017 07:20:43(UTC)
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The reality is, at any time, stocks can plummet .. That's why you're compensated for the risk of holding them .. Sometimes a correction is the start of 15 more corrections (a bear market) .. Sometimes bear markets last 60 years .. And very often, corrections just don't come:

http://www.econlib.org/library/Enc/art/lfHendersonCEE2_figure_041.jpg[/quote]

"Compensated for the risk of holding stock"? Tell me more, its new to me. Only the bookie makes money on falling stock prices.
Mr Helpful
Posted: 02 June 2017 07:29:31(UTC)
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huudi;47463 wrote:


The reality is, at any time, stocks can plummet .. That's why you're compensated for the risk of holding them .. Sometimes a correction is the start of 15 more corrections (a bear market) .. Sometimes bear markets last 60 years .. And very often, corrections just don't come:

http://www.econlib.org/library/Enc/art/lfHendersonCEE2_figure_041.jpg


"Compensated for the risk of holding stock"? Tell me more, its new to me. Only the bookie makes money on falling stock prices.[/quote]



The trouble with semi-log charts is that they are semi-log !!!

A 50% Stock drawdown will scarcely show as a blip.

Look at 1929 on when 80%ish was wiped off Stocks : Just a ripple !!!
But for the fully invested Stock investors living through those times, it was a life-changing disaster.


["That's why you're compensated for the risk of holding them"
]
As has been observed, if we were always compensated for taking risk
(I.E. increasing risk guarantees increased returns),
then risk would not be risky.

Instead it is suggested; increased risk equals a wider dispersion of outcomes
(albeit fortunately with a generally upward risk/reward slope).
1 user thanked Mr Helpful for this post.
Mickey on 02/06/2017(UTC)
kWIKSAVE
Posted: 02 June 2017 08:14:22(UTC)
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Premium bonds

National Savings Certificates

Cash ISAs

Fixed rate bonds

Bond type collectives
huudi
Posted: 02 June 2017 09:03:52(UTC)
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eain;47229 wrote:
Have £78000 sitting currently in cash. Looking to draw this down from age 55 until final salary pension kicks in when I am 60, I am currently nearly 49. So I need somewhere to stick this money to ensure it will retain it's value plus possibly a little growth. With inflation picking up I am worried about it loosing value, happy to wait for any pull back/correction in the market .

thanks for any sugestions


The simple answer after reading the advice given is that what you ask cannot be done, there will be risk.

"loosing value"? not losing value? I believe you mentioned a Teachers salary/pension....?
Bellabeck
Posted: 02 June 2017 13:21:48(UTC)
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There are some high risk suggestions on this thread.

I suggest half in National Savings & Investments - growth bonds
https://www.nsandi.com/i...guaranteed-growth-bonds

and the rest either in Premium Bonds or if you are prepared to take a little in the way of risk Personal Assets Trust PNL.
1 user thanked Bellabeck for this post.
MJPM on 02/06/2017(UTC)
S Dobbo
Posted: 02 June 2017 15:12:43(UTC)
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Arabella Tullo;47481 wrote:
There are some high risk suggestions on this thread.

I suggest half in National Savings & Investments - growth bonds
https://www.nsandi.com/i...guaranteed-growth-bonds

and the rest either in Premium Bonds or if you are prepared to take a little in the way of risk Personal Assets Trust PNL.


National Savings & Investments - growth bonds has £3k max per person.

Also I don't know why everyone suggests PNL over Trojan O, I would think PNL would fall further than PNL in a large correction or crash, it certainly did in 2008.
eain
Posted: 02 June 2017 16:53:20(UTC)
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huudi;47472 wrote:
eain;47229 wrote:
Have £78000 sitting currently in cash. Looking to draw this down from age 55 until final salary pension kicks in when I am 60, I am currently nearly 49. So I need somewhere to stick this money to ensure it will retain it's value plus possibly a little growth. With inflation picking up I am worried about it loosing value, happy to wait for any pull back/correction in the market .

thanks for any sugestions


The simple answer after reading the advice given is that what you ask cannot be done, there will be risk.

"loosing value"? not losing value? I believe you mentioned a Teachers salary/pension....?



My husband will be taking his teachers pension when I am 54, which means he will get a lump sum- annual pension about 20K and lump of £60k. My plan is to drawdown the £78000 over 5 years then take my teachers pension at age 60. It will be about £15 k per year plus £45K lump.

In many ways I could take some risk as we are covered - I liked the ladder of risk idea mentioned earlier and vanguard lifestrategy funds would work for this, but the SIPP is with H&L and they charge .45%, whereas the fees are capped for investment trusts. So I guess I need to work out and equivalent ladder but in Investment trusts. Any ideas how I could structure that- I may have more to add to the SIPP before summer 2018- possibly taking it up to £90 or 100K? There has been some really useful debate and advice on here - thanks for that all.
King Lodos
Posted: 02 June 2017 17:08:03(UTC)
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huudi;47463 wrote:
"Compensated for the risk of holding stock"? Tell me more, its new to me. Only the bookie makes money on falling stock prices.


This is worth understanding .. Bonds pay you for holding them because there's value in having immediate access to capital, rather than waiting for it .. So they're paying you for your patience.

And that value is basically productivity .. A government or corporation expects to be able to grow the value of invested capital at a higher rate than it's compensating you.

Why do stocks return more than bonds? If they were the same risk, we'd just bid stock prices up until they matched the returns of bonds .. The difference is risk .. And that gives a neat way to estimate returns – double the risk (e.g. 2x leverage) double the return .. Invest in higher risk stocks (value, small-caps) higher return, etc.

And people do make money on falling stock prices .. This is my easy explanation of shorting:

You go to a fruit & vegetable stall at a market .. Ask the guy if you can borrow a bunch of bananas, and you'll give him a bunch of bananas back at a future date .. Right now the price of bananas is £10/kilo, so you sell your borrowed bananas and pocket £10 .. Next week the price plummets to £5/kilo .. So you buy a bunch for £5, give it to the vendor you borrowed the bananas from originally, and pocket the £5 difference.


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Cyrus Zaydan on 02/06/2017(UTC)
King Lodos
Posted: 02 June 2017 17:16:14(UTC)
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Mr Helpful;47464 wrote:
The trouble with semi-log charts is that they are semi-log !!!

A 50% Stock drawdown will scarcely show as a blip.

Look at 1929 on when 80%ish was wiped off Stocks : Just a ripple !!!
But for the fully invested Stock investors living through those times, it was a life-changing disaster.


["That's why you're compensated for the risk of holding them"
]
As has been observed, if we were always compensated for taking risk
(I.E. increasing risk guarantees increased returns),
then risk would not be risky.

Instead it is suggested; increased risk equals a wider dispersion of outcomes
(albeit fortunately with a generally upward risk/reward slope).


But then two things that chart shows you: looking at total returns, stocks spend a lot of time making new highs that they never fall below again (for everyone waiting for corrections), and events like 1929 are extremely rare.

If you follow Harry Browne or build an All Weather portfolio that has a maximum 25% allocation to stocks, that 80% worst case scenario only becomes 20%, and with a simple rebalance you get a chance to buy stocks at generational lows.
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