Fairly recently I caused a bit of a stir on the Tweets when I suggested that People who have regular payment plans into Funds (normally Unit Trusts – see my ‘Funds’ page for definitions of what the different types of Funds actually are), might be wise to suspend the automatic payments prior to the Coronavirus problems when it is highly likely that we could see Stockmarkets really struggling.
I got a lot of flak for this and it is very understandable why because there are maybe some advantages of such drip-feeding over time; but for me personally, I wouldn’t do this at all. But then I am perhaps a different type of Investor to many others and there is an element of ‘Horses for Courses’.
In a recent TPI Podcast we talked at length about a potential Stockmarket Bubble and I also wrote a bit in a Weekend Charts Blog. Both times I think I promised to write a more detailed Blog specifically on the subject and in theory as I start writing, this Blog is intended to fulfil that commitment. You can find the Podcast here by the way:
First off I must make it very clear that I am not saying a Bubble is definitely going to happen; nobody can foresee the future (least of all me !!) and all we can realistically do is to assign probabilities to possible future outcomes. Using such an approach, I would guesstimate that perhaps a year or more ago, I would have said that a Bubble was a very low likelihood, perhaps something like 5 to 10%. The fact is that Stockmarket Bubbles are very rare and hence a low probability is appropriate, but with the various factors that I will get onto shortly, I would now say that the probability has risen to perhaps 15 to 20%.
Back in early 2017 my mate Phil wrote a couple of Guest Blogs about Peer-to-Peer (P2P) Lending which are very good as they describe in detail the ins and outs. Anyway, since then a lot has changed in the sector as it has matured and Phil has bashed out the following Guest Blog which updates where we are now. The original Blogs can be found at the Links below, and Big Thanks to Phil for providing this refresher,
There was a discussion recently on Twitter about PCF Group and my mate Paul Hawkins mentioned that he had some notes on PCF and kindly he agreed to whizz them over to me so that Readers could share his findings and thoughts. A big THANK YOU to Paul for sharing this stuff and saving me a lot of time creating a Blog at a time when I am quite busy. It’s much appreciated.
Paul is a very knowledgeable and successful Investor and you can follow him on Twitter where he puts out a lot of useful stuff. His handle is @Hawkeye_74
A few weeks back I wrote a ‘Week Ahead’ update on a Sunday night and I included a fair chunk of text on how Negative Interest Rate Policy (NIRP) was perhaps not one of the brightest ideas from the Central Banks. I am not sure why but I omitted a pretty key piece of information about the implications of NIRP for Cash and so I thought I would just knock this text up to address this serious deficiency !!
The previous Blog including my bit on NIRP can be found here - it might be worth reading this first, or refreshing if you have not read it for a while (it was written as one of the usual Weekly Charts Blogs but contains the NIRP stuff near the beginning):
My Summer 2015 Roadmap
**DO NOT BASE TRADING DECISIONS ON THIS TEXT - THIS IS MERELY FOR YOUR DELECTATION AND DELIGHT**
Markets have clearly got a bit more nervous as we move into June and the Greek problems seem to be creating a bit more worry in the Markets. Summer is always a difficult time for Markets and I always like to be heavily into Cash and/or, like this year, to have big Shorts on to Hedge my Long Portfolio.
I thought it might be helpful to Readers to give a view on how I intend to play things from here and it will help me get my thoughts clear and help my forward thinking. You may have seen from some Blogs and stuff that I very much like to be ahead of the game (hey, it’s essential if I really am going to beat the Bears), and having a Strategic Plan for the coming months is utterly vital I feel - it’s my Roadmap.
This Blog contains some general thoughts on how I think things will play out and how I am positioned.
The Danger in Bond Unit Trusts
I started off writing about Position Sizing but got a bit sidetracked due to the inclusion of Bonds within the sizing discussion. I have consequently written my view on Bonds at the moment.
Bonds are an Asset you can buy that pays you a Coupon. You are effectively lending money to the Bond issuer (the borrower) and they pay you back the value of the Bond at the end of the Agreed Life of the Bond (the Maturity) - assuming all goes well and they remain solvent. In addition, you get paid the Coupon every year up to Maturity. In a way you can think of it like a Share with a Dividend - but the Share has the potential to provide a rising dividend payment and Capital Gains. If held to Maturity, a Bond will only pay back the purchase value and you will have received the steady Coupon payment each year.
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