Savings and Investments thread

PragueAddick

Maybe worth a read before y'all sell up to join hard working entrepreneurs like Matt and Jade Southall in Dubai.😉 Full article in PDF upload

Huskaris

PragueAddick said:

Maybe worth a read before y'all sell up to join hard working entrepreneurs like Matt and Jade Southall in Dubai.😉 Full article in PDF upload

I watched a very good TLDR News video saying something similar and I largely agreed with it. I would add though that things like the terrible handling of the budget is one of the main reasons the economy shrank in latest figures. Consumers and businesses have a real lack of faith, but thankfully the bond markets are holding strong.

Having said that, I don't think the entrepreneurs/millionaires are leaving (they're actually not, but if they are good we hate them anyway etc) because of the state of the economy, they are leaving because the taxation laws for foreign millionaires make no sense (taxed on global income means double taxation, inheritance tax on global assets rather than just UK assets etc). A few have also said because of safety. Not because London is a crime ridden hellhole like some bot accounts shilling from Africa would have you believe, but because places like Dubai are incredibly safe. 

I'd rather shit in my hands and clap than move to Dubai to be fair, but I could see myself moving to Milan. Places without crime tend to come with the flip side of being soulless oppressive hellholes. 

Southbank

PragueAddick said:

valleynick66 said:

PragueAddick said:

A while ago @bobmunro made a quick comment that even money market/cash funds are not risk-fee. Which I noted, but filed under "inconvenient truths". Today in the FT the deliberately controversial punter-commentator Stuart Kirk has expanded on that, prompting some very interesting BTL comments.

So it's good to note that (and I didn't see anyone make much of this here) the bank deposit guarantee level has been quietly raised from 85k to 120k. (It will be interesting to see if Europe follows suit, so far I have seen not a whisper on it)

The question is, if you use these funds long term, as I am now doing, maybe it's worth de-risking further and switching some of those funds into banks like Charter Savings. You lose maybe 0.5% in returns by doing so, but your wedge will be protected by the government. 

If you can't read the article, Stuart Kirk sold all his £650k holdings in equity funds (!) and stuck it in one money market fund, Fidelity Cash, and only after he did it, decided to see what Fidelity Cash really holds. Answer: it ain't cash, not as we know it. 

So one way of looking at the maths on this is you can move an extra £35k into the safety net of FSCS but lose 0.5% of gain. 

That’s about £175 than prior to December when the limit changed. 

I’m not sure I see why that sum would be the deciding factor?

Isn’t this really that the money market funds are not as close to cash as you might have thought and really the change in the FSCS limit is just an aside - the overall risk is greater than the 0.5% benefit is really the concern?

It's about sleeping well at night, at a senior age. I progressively de-risked my SIPP and to a lesser extent my non-SIPP funds and shares account, by removing excessive holdings of the Big Seven tech stocks, often lurking in funds that have ostensibly a much wider re-mit. I dumped the proceeds in the  money market funds. It means that my SIPP is now slowly chugging along regardless of what happens in la-la land. However if things get even more insane, even those funds could take a beating. Actually I have just been offered to renew a one-year bond with Investec at 4.51%, which is pretty much what the MM funds are delivering - and I have to remember the platform fee charge to H-L as well as the (minimal) fund fees. My priority is to hang on to what I have (because I wish to spend some of it while I can enjoy doing that). If you are 20 years younger than me your priorities and risk evaluation will be different. The MM funds will probably be the last funds to tank, but if everything tanks then government guaranteed bank accounts delivering 4.3-4.5% will be a safe harbour I'll be grateful for.

Incidentally my de-risking involved  selling chunks of my tech funds progressively as the market rose (another 5%, another chunk sold). Currently the two funds remain a shade below the last time I sold, on 29 October. I still have more to sell if they kick on another 5%, but so far they are unable to even get higher than the last time I sold. Something, or nothing? Stuart Kirk thinks its something, and so apparently does Warren Buffet, who has been busy selling his Apple holdings.

But buying Google