Attitude to Fixed Income in 2014

[milanbenes]

WAPS

I don't invest as such, as I inherited land I'll never use but it's continued to increase in value over the years. It's the one thing they're not making unless someone figures out how to raise the sea floor.

Every time a piece of Dover falls into the sea my portfolio increases.

Scooter,

you mean lower the sea floor ?

Milan.

[milanbenes]

First, a confession. I'm a newbie investor.

That said, I'm finding the task of building a balanced portfolio somewhat bewildering and the more research I do, I find I have more and more unanswered questions.

Putting equities aside for a minute, I believe that fixed income funds are generally seen as a safe hedge against stock market turmoil and it's recommended that a substantial proportion of ones portfolio is made up of fixed income funds (the amount depending on your age, attitude to risk etc).

What's inneresting at the moment is that we seem to be at the end of the longest fixed income bull market for decades with the innernet abuzz with warnings of avoiding government and corporate bond like the plague. Let's face it, with innerest rates set to rise multiple times over the next couple of years and hence bond yields going up, only a fool would dabble in long term gilts.

The received wisdom appears to be that the way to go at the moment is to invest on strategic bond funds where the fund manager has the flexibility to invest in a range of fixed income assets accordingly.

Just wondering if any of you is rebalancing your portfolio at the moment and what is your approach to fixed income?

Back to equities though, a poster here kindly recommended some excellent funds (from a past performance point of view) but I can't help feeling I'm buying at the top of the market. I'm tempted to fill my more volatile portion of my basket with funds that deal with assets that are very much on the downward curve. Gold springs to mind. Also tempted on a bit of Japanese exposure. Gonna give Europe a wide berth completely with events in Ukraine and all that.

a fuel and his money

Milan.

[tomtomagain]

+ 1
Friend, paid into a pension, when it came time to retire worth only half what he was expecting.
Milan.

He should have been monitoring it more closely. It didn't just become worth 50% less overnight.

[Gittins Gal]

Buy land, property etc.
Don't trust a piece of paper.

Friend, paid into a pension, when it came time to retire worth only half what he was expecting.

If he had bought a house, paid a mortgage with the money, house would be worth twice what he was expecting. In fact he would have paided the mortgage off quicker than the pension.

Hmmm... Inneresting.

And to all of those who did a WAPS to this comment, I'd just like to point out that money made through property ain't protected by a wrapper like an ISA.

Also, house prices go down just like share prices and, as an asset, are a lot less liquid.

[milanbenes]

Hmmm... Inneresting.

And to all of those who did a WAPS to this comment, I'd just like to point out that money made through property ain't protected by a wrapper like an ISA.

Also, house prices go down just like share prices and, as an asset, are a lot less liquid.

financial products are for those who dont have enough to buy property

simples

Milan.

[Unix]

Hmmm... Inneresting.

And to all of those who did a WAPS to this comment, I'd just like to point out that money made through property ain't protected by a wrapper like an ISA.

Also, house prices go down just like share prices and, as an asset, are a lot less liquid.

They don't go down like share prices, share prices can drop to zero within a few weeks (see Lehman's) for reasons that aren't clear to the retail investor until its too late. House prices may dip a few % here and there but they have intrinsic value. Also ISA's are great but they have very limited return and capped investment per year. Whereas if you choose the correct property you can make 20% in a year or more.

Pensions are for the gullible masses who shouldn't really be considered intelligent life. If you're lucky you will get back what you put in.

[tomtomagain]

Whereas if you choose the correct property you can make 20% in a year or more.

That is tosh. You might make 20% a year on some years, but you will not make 20% a year for the next 20 - 30 years. And that is usually the investment horizon for most people.

If you believe that housing is a one way bet then take a trip to Ireland.

Property carries risks as much shares/bonds/gold. If you don't see the risk in property then you probably should not be invested in it.

[IR35 Avoider]

First of all a disclaimer: Never believe, trust or follow anyone else's financial advice without doing your own research. And that includes my advice.

I think that the Vanguard Lifestrategy fund is an excellent choice.
(Vanguard LifeStrategy funds turn passive investing catatonic)

It gives you instant global diversification in equities and bonds and automatic re-balancing to keep you within the limits you have decided are right for you.

I understand where the OP's is coming from with his question and agree with this response, that a Vanguard lifestrategy fund would be a very good option.

[Unix]

That is tosh. You might make 20% a year on some years, but you will not make 20% a year for the next 20 - 30 years. And that is usually the investment horizon for most people.

If you believe that housing is a one way bet then take a trip to Ireland.

Property carries risks as much shares/bonds/gold. If you don't see the risk in property then you probably should not be invested in it.

Who said 20% every year? You make the money when you buy the property.

[tomtomagain]

Who said 20% every year? You make the money when you buy the property.

You said : "Whereas if you choose the correct property you can make 20% in a year or more."

And considering this is a thread on investing I assumed you were implying a substantial return each year.

I don't know if you are aware but you can make 20% or more in a year on an equity if you choose the right one too.