This is a place where people can swap ideas and information on investments and pensions.
The obvious purpose of doing this is to buy better Hifi systems above all!
Here is a video of Edward Chancellor, who is a financial historian and journalist and former investment professional discussing the role of interest rates:
Apparently, Chancellor has been having an ongoing debate with Martin Wolff of the FT for a while now.
The point where Chancellor makes predictions and gives advice on how to invest now comes at 1 hour 7 minutes into the video and is less than a minute long but contains four investment tips:
Emerging Markets ex-China
Japanese smaller companies
UK smaller companies
Value stocks are cheaper than “so-called growth stocks”
And earlier in the video interview Chancellor says that he thinks because the US market and especially US tech stocks are expensive by historical standards, he suggests that buying an index fund that is not weighted by market cap might be a good long-term investment as well.
Obviously when one makes an investment as an amateur it’s probably best to only use money that you can lose, and then to leave it in that investment for a long time so it has time to grow.
I didn’t listen to the 1 1/4hrs, but I listened to the 5 mins at 1 hour 7 minutes. It’s just the same old, same old typical vague opinion that most investors say. Also, the way he talks is very vague. He doesn’t even invest! He seems to have made money and doesn’t have the confidence to make more. So just keeps it. Just wants to sell a book. Nothing new here.
The bit of the video that you skipped contained an in-depth analysis and explanation of Chancellor’s theory of the role of interest rates in the global economy.
I found it very interesting, having never previously heard of him or his book.
I do not claim that his theory is sound or unsound, or that Martin Wolff’s contrary ideas are better are worse than Chancellor’s.
Indeed, at the end of the interview Chancellor admits that his book has polemic aspects/claims that may have been exaggerations - or words to that effect.
He also says part way through that his brother-in-law calls him a ‘stopped clock’ - perhaps because he is right when there’s a crash?
That is suggested by this quote from his Wikipedia page:
“Chancellor is noted for his prescient warnings of the last three major economic bubbles in his published works: Devil Take the Hindmost: A History of Financial Speculation (1999, the dot-com bubble), Crunch-Time for Credit? (2005, the credit bubble), and The Price of Time: The Real Story of Interest (2022, the everything bubble).”
As far as I can tell he is a bear (not bullish) because he takes a long-term view of the role of interest and believes that it will/should revert to the mean over time - but I’m not an economist and I barely know the basics about the crucial role interest rates (and central banks) in the global economy.
All I can say is I invest into funds that are spread in each of the global markets sectors.
So;
Emerging markets fund.
North America fund.
Japan fund
Asia ex Japan fund
China fund
I used to have European and UK smaller companies too, but sold.
Saying all this, you have to choose a fund you think will do well. How does one do this? Does anyone really know?
I have two Japanese funds, because I thought Japan was going to bounce out of its 30 year lull. I got that right. The Nikkei has doubled in the last 5 years. One fund is doing ok, the other one did great up to 5 years ago, but didn’t follow the 100% Nikkei rise since and is 30% down from 5 years ago. A farce.
You can listen to every single analysis and still be no wiser.
Spread your investments, use your ISA allowance, use your pension allowance and be sensible.
I’m in my notice period for an ill-health retirement so ought to have an interest in thus but goodness me it has zero relevance. Bloke with a theory talks to another bloke with a theory.
You split your retirement funds so that you have some money locked away maybe for 10 years and some for 5. You use your ISA allowance in full and split it between Cash and Stocks and Shares using a ratio which reflects your attitude to risk. You gave an amount available for joy and and an amount available for emergencies. Did I miss nothing?
As it regards the success of this or that versus the other it’s overwhelmingly pot luck. Read up a little; make some decisions; keep an eye on the outcomes. If you are so obsessed you need to get down to this or that sector of market x for product y in country z then you are in serious danger of misunderstanding what retirement is and may as well waste your time equally well by going back to work.
The usual imprecise stuff, advocating diversification (in its widest sense) and keeping a ‘balanced’ view across global investment markets. Yes, you can choose not to weight-up/overly exposure yourself to tech (and the US market in general), but if you’d have done this, you’d have missed much of the market growth – and attempts to ‘call the market’ rarely end well.
It really is irrelevant. This fund could now take off or it could plummet. Past performance doesn’t mean too much (although a long term graph can give you some idea).
I invest in equity based funds. These are more risky, but the rewards can be higher. I haven’t split my investments equally in the list of market sectors above. I’ve always been more weighted to North America. There’s always been a view that the US is overvalued (especially techs), but this general opinion has been going on since about 1998! Even Edward said the US is not value in the video. Looking for value doesn’t necessarily mean you’re going to get a bargain. I have done very well from the US and won’t be selling any time soon.
If you know little about investing/pensions/stocks, I’d suggest reading all the usual articles and watching stuff like the video you posted. Don’t take any advice literally, just soak it up over weeks/months and things will be pretty clear.
A reason to use a good platform like Hargreaves Lansdown is that the research tools are very good. Plenty of advice, past performances and comparisons there.
The reason I took it upon myself to do my own pension/investment funds, is that after a few different financial advisors, each handling my pension funds, it took me about 15 years to realise they didn’t listen to what I wanted, the fund choices were far too safe/stale and after a 10 year period, they went no where.
Of course you might also choose ethical investment funds as a category. The definition of ‘ethical’ is complex (our IFA helps define my choices on this every year) but they are a significant category of investment that might suit your personal philosophy. It does for my wife and I, and over many years they have performed well for us too.
On a broader note a good IFA who genuinely understands your needs, wishes, attitudes to risk etc is an asset I think, especially if you are not hugely motivated or equipped to make individual decisions without specialist advice. We have been lucky enough to have a 30+ years relationship with ours.
Nor should you, unless they have a track record of very strong relative to market performance, to earn such rewards – and I won’t go in to detail about some of the ‘houses’ which do this (and worse), as these quite often feature in the press, and not for positive reasons.
While you can stick with equity funds/even direct equities, with age, and the need for a modicum of capital security (assuming you’re not ‘minted’, so as to be able to absorb market reverses with impunity), then the quality advisors will recommend a blend of funds/investment and asset classes.
In France, the best investment is in the stone . You buy a house in central Paris, you rent it for 10 years. You sell it. You gain generally 300 k for a 600 k house after 10 years. 8% interest, with no risk.
