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I'm touting for a bit of guesswork here, from anyone with a financial opinion.

Given the historical performance curves of the FTSE 100 and S & P 500 indices over the last few years (up to 5 years), does anyone have an opinion on where the indices are likely to be in (say) the next 2 to 5 years?

My gut feeling is that whilst the next 12 months may see a stagnation or even a drop, the trend has to be upwards over that length of time. Any thoughts?

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Hi  Powerdesal

FTSE a bit 'iffy'  S&P better, Global 500 best.  We're waiting for the markets to move - 6 months or so.  

UK shares ?  Inflation, big tax rises ahead.  GBrown & co now spending more on welfare payments (benefits)  than they are getting in from (income) taxes. Deficit of nearly £25 billion. Other taxes around for GB, but NHS, education, defence, police, roads, quangos. etc etc all have to be paid for 

A chnage in direction is needed to improve the future of UK Plc.   Too much socialism,; too little engineering and real things to make and export; too many useless 'degrees' not enough scientists/engineers; too many wanting handouts  and so on  ...

Regards

Tegwini.

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Hi Tegwini,

The UK future in the short term is the main concern. The question is, how will the market react to the political ramifications that you mentioned. I am not too concerned about the 'internal' problems of the UK in terms of taxes / benefits etc, at least no more concerned than anyone else regarding what is happening to the Governance of my homeland. The effect on the FT is my primary concern as I am seriously thinking about a new direction for my dosh.

I can of course see that International  loss of confidence in the UK would impact unfavourably on the FT and that does concern me. The last couple of years have been a bit traumatic but.......historically the FT has seen an upward trend but the timescale is the real gambling point.

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In my opinion markets are at presently fully valued and likely to remain volatile for the foreseeable future.

 

My strategy is to buy the dividend. Growth at present like is a lottery win – nice if it happens, but not very likely.

 

The criteria I use are to judge the value against the threat from the current conditions/competition.

 

Every segment will have winners and losers – In retail for example, taking a long view I back Tesco rather than M&S.

 

Outside of the markets I see good long term property opportunities.

 

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I cant fault a 'buy the dividend' strategy and (being a Tesco shareholder already) I certainly agree in respect of Tesco.

I am considering an investment that effectively 'gambles' (saying it like it is) on an increase in the FT and S & P indices over time.

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I think that markets will be flat at best for the next 5 years with potential for further loses as this recession/depression deepens.

 

I would not bet on the market as a whole. There are still many companies that are worth taking a punt on.

 

I like the look of Barclays – BA on the other hand I would not touch.

 

Cash will certainly not be king once the printing presses kick into top gear.

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I tend towards Braco's line of thinking.

Long term the FT will probably recover and maybe go on to greatness again but in the next 2 years, not a chance. To be frank personally I'm not convinced that the possibility of the IMF is completely out of the question.

Over that sort of period caution and protection are absolutely the only options and I think and if ones long term plans are to remain in France then a case could be argued for an immediate conversion of ones liquid assets into € and then the making of the best of then them in that currency, via an Assurance Vie for instance.

You can agonise all day everyday over the exchange rate, 'shall I transfer now or wait until tomorrow, wish I'd done it yesterday', we've all been there, but for the sake of stability once your money is in € it's one huge imponderable taken out of the equation allowing you to make plans which are not in danger of coming off the rails by events totally outwith your control in UK.

Unfortunately the bulk of my money is tied up in UK pension funds so not readily available to me and short of retirement the only way I think I could materially alter that would be by way of a QROPS but for the moment at least I lack the in depth knowledge and confidence to make what I think would be a pretty irreversible leap [blink]

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Two things are making judgments on asset prices difficult at the moment.

Firstly the economic outlook for a leveraged economy like the UK or US is difficult since the spending in the economy is being replaced by government spending to replace the gap left by personal spending. At 12/14% of GDP, the budget gap is not sustainable and so the economy will struggle for some years to come.

The difficult part is that this outlook suggests that stocks should fall. However, the BOE is pumping huge amounts of liquidity in to the market (£150 billion) to try and create some inflationary pressures. Some of this liquidity finds it's way back in to assets (particularly stocks) and so while liquidity measures are maintained by the Bank of England (namely quantative easing and almost zero interest rates) we are likely to see stock markets perform better than might normally be expected.

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If you are considering the same investment I was, what really put me off, is that the brokerage firm was not required to pay me the 'gamble' earnings - there was some loophole that they could get away with just paying the base sum I invested.  The banks really load the T&Cs in their own favour.

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That must have been some carefully designed loophole [:(]

I haven't read the small print yet, I am still considering the whole ethos. On the face of it, the deal is very attractive, a gamble its true, but its totally dependent on the FTSE and S & P rising (by even a small amount, as long as its a +ve rise) above its present level by the 2nd anniversary, if no rise then its rolled to the third anniversary then the 4th and lastly to the 5th, all referred back to the present value. Should a rise be there on any of the anniversaries ( 2 to 5) then the fund auto-closes and pays out.

I am seriously tempted, but hate making the decision.

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[quote user="sunny"]The banks really load the T&Cs in their own favour.[/quote]Whenever considering investments whatever they tell you tell yourself over and over and over again:

THEY WANT MY MONEY

THEY WANT MY MONEY

THEY WANT MY MONEY

THEY WANT MY MONEY

[;-)]

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