Dingdongler

May well close below 5000 today.

Sweet!

Chip

Already well below 5000

Chip

Dingdongler

I know, it went below 5000 yesterday but didn't close there. Today it may well close below that level.

warrenm2

Those damned Greeks! Fancy a Gvmt spending beyond its means, racking up huge debts, recklessly wasting money and fudging the figures to hide the mess! They deserve everything they get! Oh wait.....

bigsinky

^^^^^^^^ hahahahahahahahahahahahahaha ahhhh dearie me *wipes a tear from his eye

Gear Head

iTrader: (2)

I was on a work trip last year in Denmark where I met a very opinionated greek man. According to him, Greece was the country best set to lead Europe out of recession and that the UK had no future whatsoever. Oh how I wish I hadn't thrown his business card away!

f1_fan

iTrader: (9)

No worries, the Tories are at the helm, all will be well.

Gear Head

iTrader: (2)

GlesgaKiss

Don't think there's much doubt about it closing below 5000 today.

The stock market is, as always, operating far in advance of the true economic situation. Maybe right now they do need to correct in order to bring them back down to reality. The euphoria brought about after the realisation of the markets' obviously oversold state and the subsequent upwards trend is not something that's surprising, but given the likely lengthy nature of this recovery, it has to end by being brought down to earth sooner or later.

Maybe one of the rare chances to get some good value stock... which I guess is why you're happy, Dingdongler.

Play it right and you could end up getting paid some pretty impressive dividends years down the line(as a percentage of initial investment) and have the appreciation of the value of the stock to sell on when valuations are looking high once again. I guess this is your plan?

hodgy0_2

i bet it isn't

john banks

Starting to think about when I might buy. 4500 maybe.

Dingdongler

Sort of. I missed out last time around. I'm not a trader/expert (as I've admitted many times) and so was waiting to buy the whole FTSE 100 as a tracker. Simple plan for a simple person. I was waiting for circa 3400 and it never happened, once it bounced back close to 5000 I felt it was over done given all the potential bad news that was still out there.

This could be the buying opportunity again. Question is will I miss out again waiting for a low that never happens?

My gold is doing well by the way. I still think $1500 is on the horizon.

velohead66

So, if the average punter had a few quid spare each month, and wanted to build up some stocks (directly, not thru unit trust etc), what sectors would be worth a long term punt.

Resources I guess, is top of the list, like miners (BHP et al), oil/gas etc.
What other sectors do peps think are good long term punts.

Long term being say 5 years.

EddScott

Why would you not use Unit Trusts?

If it because if expense why not use ETFs which are cheaper as they have no fund manager (amongst other difference of course)

Leslie

I wonder who got the country into this mess though?

Les

bigsinky

making a bit of rally now to 5050

bigsinky

i think you could be right. $925/oz this time last year. $1208 today. 30% increase. if only banks could offer that sort of growth.

GlesgaKiss

Possibly resources, as you say. If you want to be defensive with your cash, keep away from anything financial at the moment without a doubt. There may be some great bargains out there but it is just a case of higher return = higher risk as always. If you want to be really defensive then just go for the likes of utilities or food retailers, etc... companies who's services are required regardless of any economic downturn. There might be more pain to come yet for financials... who knows what stones have been left unturned.

BP was starting to look quite attractive during the week with a 7% dividend and PE under 8 at one point, but then they might be affected to quite a degree by the current situation. Probably nothing a year's profit can't absorb, so nothing serious in the long run, but if you are only planning on holding 5 years and the dividend yield is reduced(from the 7% that attracted you) for two of those years, then it isn't such a great deal.

Ideally you want to be picking good solid companies that are simply dragged down by the panic in the markets. When that happens, people are thinking ahead to the reduction of the companies' earnings during a recession, but usually by the time the earnings themselves have been affected, the share price is higher again, because looking forward it's clear that panic has been overdone and earnings are only going to get better as a recovery continues. If you can get solid companies at good value(PE ratio under 10?), and with good healthy dividends 5%+... then years down the line when things pick up again, you are likely to have a higher dividend yield on your initial investment.


An example would be a company in an extended bull market trading at 100p with a 4p dividend, i.e., 4%.

During a collapse in prices, that stock might be brought back to around the value of its assets, say, 60p. The dividend yield is then over 6%. It could be lowered slightly as a result of the economic downturn for a short period, but with good, well established companies it is likely to end up well over 6% of your initial investment a few years down the line. Couple this with the fact you have bought the stock at a good safe 'base value', means that you have eliminated a lot of risk that would have been present in a bull market(i.e., buying stocks when their share price has risen far in advance of earnings).

With that in mind, you'll probably end up seeing a higher share price years down the line too, after the next bull market takes off... maybe even to such an extend that it fully covers any inflation during the period which would otherwise eat into your dividend income. Certainly if you're using the above example, a return to 100p years down the line would be a huge rise in value from the 60p you bought at. If you buy bonds yielding 6% with the same idea in mind, all you'll see at maturity is your principal returned, whereas with stocks you have the potential for capital gains too.

Something to think about, but just my thoughts, certainly nothing to base an investment on... I'm no professional!

GlesgaKiss

Yes gold doing well again. It's obviously been a good investment for you.

I suppose it all depends on how you feel FTSE companies are valued. It'll get to a certain stage where there isn't really much long-term downside risk. Short-term maybe, but that's not too important for you I guess.

Dingdongler

Alan, yes, that about sums it up for me, whether I get in at the right time is the bog question!

Alan, can I pm you on something? You remember I had a little thread on an AIM listed company I wanted to buy into? Its a illiquid company (if thats the correct word) where the price doesn't change for days as I think the MD owns about 85% of all shares.

I could do with some informal friendly advice on the matter. Not IF to buy as I have already decided I will, just how/what moves the price of such a company.

If you don't mind I'll pm you about it?

GlesgaKiss

Yeah, of course, send away!

Leslie

Funny you should say that!

Les