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Cash getting eroded by inflation in the UK.


Butch
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Note: I am NOT a financial expert, the following is a rehash of an article I read yesterday.

As inflation rises, the buying power of our cash reduces, and with inflation in the UK running high and some suggest, possibly into double figures later this year, a lot of people are looking to park their money elsewhere, Crypto, Gold, Silver and Carbon Credits along with green energy investments seem to be flavour of the month. Some smart money seems to be heading towards the S&P500 which is mooted to offer returns of over 30% in 2022. Property , in the UK at least is tailing off due to punitive taxes on Buy to Let owners and second homes, plus supply is limited which is pushing up prices in many areas.

Now, I'm not exactly sat on a massive pile of cash, but if I was, and given the choice of above I have no idea where to put it. Given all of the uncertainty, would I be better hitting the Casino and sticking it all on Red?.

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19 minutes ago, Butch said:

Note: I am NOT a financial expert, the following is a rehash of an article I read yesterday.

As inflation rises, the buying power of our cash reduces, and with inflation in the UK running high and some suggest, possibly into double figures later this year, a lot of people are looking to park their money elsewhere, Crypto, Gold, Silver and Carbon Credits along with green energy investments seem to be flavour of the month. Some smart money seems to be heading towards the S&P500 which is mooted to offer returns of over 30% in 2022. Property , in the UK at least is tailing off due to punitive taxes on Buy to Let owners and second homes, plus supply is limited which is pushing up prices in many areas.

Now, I'm not exactly sat on a massive pile of cash, but if I was, and given the choice of above I have no idea where to put it. Given all of the uncertainty, would I be better hitting the Casino and sticking it all on Red?.

Nor black ........ nor a beer bar in Pattaya ......... S and P 500 returns of 30% ..... no chance. 

Agree inflation is a massive concern and hard to know where to put cash right now.

Smart people I know are looking at green investment shite ......

Answers on a postcard please and no crypto tips ....

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2 hours ago, Butch said:

Note: I am NOT a financial expert, the following is a rehash of an article I read yesterday.

As inflation rises, the buying power of our cash reduces, and with inflation in the UK running high and some suggest, possibly into double figures later this year, a lot of people are looking to park their money elsewhere, Crypto, Gold, Silver and Carbon Credits along with green energy investments seem to be flavour of the month. Some smart money seems to be heading towards the S&P500 which is mooted to offer returns of over 30% in 2022. Property , in the UK at least is tailing off due to punitive taxes on Buy to Let owners and second homes, plus supply is limited which is pushing up prices in many areas.

Now, I'm not exactly sat on a massive pile of cash, but if I was, and given the choice of above I have no idea where to put it. Given all of the uncertainty, would I be better hitting the Casino and sticking it all on Red?.

There used to be a poster on the old ssh .. board that was meticulous in his retirement planning .. unfortunately he stopped posting so we never got to know if he eventually made it ... but he always recommended Vanguard Funds because of the low fees ( 0.10-0.25% ) , I have done similar with my cash .

no way would I touch crypto , not at my stage in life , it's a complete gamble and you should only put into it what you are willing to lose 

but even with taxes property is always a winner in the U.K. , especially if you can add value along the way 

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The rumblings I read and hear about Crypto are concerning, far too volatile for any kind of investment. Chucking £100 at dodgecoin and hoping for a 10 bagger is nothing more than chucking £100 on a random nag in the 2:30 at Haydock.

As for property in the UK,  for BTL owners they've done away with the Tax relief on the interest payments at marginal rate, so again, ripping the arse out of any rental profits and that leaves less meat on the bone plus the capital appreciation in the property (which , if in the right place can give a good return) but any sale is then subject to CGT. Tossers.

I have parked a chunk in a Rathbone fund which has so far netted me around 10% within 6 months, so I'm chuffed with that, I may look at a vanguard as they seem to be pretty stable and low risk.

All I intend to do is keep an emergency fund handy, and maybe even chuck what I've got into Premium bonds, but even they're not going to outstrip inflation unless I hit the big one.

Right, which way to the Casino...?

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1 minute ago, Butch said:

The rumblings I read and hear about Crypto are concerning, far too volatile for any kind of investment. Chucking £100 at dodgecoin and hoping for a 10 bagger is nothing more than chucking £100 on a random nag in the 2:30 at Haydock.

As for property in the UK,  for BTL owners they've done away with the Tax relief on the interest payments at marginal rate, so again, ripping the arse out of any rental profits and that leaves less meat on the bone plus the capital appreciation in the property (which , if in the right place can give a good return) but any sale is then subject to CGT. Tossers.

I have parked a chunk in a Rathbone fund which has so far netted me around 10% within 6 months, so I'm chuffed with that, I may look at a vanguard as they seem to be pretty stable and low risk.

All I intend to do is keep an emergency fund handy, and maybe even chuck what I've got into Premium bonds, but even they're not going to outstrip inflation unless I hit the big one.

Right, which way to the Casino...?

Premium bonds are a terrible ROI at just 1%, you are basically losing money over time. Investment funds are the way forward, ideally in the form of a pension for anyone that is still working so you don’t pay tax on what you are putting in there.

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If it helps anyone, when I decided to get back into the market a couple of years ago I created a spreadsheet that looked at ETF's in different market sectors. I then ranked the ETF's within a sector by performance, Expense Ratio and Dividend Yield. Vanguard ETF's made it to the top of my ranking in several of the sectors and the ones highlighted below are what I ultimately invested in. Of them, VGT has been far and away my best performer.

The spreadsheet I created uses Google Sheets with formulas to capture 20 minute delayed pricing information, so the information below is current as of this morning. Unfortunately the source I used for ER and Div Yield (etfs.morningstar.com) no longer works so I deleted those columns. If anyone knows of a source for that info that works for ETF's and can be included as a formula in a spreadsheet, that info would be much appreciated.

Sector Rank Symbol Name Share Price 200 Day
Moving Avg
(Price - 200 DMA)
/ Price
50 Day
Moving Avg
(Price - 50 DMA)
/ Price
Utilities 1.0 VPU Vanguard Utilities Index Fund ETF 153.910 146.74 4.66% 150.74 2.06%
  1.1 XLU Utilities Select Sector SPDR Fund 70.410 67.14 4.64% 68.96 2.06%
  1.2 RYU Invesco S&P 500 Eql Wght Utilities ETF 113.180 107.98 4.60% 109.66 3.11%
Technology 2.0 VGT Vanguard Information Technology Index Fund ETF 434.860 414.22 4.75% 453.16 -4.21%
  2.1 XLK Technology Select Sector SPDR Fund 165.930 154.54 6.87% 170.77 -2.91%
  2.2 RYT Invesco S&P 500 Eql Wght Technology ETF 309.930 297.69 3.95% 318.64 -2.81%
  2.3 IGM iShares Expanded Tech Sector ETF 416.330 413.28 0.73% 440.58 -5.82%
Health Care 3.0 XLV Health Care Select Sector SPDR Fund 134.350 130.09 3.17% 135.73 -1.03%
  3.1 VHT Vanguard Health Care Index Fund ETF 252.480 251.73 0.30% 259.23 -2.67%
  3.2 FHLC Fidelity MSCI Health Care Index ETF 65.060 64.89 0.27% 66.83 -2.72%
  3.3 IYH iShares US Healthcare ETF 284.800 280.53 1.50% 290.74 -2.09%
  3.9 IHF iShares US Healthcare Providers ETF 270.710 269.71 0.37% 279.47 -3.24%
High Dividend 4.0 VYM Vanguard High Dividend Yield ETF 114.550 107.17 6.44% 110.67 3.39%
  4.1 SCHD Schwab US Dividend Equity ETF 81.650 77.11 5.56% 79.21 2.99%
  4.2 VIG Vanguard Dividend Appreciation Index Fund ETF 169.040 160.20 5.23% 168.39 0.38%
  4.3 DGRO iShares Core Dividend Growth ETF 55.670 52.09 6.42% 54.45 2.20%
  4.4 DON WisdomTree US MidCap Dividend Fund 44.980 42.98 4.45% 44.31 1.49%
  4.4 FVD First Trust Value Line Dividend Index ETF 42.980 40.81 5.05% 42.06 2.13%
  4.8 SDY SPDR S&P Dividend ETF 130.750 124.29 4.94% 126.91 2.94%
  4.9 NOBL ProShares S&P 500 Dividend Aristocrats ETF 98.120 93.02 5.19% 96.45 1.70%
Consumer Staples 5.0 XLP Consumer Staples Select Sector SPDR Fund 77.420 71.76 7.32% 74.21 4.15%
  5.1 RHS Invesco S&P 500 Eql Wght Con Staples ETF 173.170 161.43 6.78% 163.43 5.63%
  5.2 FSTA Fidelity MSCI Consumer Staples Index ETF 46.880 43.57 7.06% 45.01 3.99%
  5.3 VDC Vanguard Consumer Staples Index Fund ETF 200.590 186.64 6.96% 192.73 3.92%
Large Cap Growth 6.0 SCHG Schwab US Large-Cap Growth ETF 154.730 151.44 2.12% 163.75 -5.83%
  6.1 VOO Vanguard 500 Index Fund ETF 428.590 406.50 5.16% 431.33 -0.64%
  6.1 VOOG Vanguard S&P 500 Growth Index Fund ETF 288.370 274.01 4.98% 299.21 -3.76%
  6.1 VOOV Vanguard S&P 500 Value Index Fund ETF 153.100 145.47 4.98% 149.16 2.58%
  6.1 VUG Vanguard Growth Index Fund ETF 304.210 296.82 2.43% 320.06 -5.21%
  6.2 VONG Vanguard Russell 1000 Growth Index Fund ETF 74.780 72.33 3.28% 78.20 -4.58%
  6.3 MGK Vanguard Mega Cap Growth Index Fund ETF 248.270 240.30 3.21% 259.70 -4.61%
  6.4 IWY iShares Russell Top 200 Growth Index Fund 165.990 157.14 5.33% 171.69 -3.44%
  6.5 IWF iShares Russell 1000 Growth ETF 290.810 281.36 3.25% 304.19 -4.60%
Large Cap Value 7.0 SCHV Schwab US Large-Cap Value ETF 73.800 69.91 5.27% 72.19 2.18%
  7.1 VTV Vanguard Value Index Fund ETF 149.420 140.69 5.84% 145.17 2.84%
  7.2 MGV Vanguard Mega Cap Value Index Fund ETF 108.590 101.85 6.20% 105.24 3.09%
  7.4 IWX iShares Russell Top 200 Value ETF 71.020 67.67 4.72% 69.19 2.57%
  7.5 IWD iShares Russell 1000 Value ETF 169.260 161.79 4.41% 165.97 1.94%
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Looks great thank you. Just wish I understood it a bit better.

Take the VGT one you highlighted. Rank 2.

Share price starts at 434  200 days moving goes down to 414. A 20 point loss ??

50 days 453 a 21 point gain on initial price. Yet 50 day price is red -4.21 ???? Is red good in this spreadsheet ?

Genuinely curious and would love to know more.

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On 1/10/2022 at 1:12 PM, nampla69 said:

Looks great thank you. Just wish I understood it a bit better.

Take the VGT one you highlighted. Rank 2.

Share price starts at 434  200 days moving goes down to 414. A 20 point loss ??

50 days 453 a 21 point gain on initial price. Yet 50 day price is red -4.21 ???? Is red good in this spreadsheet ?

Genuinely curious and would love to know more.

I think this article does a far better job of explaining the moving average than I could.

Why the 50-Day Simple Moving Average Is Popular Among Traders

At the time I was looking at different ETF's the market was rising so most of the ETF's had positive DMA's. I used the DMA as one of several factors to decide on where to park my money.

At this point in time my spreadsheet is painting a different story and if I was looking for places to invest I would make different choices. But I'm not one to chase returns, so happy to have parked my money where I did and ride out the normal fluctuations in the market.

Edited by forcebwithu
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On 1/9/2022 at 12:18 PM, Butch said:

Note: I am NOT a financial expert, the following is a rehash of an article I read yesterday.

As inflation rises, the buying power of our cash reduces, and with inflation in the UK running high and some suggest, possibly into double figures later this year, a lot of people are looking to park their money elsewhere, Crypto, Gold, Silver and Carbon Credits along with green energy investments seem to be flavour of the month. Some smart money seems to be heading towards the S&P500 which is mooted to offer returns of over 30% in 2022. Property , in the UK at least is tailing off due to punitive taxes on Buy to Let owners and second homes, plus supply is limited which is pushing up prices in many areas.

Now, I'm not exactly sat on a massive pile of cash, but if I was, and given the choice of above I have no idea where to put it. Given all of the uncertainty, would I be better hitting the Casino and sticking it all on Red?.

Casino no

As to other predictions of the future, no need to look beyond Sun Editor Kelvin Mackenzie's sacking of Mystic Meg

"Of course you'll know why I called you into my office today" 

Edited by Lemondropkid
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3 hours ago, Butch said:

Out of interest, in the USA what are your tax liabilities on any gains you make?.

My investments are in an IRA, so no tax liability until I withdraw. For regular brokerage accounts, gains after offsetting against losses are treated as normal income. The tax liability would depend on what marginal tax bracket you're in.

image.png

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18 hours ago, forcebwithu said:

My investments are in an IRA, so no tax liability until I withdraw. For regular brokerage accounts, gains after offsetting against losses are treated as normal income. The tax liability would depend on what marginal tax bracket you're in.

image.png

Better than Capital Gains Tax in the UK.

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5 hours ago, nampla69 said:

Better than Capital Gains Tax in the UK.

Your post triggered a memory that in the US tax code differentiates between long term and short term capital gains.

Capital gains are the profits from the sale of an asset — shares of stock, a piece of land, a business — and generally are considered taxable income. How much these gains are taxed depends a lot on how long you held the asset before selling.

In 2021, the capital gains tax rates are either 0%, 15% or 20% for most assets held for more than a year. Capital gains tax rates on most assets held for less than a year correspond to ordinary income tax brackets (10%, 12%, 22%, 24%, 32%, 35% or 37%).

source: https://www.nerdwallet.com/article/taxes/capital-gains-tax-rates

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On 1/9/2022 at 4:17 PM, Sangsom said:

Premium bonds are a terrible ROI at just 1%, you are basically losing money over time. Investment funds are the way forward, ideally in the form of a pension for anyone that is still working so you don’t pay tax on what you are putting in there.

Yep, the only advantage being that it's slightly better than bank rates plus the money is safe, relatively speaking.

I've been lucky today, (well this week though), my BAT shares are well up on what I paid for them and have been giving a pretty solid dividend return over the past couple of years. Thankfully.

From all the rumblings in the news etc, inflation is set to rise even further in the UK this year. I think 2022 will be a tough year for some.

 

 

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  • 3 weeks later...

Things not looking good for the less well off in the society as usual. Add this to the massive rise in domestic fuel costs and the NI contribution increase coming shortly and times will be tough for millions of people. Maybe the government should concentrate on problems at home rather than worrying about shit like Ukraine etc. And try to help the lower paid for a change. 

_123157893_metro0702.png

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I seriously think that "they" want to depress not only the lower classes, but also the middle classes as well. All that furlough, all those loans and all the printed money needs to be paid for somehow, and there's no way the higher echelons of society will be footing the bill when they can pass it on to us.

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  • 1 month later...
On 2/12/2022 at 6:27 PM, Butch said:

I seriously think that "they" want to depress not only the lower classes, but also the middle classes as well. All that furlough, all those loans and all the printed money needs to be paid for somehow, and there's no way the higher echelons of society will be footing the bill when they can pass it on to us.

I just had an email from my energy provider,my monthly direct debit is going up from £100 to £213....

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NI contributions went up 1.25p in the pound today.

Gonna be a lot of people getting into debt. Always the lowest paid who seem to get hammered.

Time they put an end to the rich and corporations tax avoidance.

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21 hours ago, coxyhog said:

I just had an email from my energy provider,my monthly direct debit is going up from £100 to £213....

That's bloody ridiculous. It's disgusting that the Govt still has a green levy and charges VAT on heating bills. They could easily mitigate a chunk of that.

21 hours ago, galenkia said:

NI contributions went up 1.25p in the pound today.

Gonna be a lot of people getting into debt. Always the lowest paid who seem to get hammered.

Time they put an end to the rich and corporations tax avoidance.

I just got reamed out royally due to the current diesel shortage caused by a bunch of fucking crusties blockading depots. £1.97 for 1 litre of diesel. Added to that, my weekly wages went down by around £18 due to the NI hike. However ,in July it will go back to better than it was when the threshold increases. Cold comfort though.

Meanwhile Sunak's Mrs is non domicile. How utterly hypocritical.

 

 

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32 minutes ago, Butch said:

That's bloody ridiculous. It's disgusting that the Govt still has a green levy and charges VAT on heating bills. They could easily mitigate a chunk of that.

I just got reamed out royally due to the current diesel shortage caused by a bunch of fucking crusties blockading depots. £1.97 for 1 litre of diesel. Added to that, my weekly wages went down by around £18 due to the NI hike. However ,in July it will go back to better than it was when the threshold increases. Cold comfort though.

Meanwhile Sunak's Mrs is non domicile. How utterly hypocritical.

 

 

And Boris tells people to turn the heating down and eat cheaper food.

Let them eat cake?.

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