by The Investor on March 17, 2010
I believe cash is king of the asset classes, which might come as a surprise given that I most often talk about investing in equities (by buying shares in companies).
But equities are a necessary evil that come with big downsides:
- There’s relatively high costs involved in buying and trading equities, even in cheap index funds.
- If you buy individual shares you can lose all your investment (though this risk is easily avoided by using an index tracker or an ETF portfolio).
The case for investing in equities is that over long periods in the UK (and even more so in the U.S.), equities have beaten the returns from all other asset classes.
But investing isn’t just about getting the highest returns.
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by The Investor on March 15, 2010
Note: This is a detailed guide to avoiding capital gains tax in the UK. Readers in the US might check out Mike’s tax site.
Most people won’t ever need to consider avoiding capital gains tax, because they’ll never be liable to pay it.
Your home and car are exempt from UK capital gains tax, and the average person has few other assets outside of cash, pensions, and ISAs – which are all exempt, too.
You also get a personal capital gains tax allowance every tax year (from 6th April to 5th April), which is usually sufficient for avoiding capital gains tax bills.
- The allowance is currently £10,100 in gains a year, where a gain is the increase in the value of the asset between buying and selling it. You subtract capital losses from capital gains to arrive at your total gain for the year. (Note: Gains and losses are only ‘realised’ when you sell).
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Cash is king, or cash is trash?
March 8, 2010By watching how investors treat their cash holdings, you can sometimes get a feel for how carried away the market is. Is cash trash?