From the category archives:

Investing

Cash and your portfolio

by The Investor on March 17, 2010

How much cash should you hold in your portfolio?

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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Avoiding capital gains tax on your investments

by The Investor on March 15, 2010

Avoiding capital gains tax

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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5 ways to invest like Warren Buffett (from the man himself)

March 12, 2010
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Are you a better investor than Warren Buffett? I’m not even a better writer than Buffett, so let’s hear some wisdom from the great man himself.

7 comments

US historical asset class returns

March 10, 2010
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The big rally in US equities in 2009 isn’t so unusual, but the crash in the price of US government bonds is a once-in-a-lifetime event.

8 comments

UK historical asset class returns

March 10, 2010
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2009 saw UK shares surge, but it’s yet to undo the damage of the lost decade. Meanwhile the performance of Government bonds in recent decades looks like an aberration.

2 comments

Cash is king, or cash is trash?

March 8, 2010
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By watching how investors treat their cash holdings, you can sometimes get a feel for how carried away the market is. Is cash trash?

20 comments

Volatility, inflation, and asset class returns

March 5, 2010
Volatility in annual returns decreases over time

Don’t be scared out of stocks by short-term fluctuations if you’re investing for the long-term. Over time things even out.

14 comments

Companies paying dividends early to beat higher UK tax rates

February 19, 2010
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Companies can’t get dividends out the door quickly enough, for major private shareholders, who face a 10% tax rise on dividend income in April.

5 comments

Bolton’s China trust is worth a small punt

February 11, 2010
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Anthony Bolton’s China fund surely won’t repeat his glory days, but it’s not a bad way to invest in China.

24 comments

Six reasons not to invest with Bolton in China

February 11, 2010
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Bolton’s got a great track record – but he earned it 6,000 miles away from Beijing.

4 comments

Six reasons to back Bolton’s China investment trust

February 11, 2010
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Here are a few good reasons to back Anthony Bolton in China via his new Special Situations Trust.

1 comment

Should you back Bolton in the China shop?

February 11, 2010
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Today is Anthony Bolton day on Monevator, in recognition of his exciting new Chinese investment trust.

5 comments

Is it safe to invest in corporate bonds?

February 3, 2010
Are corporate bonds safe?

Sadly, the people who ask if it’s safe to invest in corporate bonds are probably not going to take in the answer, but I’ll try!

4 comments

Rebalance your portfolio for your benefit, not the tax man’s

January 29, 2010
Rebalancing

Assuming you’re not investing for the Government’s benefit, you need to keep an eye on tax when rebalancing your portfolio.

3 comments

An easy way to invest in Australia, Canada or South Africa

January 26, 2010
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Our far-flung cousins get all the cheap housing, great beaches and, er, the moose, but now we can get in on the action.

10 comments

How to run your portfolio like a hedge fund

January 14, 2010
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You can use in a simple form many of the tricks of hedge fund managers, though it may cost you overall.

9 comments

What should a new investor be told to do?

January 12, 2010
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A new investor should focus on low fees and an easy to understand strategy when first venturing into the stock market

11 comments

Lose 6% and you lose your job

January 8, 2010
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One top hedge fund puts traders on notice if they lose just 3% of the funds they manage. I’d be out of a job on that regime.

9 comments

Should you be investing more in technology?

January 5, 2010
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We’re due a new technology boom – but if you’re a UK reader, you might miss out due to the lack of big names on the London market.

11 comments

Three reasons to keep buying British

December 29, 2009
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The UK stock market has been talked down by every other fund manager and share tipper out there. In response, it has soared.

6 comments

Steep yield curve means equities could fly

December 21, 2009
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The record steepening of the US Treasury yield curve suggests stock markets could still be good value, and I agree.

9 comments

Beat the market by following director share buying

December 16, 2009
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Directors share dealing – particularly buying their stock when it is showing value credentials – can signal superior returns for up to two years.

4 comments

No certainty with absolute return funds

December 7, 2009
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Absolute return funds don’t actually guarantee positive returns, and come with high charges. Better to roll your own.

1 comment

Reminiscences of a stock market wallflower

November 24, 2009
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In the ten years since the dotcom shares peaked and then began to plunge, everything and nothing has changed.

3 comments

At what yield are government bonds a buy?

November 19, 2009
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At what yield do risk-free government bonds become attractive, and why?

8 comments

Buy government bonds – eventually

November 16, 2009
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I want to buy a small amount of government bonds, but I’m too mean to pay a high price for their security and low returns.

2 comments

How Property Income Distributions (PIDs) are taxed

November 12, 2009
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Property income distributions are taxed differently to dividends, and if you use an ISA you may have tax to reclaim.

2 comments

How UK dividends are taxed

November 10, 2009
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You pay less tax on dividend income than you do on savings, giving shares another advantage for long-term investment.

4 comments

9 lazy ETF portfolios for UK investors

October 26, 2009
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There’s a lot to be said for investing in the major assets via ETFs and then going to the beach.

12 comments

How to calculate bond yields

October 20, 2009
Get your bonds number

How to calculate the running yield and redemption yield of bonds (or where to find a calculator!)

2 comments