Investing & The Global Economy - Live Q&A
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- Опубликовано: 20 июл 2024
- Do you have a question that you would like to ask Ramin? Well, this is your chance! You can ask Ramin anything about investing or the global economy and Ramin will answer your questions live at 7pm UK time on Thursday the 6th of October 2022.
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Timestamps
00:00 Introduction
03:59 Mortgage rates at 6% - do you think that makes for a closer debate in the invest v repay mortgage dilemma?
09:42 How do you buy bonds direct?
14:56 What do you think the likelihood of Elon buying twitter at the original offer price is?
17:06 Despite the trend to DB transfers into SIPPs, is it time to think again about annuities in a rising interest rate environment?
21:00 Are you willing to do a short explanation on how bonds are actually priced intra day?
31:37 So many blue chip stocks are down close to 50%, much more than the S&P,. Is there compelling value amongst those blue chips not heavily weighted in S&P?
38:00 If we were to be overweight currently in cash/short term treasuries, what data points would you suggest looking at to determine a good time to a total index fund.
41:43 Lock in interest for mortgage for 2 or 5 years?
45:14 House prices haven’t abated but rates are now high, do you think it’s worth waiting? If wait just sit in cash?
48:10 Do you know of any 'money market' funds offered by Vanguard that offers a 'yield' comparable with smaller UK banks 1 year fixed rate 'bonds'
52:56 On the note of S&P valuations (mainly fwd and TTM p/e) - do you expect fundamentals to deteriorate further, and when?
56:10 With the pension funds having bought prime property at 3% ish yields once the rates go up will they be asked to pay the difference in valuation? And then crash the market?
The link for the letter from the BoE to the Treasury is here assets.publishing.service.gov...
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Take A Look At Some Of My Other Videos & Playlists
📹 Investment Strategies playlist • Investment Strategies
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DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.
#QandA #Investing #PensionCraft
Favorite channel! Solid. Thank you.
Glad you enjoy it @Sergey Ivanov
@8:50. Loving the delivery! :)
Gilts are no risk free though, there is always the risk of government default, no matter how low it is currently, but rising with rising interest rates. Despite the sound math, I would still rather be diversified in different asset classes pretty widely.
Had me confused at the start 😂
Thanks I agree with everything you say here, I'm learning slowly bit by bit, 2 years of dabbling with the markets which made NO SENCE TO ME suddenly it feels like we are getting back to reality.
Those pensions were leveraged to give them the yield needed to satisfy the requirements and that was the problem, they actually went down to virtually nothing and do could not pay out the pension without completely going zero, how crazy is that?
Great video Ramin, thanks for your wisdom! 💪
My pleasure @Mikey Watkins
I’ve only just discovered your channel Ramin and think your videos are excellent. I didn’t know you had a podcast so will certainly subscribe to that too. One question on today’s session… you mentioned that if equities were to sell off you could lose 10 to 15% of a short dated Coro bond fund. Why is that? Is it due to potentially increased default risk? Looking forward to watching more!
Yes, that is the reason, so the credit spread which represents the credit risk would increase, thus the yield as well, and the value of those bonds would decrease..
@@JeePsSsS Thanks.
Welcome aboard @John Ennis
Good channel, only stumbled accross your video the other day how mortgages would be impacted with new rates....Subscribed.
Thanks welcome @oblong
Currency risks involved in buying any government bond is a factor to consider.
Love your programs. A tiny suggestion- please get a quite keyboard🙃
Thanks!
Hi @Tony Woodhams, Thank you for the Super Thanks! I really appreciate it. Ramin
Regarding the "2 or 5 year" mortgage question. Personally I don't have a clue what the correct answer will turn out to be (we'll only know that in hindsight), but to the extent that the bond market is efficient and prices in all known economic data I don't think it's obvious that a 5Y fix is better than a 2Y fix (not unless you think that tens of millions of bond investors have somehow mispriced the 5Y). Flip a coin, it's just as effective. Plus you won't feel so bad if you get it wrong :)
Tens of millions of bond investors mispriced inflation these past two years
Is it possible to calculate fair value of a bond etf fund e.g. VGOV?
Even a 20% fall in UK house prices would only take us down to the 2020 average. Is such a small setback realistic in the circumstances?
I'd imagine a concertina effect where the higher priced houses get hit most. Some will want to downsize creating a supply glut at the top and demand lower down...
I can see 40% drops on million pound homes outside the South East.
It depends what your motive is. A 20% fall combined with 10%+ inflation, is a 30%+ devaluation, which is about what happened in 1988/89 to 1995. I had a friend in the mid 1990's who had his own ideas about what a house should be worth, so he hung on certain prices would fall more. It cost him very very dearly indeed. House prices will go up in line with wages plus a premium indefinitely for the fact there is a fundamental shortage of homes. It isn't helpful or fair to those waiting to get in, but it is the reality for the long term. Don't ask me for advice though, because if I knew, I wouldn't be watching others for ideas. I just know that since I was born nearly 60 years ago, prices for homes have consistently grown well above incomes, with just occasional temporary corrections, and the last big one lasted from 1989 until about 1995.
Amazing content as always! The most useful RUclips channel about investing I have found so far. Question about one of your responses: you said that in uk an individual investor cannot buy gilts directly on dmo’s website. Are you sure this is true? I was looking through the website and there is an application form to become a member. If the application is accepted the website says you can buy gilts via computershare site. In the video you said they an individual cannot buy gilts from dmo, did you mean because an individual cannot become a member (why?)? Just trying to understand if there is any way to buy uk gilts directly from the government…
Hi Mat someone in our community found that you _can_ do this www.dmo.gov.uk/responsibilities/gilt-market/buying-selling/purchase-sale-service/ but it's operated on behalf of the Debt Management Office by Computershare Investor Services PLC. "If you wish to apply to become a member of the DMO’s Approved Group of Investors, or view the Terms and Conditions of the DMO Purchase and Sale Service, or download an application form to buy/sell gilts via the DMO’s Purchase and Sales Service, the relevant documents and application forms are available via the Computershare website." If you look at the Computershare site they say "Individuals wishing to join the Approved Group will need to satisfy the criteria established by the Registrar and DMO to meet their anti-money laundering obligations. You can find the appropriate forms, using the Downloadable Forms link below. Please note that due to current legislation, if you reside in an EEA Country or in the USA, you are not able to use the service to buy or sell Gilts." It seems very difficult to use - I haven't tried it. But it's a far cry from the US TreasuryDirect site! Thanks, Ramin.
Hi Ramin, thanks a lot for your response :)! I agree that it doesn’t seem to be an easy thing to do but I will probably give it a go. Looking forward to more great videos from you ;).
Was that money market fund yield accurate? Realistically, XSTR running at about 1.6% over last 2 months. Probably about 2% right now based on current BoE rate. Rate increase has been incredibly rapid so 'yield' figure (which is always going to be historic to some unknown degree) given on the typical broker fund page is a load of rubbish.
Just spat out my tea at the references to UK gov 😂
Need more money?
Oh goody I can earn 4% on a UK government bond. While inflation devalues that money at -10%. That translates into a net loss of -6%
Good compared to other asset classes.
@P J it won't be down to 2% where it sat for a decade though. Expect it to drop to 3 to 4% at best and have periodic spikes again when things happen - energy shortages, oil spikes, wars, climate disasters -such that over the rest decade it might average 5%.
That'd be a parallel to what happened during the post-WWII era that our low interest rate/high inflation outlook has been most similar to.
Where do I find one of these funds yielding 4% please ? On Morningstar VGOV shows 1.69%.
@P J There's a phenomenon since 2008 crash where countries have printed more money supply. That has had the effect of debasing the value of the currency. (Obviously they have all printed since going off gold in 1971 but they picked up pace remarkably after the 2008 GFC)
I believe it is that which has seen the ticket price of everything go much higher - they've effectively increased the demoninator.
That has meant that their (admittedly manipulated) inflation figures have remained low but they've been using a more underhanded method of reducing the purchasing power of the currency.
That thing we know is off but just can't quite put a finger on - debasement.
Add in the general shortage of housing, reaction of landlords to rising costs of buy to let, etc and you get closer to the picture you described. Wages have been effectively stagnant in most Western economies once you factor in M2 money supply growth. So people don't feel better off despite the salary appearing to grow over time... Because everything with it is going up in ticket price.
Unfortunately 90% plus of voters aren't going to come out of this any more financially literate.
Hey! I live in Holmer Green too, will have to pop round for a chat 😀
Hi @Konicky we may even bump into each other at the Spar don't forget to say hi if we do.
Did Ramin suggest it’s better to get a 2 year fixed mortgage and refinance afterwards when rates are lower?
This sounds a bit risky?
Very weird. First knee-jerk response was 5 year fix... Rates will be higher from now on.
By the end of the waffle about it taking 2 years for rates to stabilise, "I'd pick a 2 year and then fix again after those 2 years".
5 year rates are lower than 2 for each lender I've seen. Going with a 2 year fix spits you out at a time when the rates might be much higher with little chance of being lower. At least 5 is fixing costs for people now with certainty at broadly comparable costs to what most fixes are spitting them out from.
2 year fix is a massive risk and is only slightly less risky than sitting on the SVR.
Oh i'd say the FCA takes a dim view of commandments.
What do you think about investing in Plumbuses, given as they are manufactured with real fleeb juice?
Yeah, I'll ave some of that.
I'm long Plumbus 3x leveraged ETF, those things are going to moon
I'm filling in my compushare form now - not the easiest process.
Do you know if an individual investor can purchase uk gilts direct from government (dmo/computershare websites)? Do you know what are the requirements to get the application accepted? Can any uk resident do it?
@@mateuszg5 the form is asking for proof of uk residency and has to be formally witnessed. this is to join 'approved group of investors' - If accepted I presume I am then invited to invest in the gilts. It is this or Paragon bank which also offers good rates over one or two years.
🙏
Is it a good idea to invest in gold as economic situation is getting bad in uk?
Rising interest rates is bad for gold.
Yeah why not, gon for it.
If you want the gold to barter when society turns feral, you'd be better with silver coins so you can actually get someone to accept them in return for a tank of fuel...
Ubuntu ftw!!
But we had 7% base rates in the 90's and the stock market soared.
@P J over time, equities need to better reward for risk. And they act in relation to the environment.
In the 90s, rates were on a downward trajectory, as was inflation. Stock markets went up over that time because, amongst other things, borrowing to expand was becoming more profitable and inflation was a stable (predictable) counterforce.
We're going the other way now. Rates are now rising after inflation has leapt up (likely to fall but not back to a stable low level).
Over the decade, equity markets will reward for holding them but it is impossible to say that reward will outstrip inflation in the near-term.
The scammers are getting much better with their talking points to lure people in
Good opportunity 🤣🤣🤣. The rate is 4%, inflation is 10% so buy bonds to lose 6%. 🎉
Bonds yielding above actual inflation.... You'll be waiting a long while.