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Investing in these (un)interesting times

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30th Nov 2016
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For at least the last five years, interest rates have been nudging along the bottom, even reaching negative levels in the last few months.

Depending upon your perspective (and quite possibly age) this is either very good news or very bad.

It is necessary to preface this article by stating categorically that the writer is neither permitted nor qualified to give investment advice and would never dream of doing so, except to his worst enemy, who would have to very stupid to rely on someone with such little talent for, or interest in, the subject.

On the plus side, anyone seeking to purchase an almost certainly over-priced property can get ridiculously large mortgages at very low cost. However, this should come with a health warning, since if interest rates go up they might well find themselves homeless.

However, for those that are trying to turn their small nest eggs into rather larger ones, the low interest rates paid by banks have become laughable, dropping into fractions of 1%.

Government-sponsored investments such as ISAs sound good but frankly, if the return is practically zero, the tax reliefs are barely worth the paper that they are written on.

Perhaps those in the worst position at the moment are people on the brink of retirement. Trying to convert that painfully saved pension into an annuity is likely to lead to suicidal thoughts. Returns in this sector appear to be almost non-existent, although if any pensions adviser reading this column wants to suggest routes to riches, they thought to be most welcome.

There seem to be many alternatives on the market but are any of them really wise or safe?

One possibility is to invest in the stock market. This can obviously go up or down and, over a period of time, might well be a wise way to proceed, although current global economic uncertainty could make that a disastrous decision.

Similarly, investing in a single company is a popular revenue. However, a former colleague swore by Marks & Spencer until things started to go badly wrong, while your esteemed columnist managed to have half of his (gifted) investment portfolio wiped out when two banks went bust so, once again, your shirt could disappear without trace.

Private markets are now springing up on the Internet, putting lenders together with borrowers but offering no kind of security at all. Once again, the upside here is substantial, while the downside doesn’t even bear thinking about.

Investing in property or the art market could be the answer, at least providing a physical asset to offer some kind of protection. However, if it is necessary to borrow in order to invest, once again there is a great deal of risk involved. On the plus side, at least with art, you should get some pleasure from the purchase.

Frankly, given the paucity of choice, perhaps a trip down to the bookmaker to bet on the frisky grey in tomorrow’s 2.30 at Epsom, Sunderland to win the league or Nigel Farage to become the next British Prime Minister might be as good a possibility as any other covered in this article.

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By carnmores
02nd Dec 2016 14:58

try Growth Street for returns of 4% +

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