What am I missing in my equity investments...

[galway_blow_in]

Rob would you can consider allocating a small percentage to precious metals. I started investing in gold and silver mining stocks at the start of this year. It appears that gold and silver have broken out of five year bear markets recently which has even caught the attention of mainstream media.

did your successfully timed entry into gold result in you recovering what losses you had in equities in 2015 ?

 

[landlord]

I have made 6 times in gold stocks what I lost last year on general equities, but I believe Gold and silver's recent advance is overbought and needs to correct.

 

[galway_blow_in]

I have made 6 times in gold stocks what I lost last year on general equities, but I believe Gold and silver's recent advance is overbought and needs to correct.

i remember telling you that you had not done all that badly a year ago or so , you were coming across as a little down on yourself , had you not dumped at the time , you would have fared even worse as i think you were out before the big sell off in january and early february , you made a terrific trade and at a time when no one was predicting a gold recovery

as for gold pulling back , i have not been in gold bar a small position in a miner ( freeport mc moran ) i bought in january which trebbled before i sold it , i bought puts in gold on friday which expire in december , im long airlines ( jetblue which is a domestic carrier ) in america as i think they are too cheap to the point of being priced for bankruptcy ( PE,s of 4 or less ) , i have taken a punt on easyjet though its not compan im optimistic about long term , ryanair is superior on every metric , i also bought some bank of ireland in the past week @ .163 as i think its now being priced for a european wide banking crisis , bank of ireland is small so should not have the kind of real exposure the major investment banks do to italy etc , that said i doubt bank of ireland crosses over 30 cents again for a year at least

 

[knockshe]

Any thoughts on how I might generate a modest return (4% or 5%), relatively risk-free, on a 6-figure redundancy lump sum? I am in my late 50's, have 3 teenagers to put through college and am unlikely to get re-employed. I have a modest defined-contribution pension which I don't want to trigger for some years yet. No borrowings.

 

[Sarenco]

Any thoughts on how I might generate a modest return (4% or 5%), relatively risk-free, on a 6-figure redundancy lump sum? I am in my late 50's, have 3 teenagers to put through college and am unlikely to get re-employed. I have a modest defined-contribution pension which I don't want to trigger for some years yet. No borrowings.

Hi Knockshe

I'm afraid a "relatively risk-free" return of 4% or 5% (net of costs) is not really achievable in the current environment - you are going to have to take on a fair degree of risk to have any realistic chance of achieving that kind of return.

I think you could consider investing a chunk of your redundancy lump sum in a few income focused investment trusts (e.g. City of London Investment Trust, Merchants, Murray International, etc), a chunk in State Savings Certs/Bonds and retaining the balance on deposit. Depending how much you allocate to each, you could be pretty confident (but unfortunately not guaranteed) of generating a net income of around 2-3% on your money, while retaining the purchasing power of your capital, with hopefully an acceptable degree of risk for your circumstances.

Hope that helps.

 

[knockshe]

Thank you Sarenco; I just had one of the banks trying to sell me IL MABS with its 1.65% p.a. mngmnt fee, 1% gov levy and 41% tax on any gains. No thanks.