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  #181  
Old 06.01.2021, 18:18
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Re: Equity Portfolio Advice

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Markets crash. Markets recover. Inflation takes your money forever.
You mean the negative inflation we have for the last 5 years?
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  #182  
Old 06.01.2021, 18:25
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Re: Equity Portfolio Advice

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You mean the negative inflation we have for the last 5 years?
Not sure where you're getting your figures from but that's incorrect. 2020 might be negative. It seems to be a relatively common misconception that there's no inflation in Switzerland. That's simply not true.

My guess is it was your employer that told you this.
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  #183  
Old 06.01.2021, 18:27
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Re: Equity Portfolio Advice

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You mean the negative inflation we have for the last 5 years?
sorry I promised I wouldn't go back to this topic

but since I posted on this topic last month BTC only up close 100%

a bit more seriously my estimation is 2021 will be very similar to 2020 with a lot of uncertainty, lockdowns, small business suffering ... meaning central banks will print, print, print devaluing our hard earned fiat. Bitcoin does look attractive (at least to me) from that perspective

As I said earlier read on some maximalists and some contrarians and make up your own mind - this isn't advice
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  #184  
Old 06.01.2021, 18:31
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Re: Equity Portfolio Advice

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Not sure where you're getting your figures from but that's incorrect. 2020 might be negative. It seems to be a relatively common misconception that there's no inflation in Switzerland. That's simply not true.
https://www.statista.com/statistics/...f-switzerland/

2012 to 2020 there have been 6 years with deflation and only 3 with positive inflation.

That money ain't getting eaten away by anything. It might have not grown due to lack of market investment, but it's not getting eroded currently.
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  #185  
Old 06.01.2021, 18:36
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Re: Equity Portfolio Advice

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https://www.statista.com/statistics/...f-switzerland/

2012 to 2020 there have been 6 years with deflation and only 3 with positive inflation.

That money ain't getting eaten away by anything. It might have not grown due to lack of market investment, but it's not getting eroded currently.
If you only look at a small basket of goods and services it may be true. If you look at house prices, classic cars, fine wine, paintings etc it's a different story. Then of course equities, real assets that inflated in price nicely in the period you mentioned. Definitely no reason to hold cash.
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  #186  
Old 06.01.2021, 18:38
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Re: Equity Portfolio Advice

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sorry I promised I wouldn't go back to this topic

but since I posted on this topic last month BTC only up close 100%

a bit more seriously my estimation is 2021 will be very similar to 2020 with a lot of uncertainty, lockdowns, small business suffering ... meaning central banks will print, print, print devaluing our hard earned fiat. Bitcoin does look attractive (at least to me) from that perspective

As I said earlier read on some maximalists and some contrarians and make up your own mind - this isn't advice
Equities look attractive as they are real assets that generate future streams of income.

I think that blockchain technology itself has many potential useful applications but as for Bitcoin itself I just don't understand the attraction.
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  #187  
Old 06.01.2021, 18:47
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Re: Equity Portfolio Advice

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If you only look at a small basket of goods and services it may be true. If you look at house prices, classic cars, fine wine, paintings etc it's a different story. Then of course equities, real assets that inflated in price nicely in the period you mentioned. Definitely no reason to hold cash.
I think arbitrary baskets of goods have limited use for the investor. Ideally, you would forecast your spending and estimate the costs of these into the future to get a picture of what inflation means for you.

I think the big items are usually:

- taxes
- childcare
- education
- housing
- investments for future retirement
- transport
- food

and i think for me these are:

- taxes (stable)
- childcare (increasing - quite heavily)
- education (increasing)
- housing (slightly increasing - i mostly hedged this cost through owner occupancy)
- investments for future retirement (increasing significantly - maybe there will be a crash?)
- transport (increasing)
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  #188  
Old 06.01.2021, 18:57
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Re: Equity Portfolio Advice

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Equities look attractive as they are real assets that generate future streams of income.

I think that blockchain technology itself has many potential useful applications but as for Bitcoin itself I just don't understand the attraction.
as a store of value. you can verify for yourself this year more and more institutional investors have allocated a small % of their assets into bitcoin. the lindy effect also helps in that it's been around and survived.

if you take a long term view... for my kids who are very young bitcoin will be as ubiquitous as the internet.... think back to the internet evolution up to today. Few could imagine back in 2000 that a mere 20 years later the internet would have been the most transformative invention ever.

here is an article with a bullish case and another with the exact opposite view. who knows which one is right. My contention is that allocating 1%-5% of assets in your bank account is a low risk option (if you can afford it)

https://vijayboyapati.medium.com/the...in-6ecc8bdecc1

https://amycastor.com/2021/01/02/202...c-predictions/
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  #189  
Old 06.01.2021, 20:20
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Re: Equity Portfolio Advice

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If you only look at a small basket of goods and services it may be true. If you look at house prices, classic cars, fine wine, paintings etc it's a different story. Then of course equities, real assets that inflated in price nicely in the period you mentioned. Definitely no reason to hold cash.
That small basket of goods is called the official inflation.

Housing and equity prices are increasing as there is a negative correlation between these and the base rate (there was no alternative for the money to go into as bonds and cash don't appreciate anymore). Once the inflation (and along with it, the base rate) starts to rise these asset classes will slowly (or not so slowly) align back to their real place (which is much lower than the current levels).
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  #190  
Old 06.01.2021, 21:10
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Re: Equity Portfolio Advice

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that's why I said I'm waiting for the crash (that ain't comin').

But I didn't say all-in NASDAQ, I said I'd rather do that instead of the SP500. Just look at the difference of the two since 2002. (about 3x over to NASDAQ).
I might just go VGT instead.
There was a huge crash in March, you could wait a long time for such a good buying opportunity, however it will not seem like a good time to invest when it is. Just as many people said to Terry Smith when he set up Fundsmith, such a bad time, now they say it's success was due to such good timing
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  #191  
Old 06.01.2021, 21:14
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Re: Equity Portfolio Advice

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There was a huge crash in March, you could wait a long time for such a good buying opportunity, however it will not seem like a good time to invest when it is. Just as many people said to Terry Smith when he set up Fundsmith, such a bad time, now they say it's success was due to such good timing
I call the 2008 crash a good opportunity, when most of NASDAQ lost 50-80% of their previous value. In March it was merely a stronger correction of already inflated prices. Was a good opportunity nevertheless, but I'm expecting a bigger meltdown.

Basically the stock market's current pricing does not really reflect the rampage that Covid did with the hospitality, entertainment and aviation sectors, just to name a few. I want that revelation to come. Maybe they will come with the 2020 GDP numbers, maybe not.
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  #192  
Old 06.01.2021, 21:23
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Re: Equity Portfolio Advice

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I call the 2008 crash a good opportunity, when most of NASDAQ lost 50-80% of their previous value. In March it was merely a stronger correction of already inflated prices. Was a good opportunity nevertheless, but I'm expecting a bigger meltdown.

Basically the stock market's current pricing does not really reflect the rampage that Covid did with the hospitality, entertainment and aviation sectors, just to name a few. I want that revelation to come. Maybe they will come with the 2020 GDP numbers, maybe not.
9817 on 19 February to 6860 on 23 March or 30% fall in 5 weeks is fairly spectacular. We are up about 87% in 8 1/2 months, from the low point. You had your chance, what makes you think you would do better next time?

Entertaining & aviation sectors have been trashed, the market has been brutal to them, rightly so.
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  #193  
Old 06.01.2021, 21:41
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Re: Equity Portfolio Advice

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That small basket of goods is called the official inflation.

Housing and equity prices are increasing as there is a negative correlation between these and the base rate (there was no alternative for the money to go into as bonds and cash don't appreciate anymore). Once the inflation (and along with it, the base rate) starts to rise these asset classes will slowly (or not so slowly) align back to their real place (which is much lower than the current levels).
I think Phil_MCR's post lays it out well. Also the time period you mention is really quite short. All that said, there can be no doubt that CHF is one of the better currencies to hold, impossible with the Turkish Lira! Moreover, there's probably a good case for holding CHF as an alternative to bonds if your risk profile doesn't accommodate 100% equities.

As for future monetary policy, I have no idea. I would think with the mobility of capital, the SNB will need to keep the base rate low to avoid CHF strengthening too much and damaging exports.

Here's a chart showing the real returns of various assets from 1802-2012. It would be interesting to see how CHF has fared during this period but regardless I know what I would prefer to be holding

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  #194  
Old 07.01.2021, 00:30
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Re: Equity Portfolio Advice

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I call the 2008 crash a good opportunity, when most of NASDAQ lost 50-80% of their previous value. In March it was merely a stronger correction of already inflated prices. Was a good opportunity nevertheless, but I'm expecting a bigger meltdown.

Basically the stock market's current pricing does not really reflect the rampage that Covid did with the hospitality, entertainment and aviation sectors, just to name a few. I want that revelation to come. Maybe they will come with the 2020 GDP numbers, maybe not.
But it does reflect what's happened to those sectors. IAG are down 66% this year for example.
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  #195  
Old 07.01.2021, 09:40
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Re: Equity Portfolio Advice

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But it does reflect what's happened to those sectors. IAG are down 66% this year for example.
Thats after rising 72%% since 28 September.

I can't accurately do the Figures for Rolls Royce, as the prices have not been corrected for the rights issue @28p, more than doubling the value of any holding at the time.
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  #196  
Old 07.01.2021, 11:48
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Re: Equity Portfolio Advice

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But it does reflect what's happened to those sectors. IAG are down 66% this year for example.
Amazingly, I'm up on IAG and I bought some shares pre-covid
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  #197  
Old 07.01.2021, 13:22
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Re: Equity Portfolio Advice

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There was a huge crash in March, you could wait a long time for such a good buying opportunity, however it will not seem like a good time to invest when it is. Just as many people said to Terry Smith when he set up Fundsmith, such a bad time, now they say it's success was due to such good timing
TBH as its a defensive fund set up right at the beginning of a very long bull market its terrible timing.
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  #198  
Old 07.01.2021, 13:24
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Re: Equity Portfolio Advice

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TBH as its a defensive fund set up right at the beginning of a very long bull market its terrible timing.
Still top of the league since inception, very few have beaten without taking a hugely higher risk. Beating the S&P 500 constantly with a defensive fund, whats not to like?
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  #199  
Old 07.01.2021, 14:24
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Still top of the league since inception, very few have beaten without taking a hugely higher risk. Beating the S&P 500 constantly with a defensive fund, whats not to like?
Quite - I was singing its praises. If it was set up before the recession its relative performance would have almost certainly been better.
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  #200  
Old 07.01.2021, 15:58
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Re: Equity Portfolio Advice

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Quite - I was singing its praises. If it was set up before the recession its relative performance would have almost certainly been better.
As Terry Smith said at inception, he expected the fund to underperform in good periods & have its best performance when things are bad. He was very confident there will be many bad periods , his aim was to do OK when things are good & very well when things are bad.
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