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Contact us | www.future-financial.co.uk | E-mail your comments | Archive | |
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Things could be worse ... and could get much better soon According to American investment guru, Warren Buffett, now may be the time to invest in equity markets; strange as it might seem.One of the wealthiest investors in the world, Warren Buffett has made his money-and, to be fair, lost some too-by not following the investment 'herd' but by being prepared to be different. If this sounds counter-intuitive, it is worth considering that markets are currently undervalued in historic terms, so that there is scope for a significant recovery. What is not clear, is when this will take place, or how long it will last. Nor are there any guarantees- that is not how investment markets work. What we can say is that every fall in market values to date has been followed by an upsurge in prices. No simple rule If there was a simple recipe for investment success, everyone would be rich! In fact, any general comments always need to be viewed with a discerning eye, selecting only those indicators which appear to accord with the individual's attitudes towards risk and reward. According to Buffett, the key to success is being prepared to be different from everyone else. Writing in the New York Times on 16th October 2008, he wrote: "Be fearful when others are greedy, and be greedy when others are fearful." What he really means is that you should buy at the bottom of the market and sell at the top. By following other investors too closely, you can frequently end up doing the exact reverse. That is why it is so important to take professional independent financial advice before making any investment decision; and why we are here to help you. It is worth also considering Buffett's other "money making secrets", which include being prepared to re-invest profits, being decisive (which he picturesquely describes as "never suck your thumb") and, perhaps most importantly, knowing when to quit. The economy The measures announced in November's Pre-Budget Report (such as the reduction in VAT) and the cuts in base rate, have yet to make much impact on the economy and investment markets. It is unlikely that much will happen quickly, because the cut in VAT is cosmetic and the impact of public spending plans will take time to filter through. Whatever one may think about the origins of the credit crunch and associated investment market downturns, we are now in a post-crisis world. That is not to say there will be no further reversals; such is impossible. However, with concerted government action here and in most other parts of the world, we should be confident that recovery will come and that with it, those businesses that survive are likely to be leaner and more competitive. Ideally, it would be good to see a renaissance in British manufacturing, which has long been neglected in favour of the City of London. But whatever happens, by working together and taking a positive action, we can look forward to a better 2009 and beyond. |
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©futurefinancial This publication represents our understanding of law and Inland Revenue practice as at the date of publication. It does not provide individual tailored investment advice and is for guidance only. Rules may vary for Scotland and Northern Ireland. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. The value of land and buildings is generally a matter of a valuer’s opinion rather than fact. The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Your home may be repossessed if you do not keep up repayments on your mortgage. Loans are subject to status and written details are available on request. Always seek independent advice from a qualified financial adviser. Think carefully before securing other debts against your home. Fees for mortgage advice maybe charged and for details of these please contact us. The Financial Services Authority does not regulate all the activities undertaken by the company, including taxation advice and overseas mortgages. |
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