How many here are in cash?

Saturday, Sep 07 2019 by
7

I would be interested to know how many investors are currently in cash. I am 90% in cash with 10% in gold. Like many here I had a good return holding mainly equities over the first 6 months of 2019, achieving just short of 8%, which was greater than my target for the year. But at the end of July I got spooked and sold my shares.  I feel that Brexit has not been fully priced into the market, and suspect that a no deal exit will set off more panic in the city. My inclination now is to do nothing until we have had a General Election, which could come over the next 2-3 months. I would be interested to hear what other strategies people are using in these very uncertain times.

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52 Posts on this Thread show/hide all

Fegger 10th Sep 33 of 52
2

Approximately 10% cash so could take advantage of any downturn in next 2 months. But would not want to be more out of market as have learnt that it is too hard to time . The UK market value has also been IMHO held back by Brexit concerns. If the EU situation was seen to be resolved the market could move upward quickly.

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Bonitabeach 10th Sep 34 of 52
4

Currently:

USA               70% (Mainly tech + financials (not banks))

 UK                  20% (Property + financials (only Barclays in banks - mistake!)

 EU                    5% (SWEDBANK + AEGEON ) both very recent buys

CASH                 5% - pretty normal for me.

The drift to the USA started for me in 2012 and the primary driver was the view of an undervalued $ against an overvalued £. Subsequently I have concluded there are far far more dynamic opportunities in the US market than the UK. The general quality of listed companies in the UK, particularly in the small cap sphere, has declined badly; too much dross very few gems.

Good luck all, wherever you roll your dice.

Bonitabeach

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john652 Wed 10:24am 35 of 52
1

I think the clarification CheshireUk gives that when stating 90% cash he really means it, so 90% cash across all his investment portfolio. Not as sometimes is the case ‘I am 50% in cash’ meaning in your trading account but 90% of your investments are fully invested in the work pension funds or your SIPP. You are not really in cash if the majority is still invested elsewhere. For me this is an important clarification, all my income is through investing/trading. Being out the market at 90% cash is certainly a conviction trade, but re-entering the market will take all sorts of biases to overcome unless you have a very clear plan, ie on this % fall, buy this.

So would be very interested for those in cash what the reinvestment plan is.

Myself I am at most 10% true cash , another 20% bonds/gold etc that would be sold to reinvest if the ftse indices were down about 25%. - but again takes real conviction.

I also run a small watch list of stock I’d like if they where cheaper & an entry price for existing holdings to top up - for small caps, the prices are so volatile, this works without a big crash! .

Would others please share their thoughts and plans?

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tb1234 Wed 10:35am 36 of 52

In reply to post #511736

Unfortunately not Herbie

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Martin C Wed 10:53am 37 of 52

My SIPP is currently 55% gold (mostly derivates, but a few miners as well), 32% long in equities, 12% short (derivates of Dax and Euro Banks), and 1% cash.

Strategy over the last 3-6 months has been reducing longs, increasing gold and short positions.

Have exited/reduced most of the longs that i see as being cyclical, including some which i really like, such as SCS. Rationale for selling was that profits warning are now beginning to hit retailers which have so far been resilient to the downturn, eg ShoeZone.

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codefluence Wed 11:00am 38 of 52

In reply to post #511321

You have the option to transfer part of your ISA into an IFISA. Some of the IFISA providers offer relatively low risk accounts, like property backed loans + provision fund. I have one with Assetz Capital (disclaimer: I'm a shareholder too) as they only operate outside of London/the M25.

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codefluence Wed 11:58am 39 of 52

Trying to work out something not too unbalanced that works reasonably well in different kind of scenarios. Even experts have no clue about what is going to happen. We could be heading for another big recession or we could be just at the start of a japanification period with all the central banks experiments we had in recent times. So my strategy is to patiently burn cash if I find solid opportunities, but also keep some margin for a potential macro environment going ugly. At the moment:

50% UK stock
20% cash
20% long GBP / short USD (recently opened, aware of the short term risk)
10% short S&P 500

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EssexBoy Thu 3:31pm 40 of 52
1

I moved to greater caution nearly 2 years ago, and intend to await Leave EU, China trade wars etc. Caution does not mean selling all equities.

Rather than cash, I use ‘close to cash’ via short duration bond ETFs including IS15 and ERNU. The latter maintains my USD exposure.

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CheshireUK Thu 9:45pm 41 of 52
1

I would like to thank all those that have shared their thoughts over the past few days. It convinced me that I had been rather hasty on selling up and going into cash. But I did significantly reduce my risk, as the vast majority of my holdings were in UK stocks. My SIPP is now

10% in gold

25% in a Vanguard Life-strategy 60% equity fund

25% in a Troy Trojan Fund

25% in 20 stocks from the Stockopedia Tiny Titans folio

15% Cash

I realise that the market may correct at anytime, but the 15% cash will cover my drawdown needs for the next 2 years. And as I have seen in so many studies, it is very difficult to time the re-entry after a fall.




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wilkonz Fri 6:07am 42 of 52
2

In reply to post #512671

CheshireUK. The new portfolio makes sense for a risk averse investor until one gets to the '25% in 20 stocks from the Stockopedia Tiny Titans folio'. Whilst the Tiny Titans might collectively do quite well - and it seems likely that microcaps could surge as investors regain their appetite for risk (which is what is happening in the USA) - I'm puzzled that you should buy twenty. The dealing costs and the spreads - typically 3-7% - will eat into your profits and delay any meaningful returns. For me, the cheapest way of investing in small caps is to buy a tracker fund the specialises in that kind of stock, for example £RTYS (I hold) which tracks the Russell 2000 but there are plenty of other funds available. One advantage of investing in funds and ETFs, apart from diversification, is that the spreads are small or even zero.

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millen Fri 7:57am 43 of 52

In reply to post #512671

Needing to draw down 15% of one's SIPP over just 2 years sounds precarious - perhaps I've misunderstood? I thought 3-4% pa drawdown was the norm, unless one is very old.

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InvestedGeordie Fri 8:58am 44 of 52

I think it's a really interesting discussion. How much cash is prudent? How much should one pay attention to Macro env? How much value is lost / gained by looking to time the market? 

I'm holding more cash now (both inside and outside of my ISA) than I ever have before. On top of this I am paying down mortgage debt & looking to curb spending.

A tweet I put out, this morning... https://twitter.com/InvestedGe...

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Carey Blunt Fri 9:11am 45 of 52

I am slightly more in cash than I normally would be but not on purpose. I try to be fully invested generally but have recently put in a lump sum into my investment account which I am trying to allocate. The cash I do have is held pretty equally in Euros, USD and GBP until I get it invested.

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john652 Fri 9:54am 46 of 52

Hi Cheshire, you might want to look at PAT, personal assets trust as run by Sebastian Lyon, who runs Troy Trojan, almost identical but it’s an investment trust. Ruffer or Troy, can’t remember which, in the latest newsletter cover the big liquidity risk all funds now face due to redemptions & being forced sellers of their most liquid & best investments, of which they will suffer. PAT won’t as it’s an investment trust.

I did a lot of research into the ‘all weather portfolio’ including reading tony robbins ‘money master the game’ and then all Ray Dialios stuff & a load of other stuff. Troy & Ruffer are pretty close to the consensus of the diversification to avoid big losses and slowly grow your capital. However Troy & Ruffer have made a big punt on inflation with Inflation linked bonds here & US.

That said, for simple, good diversification for a large part of your money, they score highly.

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jwebster Fri 11:24am 47 of 52
1

I'm not holding much cash, don't think we're at peak yet, I'm relying on the leader of the free world wanting to win an election at all costs, to cover off recession risk to stocks markets.

Last few days have seen a 'hard brexit off' rally. Bought some cheap UK centric shares recently now on a rip: Countryside Properties (LON:CSP) British Land (LON:BLND) Newriver Reit (LON:NRR) Provident Financial (LON:PFG)

Of course, the twists and turns of UK politics can change that trend quickly in the opposite direction

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RobertScott Sun 6:52am 48 of 52

Gone wholly to cash ; waiting for the next crash of course .

Regards , Robert .

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Merlotman Sun 9:39am 49 of 52

In reply to post #511516

Agree but paying the higher rates charged for lifetime mortgages is hard when you are as mean as I am! 

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gpacker Sun 10:05am 50 of 52

In reply to post #513256

But... if they charge 5% per annum and you can make 10% + per annum its a no brainer.

£100k life time mortgage withdrawal at 5% is 5k per year, a 10% trading investing return on the same £100k is 10k (uncompounded) - Profit/variance of 5k

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Laughton Sun 11:13am 51 of 52

In reply to post #513261

If only we could guarantee that we were going to make a 10% return each and every year though.

How do those figures look if you suddenly have a crash and a big down year (or even no crash and a couple of moderatley down years). And don't forget the tax on the gains (if you should have them).

The original poster sounded to me as though they were fairly conservative and looking to reduce risk rather than the other way around.

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gpacker Sun 1:36pm 52 of 52
2

I think taking cash out with a lifetime mortgage that you don't pay monthly interest on for the rest of your life is the safest most conservative way you can go. So long as the person does not use the cash to fund a lifestyle, holidays cars etc... then even just holding the cash readily available for a crash could be wise.

It could be the best way to fund a retirement even if shares are not your bag.

How about buying a rental property cash which gives 500 pound per month cash flow, the unmortgaged property then also becomes an asset for inheritance purposes to offset the loss of your kids inheritance from the equity release.

The maths are so simple I don't know why all retirees with equity do not choose to do it.

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