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.
Cheshire UK. Holding 90% cash seems overcautious despite all the uncertainties. The 10% in gold is probably about right (although you might want to consider other precious metals). At current interest rates (say 1%) the cash will actually lose value when you factor in inflation (say 2.5%).
Whilst it makes sense to prepare for a worst case scenario, you can remove a lot of the market risk (systematic risk) by asset allocation if you go for low risk investments in relatively safe assets and you diversify those assets. Be prepared to invest overseas. Brexit is a big deal in the UK but the average citizen in India or China isn't that bothered.
My recent portfolio rebalance has included things like:
3i Infrastructure
CG Absolute Return
£IUSU (the S&P 500 utilities sector)
£HVPE (HarbourVest Global Private Equity)
In addition I have cut back on equities in developed nations and increased my holding in mutual funds (OEICs) that focus on India, other emerging economies and, cautiously, the US. There are also some bond funds that should return a reasonably safe 3-4% even if the world stock markets experience a 50% crash.
As always, do your own research and make your own decisions. If 90% cash helps you to sleep better at nights, then it may be the best investment for you.
