Saturday, October 27, 2007

I need some investing help

Readers, I am ashamed to admit that, having failed to find a suitable investment target in August (see here), I have still not invested the money sitting in my selftrade account. Worse, I have since opened a trading account in the US and have failed to invest that money either.


I know one should not be afraid to hold cash in uncertain times but this is getting ridiculous.

If I believe that stock markets in general (in the UK and US, at least) are probably over-valued, I'm torn between spending some considerable time identifying individual stocks I regard as under-priced (like I did, by accident, with Morrison's - although not immediately...) or investing in a different asset class or using a different approach. Which? I'm not keen on anything that requires active management... so no short term shorting strategies, etc.

Perhaps I should just put it all under the bed.


kyb said...

I am in a similar position, so let me know when you get the good stock tips.

I've currently squirrelled most of it away in fixed rate fixed term savings bonds, around 6.9%.

It's sort of the easy option, but it's still better than under the bed.

Fortes said...

If you believe that the market is overvalued and want to bet on that, you can look into some counter-market funds. This page goes over a few of the options:

(I invested in SDS as a hedge, which does twice the inverse of the market)

Richard Brown said...

@kyb: good point... 6.9% is not to be sniffed at

@fortes: thanks... will take a look

Peter said...

I have just recently started messing with stocks. I have opened an account in the US a long ago and I have been in a similar situation as you described.
Just a bit over 2 months ago I decided to buy the montly stock advisor from the Motley Fool brothers, so I do not have to worry much about picking stocks. I have read through a dozen past issues and the current one, then I hand picked 8 stocks (diersify, diversify, diversify...). As of today I am 14% up (after discounting commissions and the annual subscription).
These investments are primarily long term, but they may need a bit of maintenance on a monthly basis. I am not sure how long I can manage this growth as I am new to all this, but the US market can only go up from where it is now.

Richard Brown said...

@peter: very interesting. I had been working on the asusmption that the US market was pricey... but if I examine why I think that is, I can trace it back almost entirely to the fact that one stock is quite high. I really need to start doing some research.