I do not believe interest rates are in hindsight, 12-13 years was far overdue so fixing for anything under 5% and for 5-10 years would be a steal.
I keep hearing this āin hindsightā talk yet Iāve managed to not follow the crowd and have lost zero money on stocks. In fact my only two stocks I currently own have also been strong (Bae & OnOn).
I think many people lack risk management as they do not understand what a huge risk is compared to a super safe one. In 2020 / 2021 it was not risky fixing a mortgage rate for 10 years at 1.80%.
Just like in December 2022 it was not risky locking Ā£10k - Ā£50k away for 1 year @ 4.15% if you would need the money within 3 years.
As a bmx rider of 28 years, within the first 8 years I learnt enough about risk & talent to fuel a lifetime. Itās all transferable. I use the same skills from that to make decisions in other areas.
Iād say right now there is nothing standing out to me as a definite buy, yet I am almost certain there are a few talented souls out there right now doing something smart with finances or at least building up a direction on what to buy into as the direction of money appears more clear.
One things for sure, getting a mortgage in 2020/2021 for 1.80% fixed for 5-10 years is not a āin hindsightā thing. This isnāt magical mystery āwhatās going to happen next in the universeā thinking, money was cheap and between the UK & USA they printed absolute trillions so quickly, inflation was 99% coming fast.
Just like itās obvious right now that this year will finish off with the most people in debt. I bet right now that by next year, life will be more expensive than last yearā¦ itās not in hindsight, itās unavoidable with the awful decisions of the government and all other entities involved.
They somehow manage to always screw over the hardest working.
Go back to 2020 and name a stock youād feel pretty sure will be an alright place to park money for a decade? I chose Bae purely for cyber security and felt absolutely solid about that.
Hereās a thought on current markets;
- Property is not falling to fair value.
- The stock market seems high but not too high although the risk reward right now over a 5 year period appears mixed. Seems like an accumulation period with lower purchases yet not real direction on sentiment.
- Gold has had a good run and has beat inflation. May as well leave invested for 5 more years.
The only certain thing to state currently is that we are 100% in a wage price spiral and itās happening every day, in all companies, with most employees & contractors (especially over 30 year olds) and inflation will reveal its face more than once over the next 5-10 years. We are in a wage price spiral, there is no āin hindsightā to this.
Holding certain commodifies seems good, yet I personally believe that many have had such a good run that the risk reward today is sketchy when looking 5 years out.
Will the property market wangle-on sideways for the next 3 years? Pretty likely. The governments intervention in property has most likely created an artificial bottom even to the long period of artificially low interest rates, this likely means over the next 3-5 years some of the middle & working income people will manage to get into a buying position and buy into the stagnant property market to secure that bottom even further, and then slowly but surely the property market will continue its artificially high growth rate.
None of which is in-hindsight, itās almost plain obvious to somebody like myself. I can just see likely macro outcomes of complex things. The same way Iāve seen OnOn holding as quite possibly the biggest competition to adidas/nike in decades. I put a pair of their shoes on in 2021 and have not taken them off once sinceā¦
Iāve found itās weird to talk out loud about the economy but some people just get it more than others due to huge experience in something.
Hereās my personal view on things with no hindsight, current views:
ā¢ Portugal & Spain are the number 1 locations to purchase fair value property right now and with a growing lifestyle to go with it.
ā¢ Cash is being devalued at an alarming rate and in more ways than one. The governments chose to create debt and create inflation to inflate the debt away. Which means cash is trash. Quite scary actually. Almost definite currency crisis down the line.
ā¢ UK property market will go sideways for 3 years like I said above, before many catch up and begin buyingā¦ still at ridiculous prices which do not match wages or hard work. Itās another strange situation as property workers would typically be laid off yet they are desperately needed to meet demand though theyāll not only want to keep their job but also get pay rises in line with inflationā¦ how do you negotiate that scenario as an employer?
ā¢ Gold & silver are the safest place to be for unused cash.
ā¢ Right now itās not enough to just be mortgage free, life is screwing people over who are even in great situations. Which is why the next 5 years are tough times for sure. Hence why Portugal & Spain now clearly offer a sound proposition for adventurous people willing to move their small business over there.
ā¢ Holding 2 or 3 individual stocks alongside your diversified indexed portfolio is fine if you know what you are doing. That is what I have personally found. Do not buy hype, buy quality and growth when opportunities arise, typically when nobody is talking about them. Removes a lot of risk that way.
ā¢ The US debt ceiling guarantees a currency crisis down the line which will cause known unknowns around the world.
ā¢ The biggest global macro change right now has to do with BRICS and Gold. Quite possibly one of the biggest changes in the world since absolute decades ago. Itās the biggest change happening that hardly anybody comprehends or even knows about.
ā¢ I see lower year on year returns for all asset classes over the next 15 years, that means that most peoples lives will not significantly improve though I strongly side with what every seasoned investor states, that over a 30 year period stocks will do just great.
ā¢ Now, this last one will appear as in-hindsight but I said it in 2020, the UK government should have kept the country open and instead spent the (now) Ā£700,000,000,000 billion on revamping the schools, funding medium sized infrastructure projects, upgrading large towns & cities job prospects and creating excellent long term housing that the country can be proud of.
That last one is a bit in-hindsight.
Sounds gloomy because I have not stated how incredible things are right now for the wealthy, private ballroom events in Italy, secret parties and private yacht trips around Capri, private air travel is booming, the vibe for the wealthy right now when imagining it is absolutely awesome. There is some fun being had and some incredible properties being enjoyed or re-modelled in luxurious locations, luxury hotels & wellness spaās are appearing by the hundreds all over the globe. This is quite literally the era of the wealthy.
As you can get a sense from my posts, I am currently and have been struggling with understanding inequality. At the moment I am personally finding it hard to enjoy the things I used to, when not only am I struggling, but I am not struggling as much as others and that bothers me because I do not like the thought of good people going through disgustingly hard times that no actual human can adhere to for multiple years or longer.
