Should we sell all our investments and sit with cash......

[Earlybird]

.....until the economic outlook stabilizes?

If so, why?
If not, why?

Is anyone as worried as I am? No one seems to have a solution, and those in charge seem completely incapable of reaching consensus on a plan.

[MoonlightandRoses]

Sorry, didn't want to leave you unanswered.
However, no-one can give you a definite comment on that one without knowing your current financial situation, current investment performance, in what you're invested, risk appetite, future returns requirements etc.

If you are really concerned then you need to get professional, paid for, independent financial advice - even then, they will only be able to suggest ways of acting - ultimately you need to make a decision as to what will be best long term for you.

[Earlybird]

Thanks for your answer.

I have professional help, and together we agreed to sell out of about 1/3 of what i have a few days ago.

I am worried about the economic situation in Europe. With Greece possibly leaving the Euro, Spain in crisis, Italy/Portugal/Ireland possibly on shaky ground - nothing looks positive. And as bad news trickles out day by day, the markets keep going down, eroding most everyone's investments. The European leaders seem to squabble and discuss endlessly - without coming up with a workable solution. The ECB looks weak and ineffectual.

China's numbers came out recently worse than expected, so we can't count on them to be the 'world's economic engine' to pull us out of the mess.

And jobs numbers in America released yesterday were a shock to everyone - much worse than anticipated.

Perhaps scaremongering, but I read yesterday that housing markets in Canada and Australia are a worry and that the 'bubble' is bursting in those countries.

So, I am raising cash, moving to the sidelines and waiting it out. I won't be earning anything on my money, but I won't lose it either. And when the trend changes and things finally do start to improve, I'll have money ready to invest.

MoonlightandRoses - what are you doing with your investments?

[MoonlightandRoses]

Oh, I'm glad of that - wasn't clear from your OP.

For me - mix of cash, equity and property - no point moving on the equity or property as profit would be minimal and the interest paid on the cash raised ditto, so am collecting dividend and ignoring the property for the moment.

I was also very lucky to buy low and don't need to raise cash.
For investment, I like the instability - there are some good bargains out there.
Yes, Canada, Australia and possibly Hong Kong and Singapore are heading for bubble bursting, but the housing market is cyclical anyway. It's just a matter of finding the next upwards trending country.

China's figures shouldn't really be a surprise - they've been overheating for a while now.

The Greece / Spain headache is far more concerning but we'll have to wait until after the Greek elections in a few weeks. So far any polling done there is unable to provide a clear picture of what the electorate will do.

After Thursday's referendum on the Stability Treaty, Ireland's position is more secure and the IMF remain supportive, which helps.

[MooncupGoddess]

It's so hard to tell... but remember, the market knows all these things and has fallen a fair bit already as a result.

My view for what it's worth is that the ECB (and UK, and certainly the US) will print money rather than let the economy slip into a really damaging depression. So cash isn't necessarily safer than the duller sort of equities.

[Earlybird]

Should have been clearer - last week sold 1/3 of what I have invested in equities. Haven't made any changes with property investments.

Like you, I bought low, so while I haven't seen losses yet (or not many), I have seen a significant erosion in gains. As a natural buy-and-hold sort of investor, the hardest lesson is selling to preserve profits and/or take gains. Also learning about how wise it is to sell when the market is trending down to realise profits, and then a few weeks/months later, can buy those shares back at a lower/more favourable price.

And fwiw, have also been aggressively throwing extra cash at paying down mortgages, which I figure is a better use than having it sit in cash.

[Corgito]

I've been gradually cashing up for about two years... waiting until investments show a profit and then realising it. Some I've invested back in different funds because they are cheap at the moment. Some has gone into my property which, owing to location, is beating the market. Trying to keep a working minimum in short-term cash deposits because they're not really beating inflation. Longer-term bonds are only slightly more attractive

[ChrissieLC]

With cash you can be guaranteed to loose against inflation.

Personally I am all for deposit based investments (ie capital guaranteed investments with higher returns than a deposit account...ie the interest you earn is linked to the FTSE however your capital is guaranteed.

I however personally am piling in the investments now. Buy low sell high, it's quite simple!! But that is my personal situation, and may be different for anyone else. it depends whether the money is spare or could be used to pay down debt realy....

[hotkerry]

Hi All,
I found this topic and I think it is quite interesting. I want to share with you the solution I found for myself.
I read a lot about investing options and found out that the safest investment with good return is forestry. Last year I joined a program for quick growing Paulownia plantations which suites me and guarantees my funds for the education of my children. I'm quite happy now to see how my trees are growing and to be honest I do not worry about the problems with the £, EURO, Greece, Spain ...

[micmar]

No one knows- full stop -some have an idea- some better than others - few are right most of the time-most are wrong most of the time!!
It has been found that monkeys picking stocks can keep up with average brokers and also throwing darts at a ''dartboard'' listing stocks etc-
I am in cash - watching inflation erode our savings thanks to Quantatative easing -but hoping to buy Uk home - but Govt & economy needs high house prices to keep economy ( what is left of it !) going- hse price falls brings gloom - yes it is possible to have more!
Govts historicaly deal with debt by inflation so watch value of pound drop against external currencies and anything we have to import - ...like food!! and everthing else.
watch out for 'charges'' - get to know what they really are as over many years they will cost you dear - look for low charges- high charges do not promise results. don't forget tax of course!
always think long term with investments- minimum 7-10 yrs if you are lucky.
Pay extra of mortgage each year
Get cash isa as a minimum £5600 each adult per annum
have lookie on peer to peer lending - i use (if mods allow) funding circle and ratesetter- money NOT protected but low risk - i lend to 300 companies - £20 - 40 pound each- each tells you risk etc and i think it is equal to inflation ??
get a investment /money mag and start looking at what the pundits are saying
also good weekend paper 'money/finance section - review 2-3 to see what you like.
EU has real financial problems along with Uk & USA- and of course China- all interdependant!! it is generally thought that all Govts are kicking the can down the road - there is pain to come -too much debt and it is still in the banking systems- no one really knows how n much.
i.e. Spain - lots of banks holding mortgages - say on 350,000 euro home...which is only going to be sold for ??? make up your own numbers - the bankers do!
i.e. 2 greece /spain etc owe billions to other EU AND UK/USA banks...it is our problem big time if they go down the pan! No one is bailing out greece /ireland/portugal- they /we are bailing iout ourselves/each other! it's fingers crossed time.

Japan has been in recession for 20 yrs- in 1990's it's stock market was nearly or about 40000- it crashed to 7000 approx - look where it is now???
many are saying it is coming out of recession??????? but when it goes ..when?? it might be worth having a few bob in there
most people in stock market over past 20 odd yrs have lost out big time - me included! and that is not counting inflation!!
good luck