If you’re buying daily then the dealing fee-less index fund is a no-brainer, isn’t it?

Also, I feel that in a nightmare scenario you don’t want to be going near a spreadbetting account that is psychologically attuned to encourage you to trade. (http://monevator.com/how-a-boring-broker-will-make-you-richer/)

Chucking money into some unseen and rarely updated index fund seems much more the thing too me.

As for what happens in a Grexit, the jury is definitely out for me. I personally think the market has anticipated it twice over. But there could easily be unforeseen contagion affects.

One share you might want to look at given your gloomier prognosis is the money printer De La Rue. I’ve noticed it rising in recent days…might someone be thinking they’re in line for printing some extra banknotes? ๐Ÿ˜‰

Completely unrelated, but this might help in your energy footprint reductions:
http://physics.ucsd.edu/do-the-math/2012/03/pilot-lights-are-evil/

“I personally think the market has anticipated it twice over.”

I’d agree in principle with this, but not in practice. The market could have anticipated it five times over and still go and fall into oblivion after. Right now I’m just trying to stay away from anything that might need bank support, because if a company needs a loan to not go under or have to raise money in a weak market there will be trouble.

@Monevator yep, I was working this out while writing the post. Before I started I didn’t realise just how restrictive the 1 point limit was on IG for this kind of slow build. As is often the case, the first and obvious solution turned out not to be so good. The starting point was to add to my HYP. which turns out to be impractical at such a small scale. The CPUKI is indeed the way to go.

I’ve survived the IG Index disco lights, though that’s a great post ๐Ÿ™‚ I’ve lost a few hundred pounds there, but one was a deliberate short against a holding I had, so it did exactly what I wanted. The other was incompetence on my part – I didn’t understand the margin issues and got closed out on part of a short. The education was good enough value – stick up collateral of at least half the value of the nominal purchase or pay more attention.

Funnily enough DLAR is already on my radar, not exclusively from a Grexit POV. The valuation matches my criteria and they have a fairly decent economic moat. While everyone says we are going cashless, that’s probably like the paperless office everybody was talking about when I started work. Now all I need is for these Grexitters to stop ramping it ๐Ÿ˜‰

@Surio even my 15 year old central heating boiler (furnace to Americans) has electric ignition that strikes each time it starts. Pilot lights, pah. I am surprised there is still so much antediluvian technology in service in the US ๐Ÿ˜‰

@Rob I’m with that too. That’s the whole point about a financial panic, it’s irrational. Your head can be saying run towards the storm, but when it comes to actually buying when all around is falling and the whole screen lights up red it’s still hard to do, there’s a knot in your stomach that is telling your to join the crowd and run for the hills.

The rewards for those that charge into the crash are potentially high, but they’re high precisely because there aren’t many people with that kind of chutzpah. I don’t even know if I’m one of them now, which is why I’m trying to do the thinking ahead of time ๐Ÿ˜‰

Warren Buffet would remind you to place several large bets rather than a multitude of small bets.

Interesting word, “Grexit”. As in where did it come from? Who launched it, and why?

It seems to have formed a meme suspiciously rapidly. As though by giving it a name it becomes more likely to happen. Similarly, have you noticed how the new synonym for ‘the economy’ is now ‘the recovery’?

@George That may be true, I haven’t got his talent at valuing prospective assets. Nor his deep pockets ๐Ÿ˜‰

@Macs probably somebody trying to say Greek exit after a few sherbets. Just doesn’t roll of the tongue.

Hadn’t noticed too many people claiming a recovery. Last I heard again!

@ermin Have a good storm! Hate to say this but gold at $3000 an ounce could happen should everything go crazy and is not totally out of the question. If things get really crazy and the world reverts to gold standard $6000 is the target price according to my calculations. Are we doomed ? Probably not, but I’ll bet ya gold reaches at least $2000 an oz. before it’s all over.

Hi Ermine, V-Interesting, But?
Are we sure that Greece will leave Euro?
What would happen if Greece left the Euro,then defaulted, ref Iceland and the economy started to grow?

Would this make other Countries, [Spain & Ireland} have second thoughts.

There is a lot of Gas & Oil in the Agean, plus China owns ports in Athens and would love this G & O.

Could Greece benefit from the above, after all China could pay off Greeces debt using US IOU’s and in the process get rid of some of its exposure to the US bonds and get a long-term energy supply.

Maybe that is what Germany fears most, loss of this potential energy supply, a further break up of the Euro, leading to a break up of the EU?

As for Gold, sounds good, but it as been known for Governments to Legaly steal/buy back Gold at a Government stated price. After making it illegal for Joe Public to hold Gold.

This is what the US Government did in 1933 and could do again in 2013. leaving only States and large Multi-nationals to hold Gold?

@Lupulco – If a default had happened before I suspect it would bring down the banks and then governments, but I’m pretty sure that Europe is now Greece’s largest creditor. 134bnEUR to the ECB, 113bnEUR to Euro governments, $22bnEUR to the IMF with just 55bnEUR from foreign holders of Greek debt and 100bnEUR from foreign holders of Greek corporate and household debt (figures from Businessweek).

In essence it would probably have defaulted given market forces, but governments have poked the nose in to ensure that instead of the banks defaulting, which probably would have brought down Europe, governments would likely default, which would probably bring down Europe, but with smaller odds.

If what I’m reading is correct, banks are on a knife edge as are Governments. I suspect banks are now less exposed, but some might still be vulnerable. I suspect Greece will default and transfer its debt onto Europe permanently enforcing an era of graft and making do with less consumer goods. There is a reason why it is Greece with such debts and that makes me think that they will struggle for growth whatever the scenario… they just don’t have that German attitude. We as a part of Europe are just going to have to work harder and pay more taxes to clear up this mess. If they default I suspect the whole of Europe is going to have to accept lower living standards, but sometimes that’s a good thing.

[…] Grexit: Ambulance chasing ahoy? – Simple Living in Suffolk […]

[…] So although it’s the first suggestion about the Greek crisis might work at a fundamental level, I don’t expect to see Greeks to vote for a Greek THA. That’s the trouble with IMF tough love in a democracy, it’s not a vote winner. And herein lies the problem with democracy all round – it’s hard to get votes for toughย  decisions. I’m still expecting a Grexit… […]

[…] may have to find another platform and use DW’s ISA allowance to implement this approach to Grexitย  – I was about to start doing it for European index funds in my iii ISA but that’s […]

[…] (I know you shouldn’t, but heck, it worked well for me in 2009 in my pension AVCs) I want to do this in the coming Eurozone […]

[…] I pinched the principles of this post on unitising a portfolio and applied it to my own, I’ve stayed reasonably well ahead of the FTAS which would probably have been my index fund of choice. The dividend yield is falling a little below 5% (it has until April to catch up, however) as I add EM allocations to it, because these are speculative and yields are poor in EM markets. My foray into Continental Europe on the other hand yields well, although there is the never-ending hazard/opportunity of Eurogeddon. […]

 

Leave a Reply to Lupulco Cancel reply

 
  • Recent Posts

  • Subscribe to Simple Living In Suffolk via Email

    Enter your email address to subscribe to this blog and receive notifications of new posts by email.