Thanks for the replies. Sorry for the slow response - I've been away. What advantages/disadvantages would investing in a SIPP give me over say making investments through a regular broker? I mean if I make regular investments in shares in a SIPP, how would that differ to making regular investments in my Halifax Sharebuilder account?
Read my previous post about the tax advantage of using a SIPP.
Glenn I like the sound of long term position trading instead of buy and hold investments. What sort of system do you use for this (if you don't mind me asking?)? I know moving averages are pretty useless on the shorter timeframes but could then be used for long term investments? Do fundamentals have more of an impact on position trading?
Fundamentals do have an impact, but sentiment has a greater impact imo.
Examples from the last two big market tumbles:-
- Just prior to the Dot Com bubble bursting, even the people with little money were getting into tech shares. There's an old saying "When your taxi driver starts giving you share tips, you know it's time to get out".
- Just prior to the Credit Crunch crazy mortgages were being loaned to people with no money to pay them back; people were using credit cards like there was no tomorrow, and of course things like CDO's were being used by banks, although that was not so publically known.
Any talk of a "New Paradigm" or "It'll be different this time" are warning signs that things have got out of control.
Those are examples of what you might call contrarian thinking - when the herd is galloping towards the cliff edge it's time to step aside and look for opportunities to go in the opposite direction.
As for MA's, I don't know. I only use them to smooth other things. My view is that they are only looking backwards and tell you nothing about the future, except that the 200 day ma seems to be commonly used as a yardstick, and although it is meaningless (imo) in itself, if enough people use it, that will have an impact.
I use a technique which I can't disclose because it's under an non-disclosure agreement with a friend of mine. What I would say is that if you have a technique which performs well enough in lower timeframes, it will do the same in higher ones, but don't just rely on the technicals because markets are not technical all of the time.
Also, does anyone have any long term views on precious metals as bullion? I've bought a few blocks of Palladium and Silver and hoping to get some gold too. More of a collection/hobby than an attempt to make money although I do plan to hold long term and maybe one day sell for a profit. Thanks,
Prescious metals are no different to anything else, with one exception imo. Most (all?) currencies are based on the fiat system (look it up) and if there is likelihood of devaluation/inflation, or worse, then prescious metals are one of the few places to turn to. In a SIPP or trading account you can access Exchange Traded Funds which are backed by prescious metals.
Sam.
