Things Can Only Get Better - Or Not!

As the world comes out of recession and we see recovery in financial markets, stocks and shares and property prices investors are looking to how best to take advantage. Optimistic commentators are taking the view that the worst is over and now is the right time to get back into to property, stock markets or other investments, pessimistic commentators predict that the world’s problems are far from over and we will see markets fall in the coming year. A problem for the professional investor a minefield for the rest of us.

Stocks and Shares

2009 has seen a significant recovery in share prices and some commentators suggest that this reflects the recovery in world economies and shares are a good investment, providing investors take a medium to long term view. Others point to the fact that recovery is driven by the extraordinary financial stimulus measures taken by governments and the recovery will be short lived. More

Government Bonds - Gilts

Traditionally gilts have been seen as a safe investment in times of financial uncertainty and investors may be tempted to purchase gilts now to avoid risking the stock market. However, prices are currently high and can be expected to fall once interest rates start to rise. More

Property

UK property prices have risen in recent months and some experts point to the underlying demand driving values upwards especially for anyone taking a medium to long term view. However, prices remain high in comparison to average incomes, measures to stimulate demand are coming to an end, notably the temporary increase in the threshold at which stamp duty is payable and employment continues to rise and many commentators are forecasting further price falls in 2010.
Buying a home
Investing in Property

Gold

Gold is conventionally seen as a safe haven in times of fincial uncertainty. However, gold prices are at an all time high and can go down as well as up. There can be no guarantee that the current price can be sustained in the short to medium term. More

Savings and Savings Bonds

So many of us may be tempted to hold our cash in savings accounts and bonds. However, although it is possible to get higher returns by shopping around and switching between banks and building societies, average rates are low reflecting the record low Bank of England rate. Although interest rates are bound to increase at some point few expect to see significant increases for a long time yet. The problem with that is that net proceeds may be lower than inflation and that means that, in real terms, the value of your savings is going down. More

So what can we do? It is essential to consider risks as well as expected returns on any investment, always do your own research but also seek independent advice.

Consider all options including alternatives to conventional investments. Above all avoid putting your eggs in one basket for example do not put more in savings with a single bank or building society than that guaranteed by the Financial Services Compensation Scheme.