Famous Tinas
Tina Turner and er…..
Frankly I’m struggling and I may have to Google it. There just haven’t been that many famous Tina’s I recall. If you can think of one by all means tell me.
Investment Diversification
There are a couple of ways to reduce risk and volatility in our portfolios.
- Include more similar things. So if one fails we still have a few dozen others left intact. A little like 10 green bottles standing on a wall. When one accidentally falls, then it’s not the end of the world.
- Include different things. I explained this idea in one of my stranger blogs entitled The egg, the bread and the hotdog. A little like 10 red house bricks standing on a wall. When one accidentally falls, then you still have 10 red housebricks.
Asset types
In theory by holding shares, government gilts and commercial property, we should achieve smoother investment returns. That’s because they are supposed to either move in opposite directions or do their own thing. Well once again it’s official. This theory just doesn’t work. Throw it away.
As you can see in our portfolios now we currently have shares, shares and more shares, plus loads of cash. Cautious portfolios have the most cash for safety, Moderate portfolios have less cash and Aggressive portfolios have the least.
Commercial Property
Forget it. We just got out. £Billions is still locked in and will be for months to come. Meanwhile expect the value to fall and investors can’t do anything.
Government Gilts
It’s clear that the central banks of the world have manipulated interest rates to prop up their respective Governments exorbitant borrowing to bail out the banks. With the guarantee of no income and the strong possibility of physically losing money why would we bother.
Corporate Bonds
They are currently rising and falling in lockstep with shares but offering a lower return. There is no diversification benefit to be had.
Commodities
We have a glut of supply of oil and currently gas looks like over-production will do the same and force prices lower. Clean energy continues to get cheaper and therefore increases the likelihood that oil and gas prices will stay lower. Every industrial metal has had a growth spurt and looks set for a retreat. And as for gold I got out because I didn’t like the speculative nature which is subject to manipulation. Priced in dollars it’s now just too expensive to buy with our devalued Sterling.
Cash
Useless in the long term but very useful when we want our portfolios to catch their breath. We dip in, sit it out and then re-invest when it seems prudent.
Back to Famous Tina’s
There was the annoying Tina Charles with “I love to love” in 1976. Then there was the Aussie Tina Arena who was a one hit wonder with “Chains” in 1994. And a personal favourite of mine was the bass player in Talking Heads called Tina Weymouth. I used to fancy her when I was at school.
I’ve been told Tina Hobley is famous on the telly apparently.
The currently famous Tina I referred to in my title is in fact the 4 letter acronym for There Is No Alternative. It refers to the fact that due to all the above asset classes becoming no go zones for investors, shares are all that is left. Hence the recent upswing in global market valuations. I doubt it will last.
Shares
If you take a look at our current all time high portfolio valuations, you can understand that Tina was correct when she belted out
You are simply the best, better than all the rest.
I apologise for that cheesy quote now ?
Famous Shares
Sonny and Share……
Well done. Glad we’re in your capable hands. You are Simply the best.
What about cash? You’ve forgotten Johnny Cash, Pat Cash and my favourite nut, cashews.