Exchange the rollercoaster stockmarket ride for a fixed return of up to 15% from a loan secured on property, as you can see in the blue box below
The stockmarket adage 'Sell In May And Go Away' goes back to the 17th century. So with the stockmarket at near record levels, there’s undoubtedly never been a better ‘May’ in history to consolidate your gains.
If you've had any money in the stockmarket in 2013, you've enjoyed a pretty nice ride. So far, the FTSE 100 up 15.36% in less than 5 months. You’d be forgiven for thinking that we’re out of the woods, and it’s all plain sailing from now on.
The last 25 years shows how complacency can cost money
Lots of money. The two big crashes, shown below on the graph of the FTSE 100 since 1987, each wiped out 30% of investors money in no time at all.
Clearly stockmarkets rise. They fall too. And sometimes they crash.
If the UK and worldwide economies are barely limping along, tip-toeing on the edge of recession, why is the stockmarket at a near record high?
The answer is ‘quantitative easing’.
Around the world, money has literally been conjured up from thin air as trillions have been pumped into economies to kick-start them. And if the stockmarket is any sort of indicator, it’s working.
But what’s going to happen when the national and central banks want their money back? Which they will! Unless there are very firm foundations to the recovery, it’s pretty certain we’re in for another dip. And it could be a crash!
The warning signs are already there.
Speculation is rife of an impending Government sell-off of Royal Bank of Scotland and Lloyds Banking Group. But many commentators believe it’s far too early to be talking about repaying UK taxpayers. For if it happens too early, it’ll be like ripping out the foundations of an unfinished building. And the result could be catastrophic.
Investing in the stockmarket has always been a gamble
And it always will be!
What’s worse is that in today’s world of global trading, it’s much harder to really work out what’s going on. Before the ‘DotCom Boom’, many of the FTSE 100 companies were UK trading operations. But things change, and many of them today are owned by foreign concerns, with income being earned from all corners of the globe.
It makes it very difficult, if not impossible for investors to decide when to stay, and when to go away.
It begs the question… if you go away, where do you go?
With interest rates at record lows, deposit based investments are a non-starter. They’re generally earning less than inflation. It means your money goes backwards as time passes.
If you’re holding a lot of cash in your SIPP, you’re making a big mistake. When you take into account financial adviser fees and SIPP operator charges, you might as well flush your cash down the drain.
Property is an obvious choice
One of the most successful investments in recent times has been one that renovates listed buildings. Millions have been invested. You receive a fixed interest rate of 12%, backed by the security of a first charge on the property.
Many people have chosen the one year investment option as an alternative to deposits. And both cash and SIPP money is pouring into the three and five year options. For when the money is left to accumulate, it delivers a return of up to 15%.
It’s a limited opportunity
While there are still many listed buildings to renovate, this opportunity won’t last forever. To avoid missing out, this is what you could do.If you’re sitting on stockmarket gains, consider banking them and transferring them into this fixed interest investment. If you’ve got more than you need on deposit, either inside or outside of a SIPP, turn your ‘real’ income from a negative into a big positive by switching your money into this fixed interest investment.
This offer is restricted to SIPPclub members only
All the due diligence you need to appraise this opportunity is available in the Members Area.
If you're a SIPPclub member, login here, then click the blue ‘Invest’ button at the top of the page. It’s the first investment listed.
If you’re not a member of SIPPclub, join SIPPclub here.
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AJ Bell Is Often The Best Value SIPP For Stockmarket Assets
Over time, charges can wipe out a huge part of your fund. We like AJ Bell because there are no set-up costs. If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund. And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment). However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.
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As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk. Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.
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