Tuesday 6th June 2017 - Market Report

It's been really windy today, but not as windy as the markets. Ater an initial drop it recovered a bit and was virtually flat so the portfolio was only up by a few pounds to +£17.43

The FTSE's went like this:
and that illustrates why a balanced portfolio insulates you from a small drop in the equity indexes. Had you been just tracking the above two indexes you would have been down a little bit today.

And the Winners are
ETFS Physical Gold
PHGP:LSE:GBX

£15,164.63 +1.46% +5.92% +1.51%

+£218.23

Associated British Foods plc
ABF:LSE

£4,862.20 +1.07% +8.95% +8.13%

+£51.52

Followed by the Losers
Melrose Industries PLC
MRO:LSE

£7,111.42 -1.92% -0.51% +29.21%

-£139.44

Murray International Trust Plc
MYI:LSE

£6,684.19 -1.45% +0.16% +33.74%

-£98.14

And my little test portfolio on DEGIRO is losing all tghe way, down about £20 out of £1,000 - this is typical of  a new investment strategy, which is why people get frightened off of investing. As soon as you're down the normal eraction is to cut your losses and sell before it gets too bad.

This is totally wrong, you're just crystalising a loss, while you remain ivested any losses are purely on paper (as are any gains), its only when you sell do you take the profit or loss.

You have to keep your objectives in mind, are you in it to beable to make major purchase in the future, like a car or a house or even a round-the-world cruise. Then that's fine, or maybe like me you're building up a capital sum so that it can provide a sustainable income, I would be looking for about £1,000/month, obviously tax free, this equates to an income of about £1,500 for a person paying standard rate tax and NI, but not taking into account their tax free allowance. 

This would be the case for most pensioners as their occupational pension plus state pension would probably take up most of their tax allowance so any income from investments would be taxed.

In an ISA no tax is liable, and outside an ISA you can earn £2,000/yr in dividends tax free.

If it was in a SIPP then tax would be liable on any income, but don't forget when you put money into a SIPP it comes from untaxed income, so for every £100 in the government adds another £25 - or even more if your a higher rate taxpayer, in fact they would add £66 for every £100 you put in.

So it's your choice - pay tax on the money out (SIPP) or pay tax on the money going in (ISA). It's bit like paying betting tax - pay on the bet or on the winnings. Is that still true? Is there such a thing as betting tax anymore? I think it was 10% either way.

Have good one folks.