Archive | September, 2015

When To Invest…

28 Sep

Ferrari weekend at Beaulieu National Motor Museum with around 100 cars on display was an amazing sight. A sea of red interspersed with the odd colours of predominantly yellow and blue. There was an air of excitement as kids quietly asked if they could have a photo taken with the car. Stunned when you offered them a chance to sit in the car for the photo. For many it’s the first time they’ve been up close to one of their dream cars.

It was fascinating talking to the owners about their cars. Most own them for the pure joy others have bought them as an investment. The classic car market is enjoying a growth spurt. A Ferrari Mondial which only 4 years ago could be bought for £10,000 – £12,000 is today selling for £30,000. A Ferrari 360 F1 which during the great recession was down at £30,000 is today worth £60,000 and in some cases selling around the £70,000 mark. At recent auctions classic Ferrari’s sold in the millions. Ferrari is not the only marque to benefit from the upward trend in the classic car market.  Classic cars around the world are going up in value.

The share market has been in a downward trend over recent months. It has been long overdue. But how low will it last? In July 1984 the index low price was 978 it then started a steady climb until Dec 1999 when it closed at 6930. Despite the daily ups and downs during the period it was in a growth spell. By Jan 2003 the index had dropped to 3567 where it started another zigzag recovery until reaching it’s peak in April 2015 at 7122. As I write this article the market has today closed at 5958.

How low will this downward trend last? I don’t know. I wish I had a crystal ball that could see into the future. Instead I rely on data. Each day I check the closing prices in all the markets I follow. Each month I plot the information into a spreadsheet and watch the trend. A few minutes of research each day helps me to monitor and prepare for the next growth period.

Property has ups and downs just like any investment. Each month I check the sales information from Land Registry and record the information in a spreadsheet. I can then see the patterns for increases and decreases.

If you wait for information to appear in the newspapers you have missed the opportunities. Once a newspaper starts reporting regularly on the investment category you know the masses will soon start buying. This will force the price up quickly and there will be little profit to be made. Most investors use this period to sell, realise their profit and have money ready for the next up and coming investment cycle.

So what’s next? What currently seems to be out of favour? Start watching where the masses are selling. Keep your own records, plot the information in a spreadsheet. You will see trends starting to appear and before long you will see the start of a growth cycle. You are then ready to make the decision about when to invest in that market?

For more information about Karen and Investing visit www.karennewton.co.uk

Advertisements

All Change…

14 Sep

Bright new uniforms dwarf kids as they start back to school for the new learning year. Within months those same uniforms will be too tight or too short. Shiny shoes will be scuffed and torn or out grown within weeks. Our kids are continually growing but we hardly notice the subtle changes in front of us daily.

Investing is very much the same. If like me, you have your investments fairly automated, that is you are putting a set amount away each week or month, you often don’t see the subtle changes taking place. Are your investments performing to expectations? Is that particular investment outdated? What is the best use of your money right now? It’s too easy to become complacent about your investments.

Like many people I tend to set goals for the New Year, well, do you realise, 2016 is just 15 weeks away.

Over the coming months I will start reviewing the performance this year for each of my investments. What could I have done better? What did I do really well? What do I want to achieve next year. My plan will start to come together and by 1st January 2016 I will be ready with my new plan for the New Year. What about you?

Monitoring your investments and giving yourself feedback on how you did is like producing your own school report on your performance for the year. Did you do all that you could to get the best out of your investment. Don’t be afraid to be brutally honest with yourself. No one will see the report except you. No one will see the successes or failures except you.

In previous blogs we’ve discussed ‘cycles’. All investments have growth times and downward times. Some cycles last for years while others for months. To make money you need to keep an eye on where your investment is in the cycle and be taking advantage at the right time in the growth and downward parts of the cycle. Investment cycles are continually changing and we have to be able to change with them.

The world of investing is changing. As the government changes laws they impact on investment strategies. As world economies change it impacts on the performance of our investments. As we grow as investors it impacts on our ability to see more opportunities around us and take advantage of them.

Education and learning is as important today as it was when we first went to school. Only now, you are learning to provide for you, your family and all your futures. Do you have any plans to learn more about investing? Should mentoring form part of your investment strategy?

As the world continually changes around you are you and your investment strategies ready to change with it?

 

Karen Newton is an entrepreneur, investor, author and speaker. Karen teaches basic investment skills and strategies. For more information visit www.karennewton.co.uk