Bonds vs Equity - Both are Expensive!

Рет қаралды 12,923

4 жыл бұрын

A question I'm being asked a lot at the moment is what to do when bonds are expensive and equities are expensive. So in this video we look at stock and bond valuations and whether it is true that they are both expensive and what that means for your investment approach.
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Пікірлер: 51

@Mouxbar 4 жыл бұрын

Having just read The Big Short and hearing "near zero percent risk on US Government bonds" I had a bit of a Steve Eisman moment. Love your videos, very informative.

@LondonReps 4 жыл бұрын

I like how your book is propped there in the background :)

@Pensioncraft 4 жыл бұрын

Well spotted LJSE! Thanks Ramin

@Olav3D 4 жыл бұрын

This is such a lame time to be an investor and a saver, everything is expensive and low yielding. Personally I`m 50/50 in bonds and equity as I`m quite young and need some of it for housing.

@vengefulavenger1510 4 жыл бұрын

The boomers printed money, inflated asset prices & thus stole our future growth & wealth.

@michaelcleary267 4 жыл бұрын

Vengeful Avenger well said.

@chrisspencer6502 4 жыл бұрын

Not if you treat the bonds like equity and don't hold it untill maturity

@leefig6089 4 жыл бұрын

Another great episode. Perfect

@Pensioncraft 4 жыл бұрын

Thank you Lee Fig i'm pleased you enjoyed it!

@rf9562 4 жыл бұрын

Great and quality video again :) Personally I have Vanguard LS80 which I plan to have it for the next 10 year and VEMT dividends covers all expenses, because it has a juicy dividends :) Thanks

@Pensioncraft 4 жыл бұрын

Thank you Róbert Fenyvesi i'm glad you enjoyed it!

@moderntechinvestor3247 4 жыл бұрын

I hadn't checked bond rates in awhile, was shocked to see how low they were. Especially versus the high interest savings accounts on offer. Another great video!

@Pensioncraft 4 жыл бұрын

Thank you Modern Tech Investor!

@mutton_man 4 жыл бұрын

Which high rate saving account? I don't see any.

@moderntechinvestor3247 4 жыл бұрын

@@mutton_man There are a selection of High Interest Savings accounts now available (at least in the US) with rates (as of Nov 2019) of 2.05% at Citibank, 1.7% at Goldman Sachs, 1.8% at Barclays, 1.8% at Capital One, and 1.7% at Ally Bank. To name a few of the options out there, which can be a better choice for parking your money versus say a checking account with negligible interest rates. Something to consider.

@mutton_man 4 жыл бұрын

@@moderntechinvestor3247 your rates are slightly better in the US. In the UK our best savings account is Goldman Sachs (marcus) at 1.45% only for first year then drops to 1.35%. majority around the 1.30% mark. Not great when UK inflation is 1.7%. it wasn't that long ago I had a saving account that gave me 2.5%

@moderntechinvestor3247 4 жыл бұрын

@@mutton_man I suspect a lot of younger investors would be incredibly surprised to see historic savings account interest rates vs today, I know it was a huge surprise to me. 2.5% seems so amazing to me now!

@tc9634 4 жыл бұрын

Hi Ramin, Do you have any thoughts on Peter Zeihan? He has linked valuations in capital markets to demographics, and suggested that the current savings glut will start to dry up when the 1960s baby boomers start moving into retirement and decumulating their capital into cash and consumption. The spike in births post WWII would also explain the dot-com bubble, though obviously there was a speculative mania feeding into that. There was then a much larger and sustained boom that peaked in 1964. They are turning 55 (minimum age to acess a SIPP) this year and will start taking their state pensions from around 2030 onwards. The boom bottomed out in 1976 so that suggests things will start turning around from those people's 57th birthdays onwards, 2033. Based on this, I'm expecting UK bond rates and equity valuations to crest over the 2020s, and bottom out in the early 2030s before returning to something more average. The overall population growth also seems relevant. Here in the UK, the population growth rate almost stopped in the 70s and 80s, it took from 1971 to 1989 to go from 56-57 million, where current projections are for a healthy growth rate that will slow to much longer term birth/death equalling out. (www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/articles/overviewoftheukpopulation/august2019)

@word42069 3 жыл бұрын

Curious, do these sentiments apply to only bonds themselves or managed bond funds as well?

@jbullionaire2749 4 жыл бұрын

I'm buying ishares global value ETF at the minute due to high valuations in general in the stock market. I believe value will have a resurgence over the next decade.

@chrisfahy8880 4 жыл бұрын

Great vid as usual! Could you please do a review of Trading212?

@taggthis 2 жыл бұрын

Thank you, I am just about to make my first index fund purchase via vanguard. I intend to invest long term and just leave the funds ‘locked away’ for at least 5 years forgetting about it. I am just getting slightly stuck on how I balance my percentage portfolio between equity vs bonds. Low risk is good for me. Any tips or related videos you can recommend?

@InvestingEducation 4 жыл бұрын

Dollar cost average into index funds if u find everything expensive at the moment

@InvestingEducation 4 жыл бұрын

@@profribasmat217 well that's what warren buffet suggested for his wife to do with her inheritance when he passes on

@chrisspencer6502 4 жыл бұрын

Did I miss something with the bond if it was sole in 2013-14 I would have made 25% plus the payments for that time

@mutton_man 4 жыл бұрын

I've invested in Russia, turkey & China index because of the lower Cape. Only time will tell if that was the correct decision or not. I've also invested in em bonds, I was surprised to see that the price of em bonds rose during the 08 recession.

@2711marcus 3 жыл бұрын

Hi Ramin 😊 If you buy bonds today and keep them until maturity are you almost certain to lose money? 🤔

@stlouisix3 4 жыл бұрын

What did you study at uni Ramin

@mnfchen 4 жыл бұрын

If u buy a bond with low yield, and then the yield spikes upward, as mentioned in the video, don't you lose out? You get the crappier coupon rate instead the newer and better one.

@Moskvich007 4 жыл бұрын

mnfchen that’s not true

@mnfchen 4 жыл бұрын

@@Moskvich007 why? Im trying to understand, that's why I asked

@Moskvich007 4 жыл бұрын

mnfchen u loose cos bond price go down , coupons usually are fixed in value .

@fredatlas4396 4 жыл бұрын

If I'd known what I know now, when I started to de-risk my portfolio in 2018 I'd have put 40% in bonds all in Vanguard uk government bond index fund. Instead I put 35% in Vanguard global bond index fund and 10% in legal & General short dated sterling corporate bond fund, not performed to badly. But it would have been better with everything in the UK government bond fund. Hindsight is a wonderful thing as they say.,but so called experts and even morningstar was saying uk government bond index was risky do to future rise in interest rates, imminent. But this turned out to b wrong, interest rates still haven't gone up despite warnings for some yrs now. I wish I'd stayed with traditional wisdom and used UK government bond index fund.

@simony2801 11 ай бұрын

What are they saying about interest rates

@jasimpeedikayil6028 4 жыл бұрын

First view

@Pensioncraft 4 жыл бұрын

Well done Jasim! Thanks, Ramin.

@stewiegriffin8384 4 жыл бұрын

I think if people just watch your video, there will be no poverty ever again

@Pensioncraft 4 жыл бұрын

Thank you Stewie Griffin! I wish I was the solution to world poverty.

@LondonReps 4 жыл бұрын

I feel I'm in a bit of a pickle though, I have a few thousand in cash to invest but it really doesn't seem like an amazing idea to invest right now, pensioncraft viewers what do you think I should do? Hold out a bit and wait for better options or invest now in expensive instruments?

@metinilke2930 4 жыл бұрын

LJSE dont time the market

@LondonReps 4 жыл бұрын

@@metinilke2930 of course, but I just have this feeling I should wait a year. Wait for prices to fall and invest then

@stevo728822 4 жыл бұрын

You first need to figure out how you're going to invest, rather than what you're going to invest in. i.e. which method are you going to use...ISA, private pension, company pension, mutual fnds, ETF's, investment trusts ?? And whether you invest a lump sum or trickle feed into it monthly. Most IFA's will provide a free consultation if you feel you need one.

@LondonReps 4 жыл бұрын

@@stevo728822 I only have about £4k so probably just an ISA through Vanguard

@mutton_man 4 жыл бұрын

Watch more pensioncraft and Ben Felix videos. Then create a portfolio allocation that suits your risk appetite.

@Vicky-qu4yw 4 жыл бұрын

Premium bonds until things get cheaper?

@tacocruiser4238 4 жыл бұрын

He forgot about the third asset class: real assets. If stocks and bonds are all over-valued, then look at things like gold, silver, platinum, oil, etc.