When I think of investments, I’m reminded of the song by 1980s band The Smiths called “Heaven Knows I’m Miserable Now”.
First the song’s hero is miserable because he doesn’t have a job and then he’s miserable because he does.
Not having money is obviously very stressful and huge parts of the UK and USA are basically living from on a month to month basis with inadequate savings to meet unexpected large bills.
Having money is also very stressful because you don’t want to lose it. The financial services industry has been a disgrace as it has repeatedly ripped-off one group of customers after another.
Far too many people have become debt slaves as the housing market was artificially inflated and people took out huge mortgages. And then car loans and credit card debts added to the burden.
Since 2008, the government and central banks have got into the game with excessive government spending and “funny money”.
The Current Climate For Investments
The world is turned upside down by funny money. Shares are high, Bonds are high, Gold is high and yet, you can’t earn much on money in savings accounts.
Even they are not safe. The bank collapses of 2008 were bailed out by public money, now the rule is that shareholders, bondholders and even depositors will be the losers through the bail-in regulations.
In Greece and Cyprus, people were limited to how much they could take out of the bank. They couldn’t even get at their own money during the respective bank crises.
Things can’t continue and they are slowly changing.
– people can’t keep borrowing more and more.
– companies can’t keep borrowing more for share buybacks to prop up their share prices and allow executive share options to pay-off.
– governments can’t keep borrowing more and more with debt to GDP ratios increasing despite claims of “austerity”.
– Interest rates can’t stay artificially low for ever, rewarding the borrowings and incentivising more borrowing while penalising savers.
Indeed The Federal Reserve in the USA has been gradually increasing interest rates very slowly… testing the water to see what happens.
– Pension schemes can’t carry on with their unrealistic assumptions of future growth and claim to be solvent when logically many aren’t. Day by day, the pensions crisis edges closer.
What is Someone With Some Savings Supposed To Do?
The obvious answer is to talk to an independent financial advisor.
Even that can be a problem as I don’t think I’ve seen one say “sell and hold cash”.
Instead it’s “Sell this and buy that”, moving money from one area of risk to another.
The mainstream media can’t be trusted. They are invariably pro-investment , rationalising any dips as short term. To be fair, it’s hard for them to do otherwise since they could create a crash if they say “Get out of the markets now. It’s going to crash.”
Who can you trust?
Only someone who bears the losses and the gains. Not someone who sees a dip in income but a dip in capital too.
In other words, I think you can only trust yourself.
No one else suffers the pain of a bad investment like you do.
I don’t understand why so many people neglect this topic and think it is boring. You work hard to earn the money, You should do your best to keep it and help it to grow.
You And Your Savings
It’s your job to be as well informed as possible about the potential futures and the investment alternatives.
You have to live with the consequences of bad decisions.
Either you miss out when others get richer or you follow the herd, invest and suffer the next crash when it happens.
Yes there will be a next crash.
History shows that it happens regularly so logic says it will keep happening.
Especially when the side-effects of government and central bank interference may, in the long term, be worse than the problem the authorities are trying to solve.
You need to educate yourself.
Only two groups of people are safe from the next crash.
– the poor with next to no savings.
– the extremely rich – losing £500 million would hurt but if you’ve still got £500 million left, your lifestyle and future isn’t going to change much.
The rest of us are in trouble.
The Best Books About Investing In Shares, Bonds, Gold and Elsewhere
You will only see the books I’ve rated at Four Stars (meaning good and well worth reading) and Five Stars (excellent and very highly recommended). Reviews of lower rated books appear on Amazon.co.uk but I haven’t brought the reviews across to my own website.
If you read my reviews, you’ll see I try to explain why I like them but also to identify any weaknesses. My job as a reviewer is to help you to find the most appropriate books rather than to help sell more books.
On that note, if you do decide to buy, I’d appreciate it if you could click through to Amazon on my links as (hopefully) I’ll earn a small referral commission.
Some of these books can be very expensive so, if you’re happy with a hard back or paperback book, take a look at the second hand options on Amazon. Personally I only buy if the condition is described as “As New” or “Very Good” unless I’m really keen and forced to drop down to “Good”.
Five Star Books About Investing
The Art of Execution: How the world’s best investors get it wrong and still make millions in the markets by Lee Freeman-Shor
This book reveals that by nature, people do the wrong thing, they hold losing investments for too long and sell profitable investments too early. I admit, I’ve been guilty of both and understanding momentum investing and trend following can help.
The Permanent Portfolio: Harry Browne’s Long-Term Investment Strategy by Craig Rowland and JM Lawson
A fine explanation of how proper diversification against the main economic risks can lead to higher long term gains. This book totally changed the way I think about investments, even if I have concerns about how lessons from the past can apply in today’s artificially inflated markets.
Four Star Books About Investing
Cautionary tales for the modern investor by Aberdeen Asset Management
Moving Averages 101 by Steve and Holly Burns
How to Own the World by Andrew Craig
DIY Simple Investing by John Edwards
DIY Financial Advisor by Wesley R. Gray, Jack R. Vogel and David P. Foulke
Rich Dad Poor Dad by Robert Kiyosaki
The Star Principle by Richard Koch
Trend Following 101 by JB Marwood
Code Red by John Mauldin and Jonathan Tepper
Financial Bull Riding by Roger McKinney
Investing Through the Looking Glass by Tim Price
Yes, You Can Time the Market! by Ben Stein and Phil DeMuth
The Stock Market Bubble Bust Of 2015 And Beyond by Michael Swanson
Other Categories Of business & Finance Books
Business Books For Women – Business Novels – Business Planning – Business Start-Up – Economics – Energy & Environmental – Finance – Getting Unstuck – Inner Game – Marketing – Profit Improvement – Recession – Specific Niche Markets – Thinking –
Paul Simister is a business coach who helps business owners who are stuck, get unstuck. If your business is based in the UK, you can have a free Business SOS consultation with me to help you get unstuck.