Saturday, 13 February 2016

Investment Principles

1. Never borrow to invest.
2. Never invest when 50ema < 200ema
3. Set maximum investment to 100-age+ stock market YTD

At the moment, the World stock market of the 5 largest countries by GPD (USA, China, Japan, Germany and UK) is down 14%. So the investment allocation should be 33%.

The world stock markets have return on average 10.4% per year, so the allocations should be

AGE    ALLOCATION
30        80.4%
50        60.4%
70        40.4%

With property allocation at 46%,the amount assigned to Cash and Bonds should be 21%

2016 is looking like 2011 when Bonds were up 25%.

Based on YTD the 4 funds in focus for 2016 are

Blackrock Gold 692p
Vanguard Long Gilt 170p
City Financial Absolute Return 377p
Fundsmith 223p

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