A lot of shares seem cheap now as we appear to be coming out of a recession. Taylor Wimpey shares have been rising steadily since 2008, but are still a fraction of what they were in 2007. They could return to the highs of over £4.00 a share as the economy recovers. I think there is a housing shortage and they are in a good position to do the building, if the government gets it’s act together.
If you’re a regular reader then you know I opened an account with Zopa in 2011. It doesn’t make me a fortune, but the return has been more than from the banks. The current return for investing over 3 years is about 4.5% after fees. On the savings the average household in the UK has, that’s about £90 a year.
We hear a lot about so called ‘safe havens’ for investment funds. The United States was a ‘safe haven’ for many US investors and the UK has seemed a safe investment for many funds compared to Europe. It’s not just Government bonds that are seen as ‘safe havens’ by investment fund managers, but blue chip shares too.
Buying in a bear market
When there are more sellers than buyers in the market, traders call it a bear market and when the buyers outnumber the sellers, they call it a bull market. This appears to be a bear market; but the government is buying back it’s bonds by ‘printing’ money. What will the financial institutions do with the new money they get from selling bonds? I think they are buying shares in the markets again but being very selective. I have bought shares in another company that is making a loss; the Royal Bank of Scotland Group. (more…)