LM portfolio as at 27/05/2022:
| Code | Sector | Date Bought | Cost | Value | Gain/Loss |
|---|---|---|---|---|---|
| LM045 | Gas, Water & Multiutilities | 06/12/2021 | £1280 | £1210 | (5.42%) |
| LM047 LM047-2 |
ETC | 17/01/2022 03/03/2022 |
£2530 | £3080 | 21.41% |
| LM050 LM050-2 |
ETC | 29/03/2022 12/04/2022 |
£2530 | £3640 | 43.66% |
The long-term plan was to stay in our current house for a couple of years and then trade up for a bigger home. However, from what I have been reading online, this is a foolish pipedream and we're all doomed to stay in the houses we already own due to the unprecedented rise in house prices.
And if you haven't yet bought a house, bad news I'm afraid. You'll be renting FOREVER because house prices are flying up and out of reach for the average first time buyer.
Apparently the new norm is that houses sell for 5%-15% ABOVE the asking price. Gone are the days when you could look at a house, like it and then proceed to offer a price under the listed price with any hope of buying it.
No, nowadays you need to figure out your budget and then set the filters on Rightmove to a good 10% to 15% BELOW that price to factor in the extra you will have to offer to secure the house.
Of course, this pessimism isn't new. Last time the housing market became overblown in around 2007 everyone was saying similar things. Then there was the "credit crunch" and the market cooled again.
No matter how bad it seems, how "hopeless" it all is, things will eventually calm down.
All these threads and posts about how terrible the housing market is are probably a good indication that we are near a housing market high and something will come along soon to derail it.
It'll likely be painful but in the years to come we'll realise it was necessary.
If moving wasn't an option, the other plan we had was to extend the house we are currently in.
Well, how silly it was to think that we could do this!
Home improvements are also now completely out of the question according to popular opinion on the world wide web.
Materials costs are through the roof and when you factor in the labour it will probably be cheaper to move... except you can't move because a bigger house is too expensive!
Remind me to come back to this point in May 2024 and we'll see where we are then i.e. how unobtainable houses are and how ridiculously expensive building materials have become.
As bad as it all seems at the time, the laws of economics mean that something has to give. And while they might be making a lot of money at the moment, I remember a lot of skilled builders struggling to find work in 2009.
You really can't blame them for making as much as they can while they can when the demand allows them to charge top dollar. It won't last forever.
As for the stockmarket, it's all a bit boring. The FTSE 100 and FTSE 250 have been going sideways for a while.
If the market does come right down then it will probably be a gradual descent, similar to those we have seen in the past, rather than a huge, rapid drop. The only problem is you only know it's a gradual descent after it has happened.
There's nothing much we can do as investors except protect our bank and be patient.
I like listening to one particular podcast where the two investors talk about their various investments and how the market is doing. One thing I can never understand though is that they speak about shares they bought which are "down 50%".
For me, it would be depressing to log into my brokerage account only to be confronted with such large losses. I would simply HAVE to sell long before it got to 50% down.
But they hold on.
Any share getting to a 20% loss is painful enough that I have to sell it straight away. Holding something for years in the hope it will come back doesn't sound like investing to me - more like hopeless gambling.
Luckily the three positions I have open aren't anywhere near that kind of loss level. As you can see, LM045 has slipped into losing territory but it's a long way from panic stations.