Tuesday, January 20, 2009

What now for investment?

Unfortunatley, many of us have now discovered the risks of investing in stocks, bonds, contracts for difference and all sorts of other financial products dreamed up by financiers and bankers.

Here in Ireland the banking horror stories seem to come one upon the other.

Anglo Irish Bank, the third largest in the state, has just been Nationalised, as it has been reported in the papers that its previously respected CEO and Chairman, Sean Fitzpatrick, had successfully hidden up to €130 million in personal loans from the banks auditors, the financial regulators and even some of his fellow board members by "bed and breakfasting" his loan with another financial institution whenever the inspectors came to have a look at the books!

Warren Buffett is quoted as saying "It's not until the tide goes out that you know who is swimming without trunks" and it is now apparent that many of the the banks and finace houses have been swimming nude!

Intrest rates have fallen to historical lows with the bank of England rate now at rates not seen since Winston Churchill was in power.

Those with money in the banks are receiving so little interest that they are actually losing money annually comapred to inflation and it seems impossible to make a good stock pick in the current climate.

Commodity prices have fallen in line with decreasing demand from the largest of the world's economies and now with decreasing demand from the emerging economies.

Land and house prices are falling.

But.....land is real, commodities are real, these are tangible assets. Although price and demand for commodities may fall in the short term, increasing world population and conicident increases in demand for commodities will make them a solid long term bet.

When it comes to land - guess what - they just ain't making any more of it....need I say more.


  1. What worries me most about the credit crunch, is that if one of my cheques is returned stamped ‘insufficient funds’. I won’t know whether that refers to mine or the bank’s

  2. Similar to the joke doing the rounds about 6 months ago. Q: What is the Capital of Iceland A: about €17.50