The four best investment trusts to buy now
Where the best value is in investment trusts - and what I am buying now
Good morning all,
It’s Dr John today with what he thinks are the four best investment trusts to buy now.
Over to you, Dr John.
If you are looking to buy gold in these uncertain times, let me recommend the Pure Gold Company.
This year has seen the usual exaggerated responses to macroeconomic news. People become obsessed with, and then forget: hard or soft landings, treasury yields, bank runs and real-estate crashes, in commercial property in the USA and perhaps everywhere in China, the US fiscal deficit, demographic problems (too many young people here, too many old people there, not enough people somewhere else). The list goes on.
The remarkable thing about capitalism and the economy is that despite all this, and seemingly endless government incompetence, the economy does indeed move on. Things are invented, improved. Cures are found for disease, and books and songs are written. And profits are made and royalties received.
And, importantly, not just in the Magnificent Seven in the States, but the world over.
I visited South Africa in the early autumn and what is remarkable about it is that, although corruption, crime and incompetence are rampant and orders of magnitude greater than in the West, life carries on, and very successfully. We had the most amazing meal at Cavallis winery, drank fine coffee in the cafes of Stellenbosch, walked in the Jonkershoek National Park and relaxed on the savannah in Madikwe. Nearly all South Africans are utterly lovely, hard-working, kind, polite people terribly let down by a core of government tribalism, incompetence and corruption.
We are lucky we can share in hard working people’s successes by investing in, or lending to, their businesses.
So, notwithstanding all the world’s issues, where do I think there is value right now?
First of all, we do have to accept that the future is uncertain. What we have learned in the last year is that US government treasury yields to some degree set the price for everything else. If you can get 5% from the government then a 7% return from either property or a solar farm isn’t good enough. For that 7% yield to become attractive relative to the treasury yield of 5%, it has to rise to perhaps 10%. For that to happen, the share price has to fall by a massive 30%. We have seen that in property and infrastructure.
Although interest rates seem to have peaked, nothing is certain. With that in mind, here is my first port of call.
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