Dow Jones and FTSE Climb to New Highs

Or so goes the BBC headline today.

And so great eh, the world is saved?  Hmm I very much doubt that it is.  What has fundamentally changed?  Nothing, except the worldwide currency creation continues.  That more than anything else - oh and some money probably exiting the bond market early before it crashes too.

I'll be the first to admit that I actually took advantage of some favourable investment trust discounts during December, especially for my pension (for disclosure, some of those trusts and their prevailing discounts when bought : JP Morgan UK Smaller 25%, Japanese Smaller 18%, European Smaller 18%, Henderson Opportunities 25%).  So, yes, I am counting the paper gains too.  Nice.  Or it will be if I find the right time to exit.  I don't think it's quite yet, as the aforementioned trusts are all now on 15% discounts, so still feels to me like there is some gain up to May.

Sell in May and Go Away

If the stock market hasn't tanked by then and the trust discounts have narrowed to sub-10%, I will definitely cash out of a lot of these.  I really feel this rise is unexpected (to me, but there again I don't go to Davos or Devil's island).

What to Buy Instead?

Obviously, top up on your gold and silver holdings.  I will start buying gold again soon after a 3 year pause.  Especially to minimise my exposure to the British Pound.  I figure I can convert back later now and make a profit on that too.

Golden Prospect Investment Trust is my favourite.  This invests in gold and silver miners and has plummeted from a premium to a 14% discount in about 2-3 months.  What amazing value!

Fidelity Japanese Investment trust also sits on a 16% discount.  Yes, that's quite a way out there, but in a world of such financial uncertainty, it might make weird sense to have the most stock market exposure to the very market that has least participated in the rallies.  especially when the Yen is still, weirdly considered a sound currency.