{"id":50982,"date":"2022-11-25T10:44:45","date_gmt":"2022-11-25T10:44:45","guid":{"rendered":"https:\/\/adamfayed.com\/?p=50982"},"modified":"2024-02-23T05:28:26","modified_gmt":"2024-02-23T05:28:26","slug":"what-are-10-questions-to-ask-yourself-before-investing-a-penny","status":"publish","type":"post","link":"https:\/\/adamfayed.com\/it\/economics\/what-are-10-questions-to-ask-yourself-before-investing-a-penny\/","title":{"rendered":"What are 10 questions to ask yourself before investing a penny?"},"content":{"rendered":"<p>Scrivo spesso su Quora.com, dove sono lo scrittore pi\u00f9 visto in materia finanziaria, con oltre 267,5 milioni di visualizzazioni negli ultimi anni.<\/p>\n\n\n\n<p><strong>Nelle risposte che seguono mi sono concentrato sui seguenti argomenti e problemi<\/strong>:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>What are 10 questions to ask yourself before investing a penny?<\/li>\n\n\n\n<li>How does inheritance tax in the UK work?<\/li>\n\n\n\n<li>For non-US markets, how well does the Shiller&#8217;s CAPE ratio predict long-term stock market returns?<\/li>\n<\/ul>\n\n\n\n<p>Se volete che risponda a qualche domanda su Quora o YouTube, o se state cercando di investire, non esitate a<a href=\"https:\/\/adamfayed.com\/it\/#contact-me\">&nbsp;contattatemi<\/a>, e-mail (advice@adamfayed.com) o utilizzare la funzione WhatsApp qui sotto.<\/p>\n\n\n\n<p>Alcuni dei link e dei video a cui si fa riferimento potrebbero essere disponibili solo nelle risposte originali.&nbsp;<\/p>\n\n\n\n<p>Fonte di tutte le risposte: la pagina Quora di Adam Fayed.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.quora.com\/What-are-10-questions-to-ask-yourself-before-investing-a-penny\" target=\"_blank\" rel=\"noreferrer noopener\"><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What are 10 questions to ask yourself before investing a penny?<\/h2>\n\n\n\n<p>Keeping it to ten is difficult but I will make a stab at it.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Do I need an emergency surplus of cash in case I lose my job? If so, do I have 3-6 months of living expenses saved up?<\/li>\n\n\n\n<li>What do I need beyond pure investing advice? For example, if you are an expat you might need account portability as you are moving around. Or if you are high-net-worth you might require inheritance tax planning.<\/li>\n\n\n\n<li>Do I understand the investment, or have somebody (like a consultant or advisor) who does?<\/li>\n\n\n\n<li>Do I often get influenced by the views of the news media, friends and family? Will I therefore panic if markets go down?<\/li>\n\n\n\n<li>Following on from the last question, do I therefore need an investment advisor to control my emotions as much as for knowledge?<\/li>\n\n\n\n<li>Am I comfortable with volatility because risk and volatility aren\u2019t always the same thing.<\/li>\n\n\n\n<li>What am I investing for? A medium-term objective, or something like retirement? If it is short-term, it is best not to invest in most kinds of stock assets, as they are best left as long-term investments.<\/li>\n\n\n\n<li>How much risk do I want to take?<\/li>\n\n\n\n<li>How much risk am I taking now by leaving money in cash, due to the threat of inflation and currency falls?<\/li>\n\n\n\n<li>Is my attitude to any of the above sensible? For example, am I too risk-adverse or want to take too much risk?<\/li>\n<\/ol>\n\n\n\n<p>However, I would say one of the biggest mistakes people make is overthinking things in the first place, and asking too many questions.<\/p>\n\n\n\n<p>As per this quote, most of life is about showing up:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/qph.cf2.quoracdn.net\/main-qimg-453a8071d4f041b0aaf559e949ad3cf4-lq\" alt=\"\"><\/figure>\n\n\n\n<p>It is better to get started today with 80% certainty than wait for 99%, as that never happens.<\/p>\n\n\n\n<p>That is one reason people tend to \u201cthink about\u201d investing for months, years and even decades!<\/p>\n\n\n\n<p>Subsequently most regret not getting in sooner.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.quora.com\/How-does-inheritance-tax-in-the-UK-work\" target=\"_blank\" rel=\"noreferrer noopener\"><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How does inheritance tax in the UK work?<\/h2>\n\n\n\n<p>Some British expats <a class=\"wpil_keyword_link\" href=\"https:\/\/adamfayed.com\/it\/living-abroad\/\" title=\"vivere all&#039;estero\" data-wpil-keyword-link=\"linked\">vivere all'estero<\/a> will probably be amazed by my answer.<\/p>\n\n\n\n<p>This is a potential tax trap, which I will deal with later in the answer.<\/p>\n\n\n\n<p>Firstly, let\u2019s focus on people living in the UK.<\/p>\n\n\n\n<p>For people living in the UK it is quite simple. 40% on anything above \u00a3325,000. So, if your estate is worth \u00a31,325,000, you pay tax on a million and not the 325,000.<\/p>\n\n\n\n<p><strong>Of course, there are things people can do to minimize it such as:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Taking advantage of gifts and reliefs. For example, you can pay 3,000GBP per person, per year, tax-free.<\/li>\n\n\n\n<li>You can give gifts, tax-free, when somebody marries. It is currently \u00a35,000 to a child, \u00a32,500 to a grandchild or great-grandchild and \u00a31,000 to any other person. So, in a year where your child gets married, you can give 8k tax-free.<\/li>\n\n\n\n<li>There is no tax on certain kinds of gifts if they are given seven years before death.<\/li>\n\n\n\n<li>There is business relief for owners of companies<\/li>\n\n\n\n<li>You can set up trusts.<\/li>\n<\/ol>\n\n\n\n<p>The devil is in the detail, and those details always change, so needless to say this isn\u2019t formal tax-advice, and it does pay to get advice from a tax advisor and\/or do your own research.<\/p>\n\n\n\n<p>Yet the more striking aspect of inheritance tax is for those living overseas.<\/p>\n\n\n\n<p>Many British people mistakenly think that just because they have changed their residency, tax residency or even citizenship, that this means they don\u2019t need to pay the 40%.<\/p>\n\n\n\n<p>Just because somebody lives overseas and has no UK tax ties and therefore doesn\u2019t pay UK income taxes, doesn\u2019t mean that inheritance taxes works in the same way.<\/p>\n\n\n\n<p>Residency, tax residency and domicile work differently. Domicile is the hardest thing of all to change.<\/p>\n\n\n\n<p>So, you could have not spent a day in the UK for fifty years but still pay 40% on assets above 325k, no matter where the assets are located globally.<\/p>\n\n\n\n<p>No wonder UK inheritance tax receipts are hitting records. I doubt it is just because of higher levels of wealth:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/qph.cf2.quoracdn.net\/main-qimg-29883f6bdc6201d774839200c4e9cfeb\" alt=\"\"><\/figure>\n\n\n\n<p>In a post-Covid era, where governments need more tax money, the rules will probably get harsher.<\/p>\n\n\n\n<p>The good thing is people living overseas have access to offshore trusts and other legal structures, which makes effective inheritance tax planning possible.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.quora.com\/For-non-US-markets-how-well-does-the-Shillers-CAPE-ratio-predict-long-term-stock-market-returns\" target=\"_blank\" rel=\"noreferrer noopener\"><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">For non-US markets, how well does the Shiller&#8217;s CAPE ratio predict long-term stock market returns?<\/h2>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/qph.cf2.quoracdn.net\/main-qimg-b22e34b74771787f1e2b1d44b6ba3f91-lq\" alt=\"\"><\/figure>\n\n\n\n<p>If we look at the graph above, the current CAPE ratios show that the UK, Japanese, European and especially emerging markets look cheap.<\/p>\n\n\n\n<p>That has resulted in many people asking the same question that has been asked here.<\/p>\n\n\n\n<p>Ultimately, there is no perfect way to predict markets. If there were, everybody could market time. I have yet to meet a person who has kept money in cash, hoping for a fall, to beat the stock market consistently.<\/p>\n\n\n\n<p>Having said that, the CAPE ratio is as good a measure as any in terms of predicting the next decade or two for a given market.<\/p>\n\n\n\n<p><strong>It is certainly better than:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The rate of inflation.<\/li>\n\n\n\n<li>Which political party will win the next election.<\/li>\n\n\n\n<li>If a war will happen<\/li>\n\n\n\n<li>If the economy is super strong<\/li>\n\n\n\n<li>Geopolitical conflict<\/li>\n\n\n\n<li>Pandemics<\/li>\n\n\n\n<li>Almost every other single measure the media speaks about in a misleading way.<\/li>\n\n\n\n<li>It is even better than simple price:earnings ratios<\/li>\n<\/ul>\n\n\n\n<p>The markets have done well, and badly, under all of these conditions. They went up during the Cuban Missile Crisis, WW1 and the Spanish Flu pandemic and the recent Covid-19 episode.<\/p>\n\n\n\n<p>So, the CAPE ratio is a better valuation measurement than most.<\/p>\n\n\n\n<p>What is even better is this. Not comparing CAPE ratios by market, but comparing the CAPE ratio to its historical levels.<\/p>\n\n\n\n<p>For example, comparing the Hong Kong market\u2019s CAPE to its historical level, rather than to the S&amp;P500 or FTSE100.<\/p>\n\n\n\n<p>It is still an imperfect measurement. The Russian stock market looked cheap for a long time, but we now understand that buying it would have been a mistake.<\/p>\n\n\n\n<p>We also have to factor in risk. Emerging markets are riskier than US stock markets.<\/p>\n\n\n\n<p>Buying country-specific funds and ETFs is just a slightly easier way to beat the S&amp;P500, compared to stock picking.<\/p>\n\n\n\n<p>One reason is that few individuals or even institutions want to buy unfashionable investments which haven\u2019t performed well for a long time (those firms with low CAPE ratios).<\/p>\n\n\n\n<p>People prefer to buy emerging markets when everybody else is (the 2000s), and not when they have underperformed US markets for over a decade (now).<\/p>\n\n\n\n<p>Likewise, everybody loved technology in the late 90s, but not in 2002.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Siete afflitti dall'indecisione finanziaria? Volete investire con Adam?<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"604\" src=\"https:\/\/adamfayed.com\/wp-content\/uploads\/2022\/04\/smile-beige-jacket-4-1024x604-2.png\" alt=\"\" class=\"wp-image-41190\" srcset=\"https:\/\/adamfayed.com\/wp-content\/uploads\/2022\/04\/smile-beige-jacket-4-1024x604-2.png 1024w, https:\/\/adamfayed.com\/wp-content\/uploads\/2022\/04\/smile-beige-jacket-4-1024x604-2-300x177.png 300w, https:\/\/adamfayed.com\/wp-content\/uploads\/2022\/04\/smile-beige-jacket-4-1024x604-2-768x453.png 768w, https:\/\/adamfayed.com\/wp-content\/uploads\/2022\/04\/smile-beige-jacket-4-1024x604-2-81x48.png 81w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/adamfayed.com\/it\/become-adams-client\/\">Diventa mio cliente<\/a><\/div>\n\n\n\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/adamfayed.com\/it\/good-match-quiz\/\" target=\"_blank\" rel=\"noreferrer noopener\">Fare il quiz sull'idoneit\u00e0 del cliente<\/a><\/div>\n\n\n\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/adamfayed.com\/it\/contact\/\" target=\"_blank\" rel=\"noreferrer noopener\">Contatto<\/a><\/div>\n<\/div>\n\n\n\n<p><strong>Adam \u00e8 un autore riconosciuto a livello internazionale in materia finanziaria con oltre 830 milioni di visualizzazioni di risposte su Quora, un libro molto venduto su Amazon e un contributo su Forbes.<\/strong><\/p>","protected":false},"excerpt":{"rendered":"<p>What are 10 questions to ask yourself before investing a penny?<\/p>","protected":false},"author":1,"featured_media":64440,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_10166176115445471_100883565069113":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[31342],"tags":[],"class_list":["post-50982","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/posts\/50982","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/comments?post=50982"}],"version-history":[{"count":1,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/posts\/50982\/revisions"}],"predecessor-version":[{"id":80791,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/posts\/50982\/revisions\/80791"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/media\/64440"}],"wp:attachment":[{"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/media?parent=50982"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/categories?post=50982"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/adamfayed.com\/it\/wp-json\/wp\/v2\/tags?post=50982"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}