Wow. It’s been an incredible few weeks in the stock market. The FTSE 100 has rallied strongly since the US election at the beginning of the month. As I write, it is taking a well-deserved breather but is still up an amazing 14% since the start of November. That’s great news for the many beleaguered investors amongst us. And the basis for starting a great SIPP investment.
When it became clear that the Donald had been fired, the world breathed a sigh of relief and the market began to rise rapidly. Then a few days later when Pfizer made the vaccine announcement we’d all been waiting for, it really took off.
However, if you think you have missed the boat, you haven’t. The market is still down from its pre-pandemic peak and is still very cheap compared to other international markets.
With the US election out of the way, light at the end of the Covid-19 tunnel, and hopefully the end of the Brexit uncertainty in sight, there seems very little to hold the UK market back.
A bumper year
Indeed 2021, could well turn out to be a bumper year for UK stock investors.
So, what should you do about it?
Well, you’ll be unsurprised to hear that I’d humbly suggest educating yourself in the use of cash-secured puts and covered calls on FTSE 100 stocks would be a great idea. It is a fantastic way to get exposure to the market whilst controlling your downside risk if things don’t work out quite as smoothly as I anticipate.
As any of my students will tell you, once you start investing this way, you’ll never go back to simply buying stocks and hanging on for dear life.
You can find full details of the strategy here.
Capital Gains Tax
But as well as all the good news, we all know that this pandemic has been horrendously expensive for the country. And that debt is going to need paying back over the next few years.
An obvious — and already trailed — target is Capital Gains Tax (CGT). Mr Sunak could well be looking at ramping up the tax he charges on the gains you can make from any of your investments — including FIRE Revolution. That’s not so good.
But, I have a solution.
You see, unlike many investment strategies, it is perfectly possible — indeed desirable — to run the FIRE Revolution income strategy within a Self-Invested Personal Pension (SIPP).
That way, you get to invest in one of the most promising stock markets in the world, using a low-risk investment strategy from within the ultimate tax-free wrapper. If you are looking for a great way to invest your hard-earned money, what’s not to like about that?
In order to take advantage of this unique set-up you will need to use a specific broker and pension administrator. As always, I cannot give any recommendations but I have put together a FREE white paper explaining the exact steps that I, and many of my clients, have gone through to open up a SIPP that will allow you to run the FIRE Revolution strategy completely tax-free.
Interested? Please drop me an email.
Third Friday Ltd are not regulated by the Financial Conduct Authority and the FIRE Revolution training programme is purely educational in nature. Under no circumstances do we provide any financial trading or investment advice. Any examples used are for educational purposes only and should never be construed as advice. We accept no responsibility for any investment losses you may incur. Please consult a financial advisor or other qualified professional if you are in any doubt as to the suitability of the strategies we teach.