I have been doing a lot of thinking about this since I spread bet for a living.
I have just been scanning charts and thought how overbought everything is looking and much of it is getting overpriced. Banks are trading on earnings multiples much higher than during the last bull market – not that I know anything much about banks.
More money has been pumped in recently by the Bank of England and the market was up for that period. I dunno. Let’s face it, the Bank of England hasn’t a clue where the money is, so we have no chance.
I somehow suspect that what’s happening in the market is not that the recession is over – because it isn’t. On other hand I think all the billions of extra money which Gordon Brown has printed is now washing its way into the stock market ..and therefore, stock prices are going up.
This is classic inflation, pure and simple: – too much money chasing too few goods. Except that right now it’s not goods which are being bought but shares. The £1 is being massively reduced in value whilst the real value of shares is staying broadly the same – but it gives the impression of an increase in share prices – but it’s only the monetary value.
I’m not very much convinced about investing in oil, silver or good as I think there is just too much speculative interest in all of them for my liking. But cash definitely won’t serve you well in a high-inflation scenario. Going short via spread betting on markets doesn’t seem to be wise since unless you perfectly time the next dive to perfection, you’re going to end up losing loads of money as the markets rally before the crash.
I think it’s time to ditch fixed interest investments, buy paintings, antiques, houses – yes, and shares which are fun! And probably (if I can convince Mrs Richardson) a new boat would be an excellent investment 
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