UK Bond Market Meltdown - Bank of England Intervenes
Вставка
- Опубліковано 7 лют 2025
- This live stream is in response to today's announcement by the Bank Of England (BoE). This is a critical announcement as it is an attempt to stop contagion triggered by the severe fall in UK government bonds. In this live stream, I will discuss the problems that we face, what the Bank is doing and why.
If you want to learn more about investing then why not become a pensioncraft.com member? To find what we offer and how you can join our friendly community click here www.pensioncra...
Ramin answers UA-cam supporters' questions as a priority both during his UA-cam live streams and in the comments of his videos. If you would like to support Ramin on UA-cam please subscribe here www.youtube.co...
This Is What Else PensionCraft Offers:
📰 Sign up to our free weekly market roundup to get news and views about what's going on in the stock market and wider economy pensioncraft.c...
💡 Book a Power Hour with Ramin so he can answer your questions in a one-to-one coaching session via a video call: pensioncraft.c...
📖 Understand investment in more depth with my online courses pensioncraft.c...
❓ Join our friendly community at pensioncraft.com and learn to be a better investor www.pensioncra...
Where Else You Can Find Me
🌐 Website - pensioncraft.com/
🎧You can check out my weekly podcast all about investing here many-happy-ret...
📱 Twitter - / pensioncraft
👨 Facebook - / pensioncraft
🔗 Linkedin - / pensioncraft
Tools I Use To Create My Videos
✔️ My primary data source is SharePad and an affiliate link for this is here sharescope.co.... (This link provides new users with a special offer and gives me a small commission)
The rest of the tools I use are free open source software:
✔️ ggplot2 package in R for my plots
✔️ RStudio to edit and run R code
✔️ OBS to record my videos and live streams
✔️ Kdenlive to edit my videos
Take A Look At Some Of My Other Videos & Playlists
📹 Investment Strategies playlist • Investment Strategies
📹 Economy & Investing playlist • Economy And Investing
📹 Behavioural Investing playlist • Behavioural Investment
📹 Investing Strategies From Beginners To Advanced video • Investing Strategies F...
DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.
Rishi Sunak is grabbing his popcorn right now
😂I can actually picture him sitting on the couch with a box of popcorn but can’t work out if he is happy or disgusted or relieved
Ugg slippers and dressing gown donned, curtains pulled and Bloomberg 24/7 on the 72".
The wife and kids won't hear a word out of him until the weekend.
Watching in glee of the damage he’s done…. His printing money and support for oppressing the population and economy in lock downs set this going
Tbh he did say not to do it it would cause a crisis, and his government vote against him… so this shows the government’s don’t have a clue
@@XORTION this shows its all part of the plan. we cant have a reset if the old debts are hanging around.
problem reaction solution comes to mind. CBDC and UBI are just around the corner
Ramin, the uk may be an economic mess, but at least the dire context has has allowed you to produce your best live stream yet. The plain speaking ... I like it!
100% agreed. Angry Ramin is better than the usual, on the fence, PC vanilla version!
At least something good''s come out out this complete s£!5show
Fully agree, well said!
this was a real pleasure to watch - thank you
Good of you to have addressed this. Few commentators on the UK that I follow have anything to say about it.
Can you recommend any more channels similar to this one please? ✌️
Ramin - I think your updates are amazing. I truly appreciate your explanations of what is happening. Thankyou for the work you put into this
Excellent explanation. Love this bit... if your pension goes bust , oh yes it will affect us all. And mortgage rates going up
You are going to lose either way. It's trading cost of living for pensions and bailing out the funds.
Impressive and incredibly well explained. Well done!
Thanks!
Welcome @BCT
So these pension funds are basically run like a leveraged investment. The market has turned against them far more than they expected and so they have to sell to meet the margin call.
Thanks
Welcome @Jonathan Harrison
I have a hard time faulting the current government for not following the standards set by previous governments which are vastly more important to the volatility that we just saw. Managing expectations and convincing everyone that budgets are responsible when they are not is not somehow more righteous, and the current issues with the UK, Japan, China, the EU and the US can be traced to decades of making irresponsible budgets sound responsible. This is not a crisis of a single bad budget but a crisis of the fact that things must now change and so some people are going to get hurt, and badly.
Time for your meds, Kwasi
BOE needs to raise the interest rates ASAP.
They need to raise rates, but they can't, so they don't.
@fjcruiserdxb There's liquidity, there will be a buyer for bonds -- if the price is low enough. That's not the problem.What is going on is at higher rates the pensions are insolvent. To have high rates, the UK has to either let the pensions fail, or bail them out, or not have high rates.
@fjcruiserdxb Oh, that's grim.
BoE probably need to raise 1.5%. Or at least they need to be raising at least 0.75% to match the Fed at 3.0% now and another 0.75% in November. But really they should be thinking about getting ahead of of the FED and just going for an immediate 2.0% rise, rather than playing catch up.
Inflation isn't an accident, it's intentional. Why would the government cut spending and pay down the debt when they can just inflated it away, and blame someone else for the inflation.
Thank God at 60 I sold all my bonds and equities three years ago. Put a my investments into gold and moved to Thailand. Last one out turn the lights of.
So, now the BoE are buying their own debt. Printing even more money to fuel even more inflation. The Government should be recalled to Parliament and explain how these Corporate and rich tax cuts are going to help the working poor and pensioners?
Oh, so you are among those who voted in successive governments who overspent and drove the nation into debt, then left?
What advice do you have for us younger investors?
@@tomstory8502 don't listen to him. I stopped reading when he went all in on gold. 😂
@@tomstory8502 Your young so, just cost average into good companies. But those that knock gold do not understand it's wealth. You need to do your own research. I put this question to the no sayers. Why do the central banks buy and hold gold.
So the pension funds have been playing with derivatives and margins, and now the central bank has to bail them out. It is 2008 all over again.
Yes in order to meet their pension obligations because there is a shortfall which is why the Bank of England is selling bonds because they are getting margin called as he stated
Very instructive but it still begs the questions 'who eventually pays for it' and 'what impact on inflation' given the increase in money supply. The answers are obvious!
Tax payers.
Master class!! I was curious about the mechanics of this process. Thank you very much!!
You are very welcome @Daniel Arges
I have a small company operating in the construction industry and I'm not exactly up to speed on the bond market. Thank you for explaining this complex topic so succinctly. 👍
Glad it was helpful! @Shed dweller
Honestly, the mini budget and the new PM are symptoms, not a cause of the current situation.
This was a LONG time coming, and as Mike Burry M.D said about the GFC that *everybody* shares a part of the blame.
People were far too eager and happy to have the cheap loans and mortgages, swanning around in cars and houses that they can't afford, while savers and pensioners suffered.
Too many civil servants and private workers were laughing while furloughed, drinking in their garden and getting loans to revamp perfectly good houses because they were such boring individuals that's all they could think to do with the furlough money
Well now its time to deal with the chickens as they come home to roost, and i'm actually quite enjoying watching everyone panic.
What else could you do with the furlough money? Go on holiday?
@@tastypymp1287 save it and thank your lucky stars I wasn't at Treasury because by god i'd be taxing back the furlough money directly from those who received it and not socialising the debt like Rishi and Bojo did.
@@GavinLawrence747 What would you do with your saving's now please? I'm new to this but have always been good with saving and careful with money.
What do you think will happen to all these people that spent and borrowed everything to keep up with the Jones and purchased lots of second homes in the country and by the coast? I live in Devon and there are so many new very rich people who have moved here since 2022.
I think the govermant has to reverse its budget plan, there is no good outcome if the BoE raises rates and stimulates the same time.
Surely economic growth is priority over controlling inflation though? Inflation we know is temporary because of Russia. But lack of productivity gains and national growth is a deeper, more chronic problem that requires policy focus
Fiscal policy does not equal monetary policy…converging objectives by the government and central banks
Perusing the FTSE all share list performance shows that most listed companies and trusts have had a poor 5 years and a shocking 12 months. All with a backdrop of low interest rates and massive continued QE. So imagine how bad it may be when BoE policy reverses, which it must - especially with massive supply side inflation.
Gilts were purchased between 2008-2022 way above par, when interest rates finally went up then bond values declined. It’s simple to work out. Fund managers purchased bonds as there was nothing to purchase that had any return.
Even though I'm sure you just explained this (and I may have listened), this sounds nearly risk free from a bank or investment banks perspective. If it goes smoothly it goes smoothly and they pay for pensions appropriately (making the fees on the way) but as soon as a problem arises you know you can just immediately sell it off, purchase shit elsewhere and the BoE will intervene on the UK's behalf. This increase in gilt spending by banks as a way of paying for pensions sounds a lot like another poor decision from both banks and the UK gov (who should know this could happen). The global markets currently have the UK by the balls and are hoping for our prolonged collapse into a second rate economy but then our government aren't exactly doing much to stop it.
Yep. If a central bank exists it should only be to maintain balances, they shouldn't even have some arbitrary inflation target. Allowing them to buy bonds etc. means there's a risk they are either compensating private sector gambling losses, or stealing off the taxpayer to pay for government credibility losses, or both.
If investors had sold off their holdings in UK gilts, gilt funds recently they would have lost a lot of money
Privatise the profits and socialise the losses. Socialism for the rich and capitalism for the middle classes and the poor, it’s how it’s always been.
@@I3urgess truth
Thank you for sharing your insights Ramin. Really well explained in an easy non-academic & understandable way. Wish ‘Truss & Co’ had appreciated this last week!
My pleasure @Mohammed Bhojani
Hi Ramin, great pod as always! Does the weakness of the pound explain the values of equity denominated in GBP? I've noticed the S&P500 has fallen c25% but VUSA and VHYL have only fallen by a fraction of that. Thanks
Thanks for the excellent explanation. It looks like due to the counterparty risk, the BoE intervention not only bailed out the pension companies, it also bailed out the investment banks. A further thought, would the investment banks package up the counterparty risk and sell that on as some kind of derivative, and who might have bought that?
And who was responsible for the movements prior to the crisis? Once again we know who the winners are.
Thanks for giving us clarity on the events of the last few days. Something MSM has failed to do as they are too focused on politics. Be interesting to know who has won on the other side’s of these trades and how much knowledge they had beforehand to be as so bold to short the pound and these bonds in a way never done before. Am I wrong in thinking a lot of liquidity has been taken from the market? But then put back on the table by BOE/UK plc?
Perhaps truss gave the wink and a nod to the boys. I thought it was illegal as its actually just like insider dealing isn't it
you made it crystal clear. The pension fund is about two time bigger than the bond market. 100m margin call for per 0.1p up in bond yields does not add up to me. the number should be at least times bigger. there was signs for high inflation at least two year ago, how thick are these fund managers who didn't do anything until they go burst. it is so unbelievable
Always the best analysis! Ramin continues to be beacon of calm in these turbulent economic time, despite his understated anger about the lack of foresight that led to this, from the usually unruffled Ramin.
Please explain how the liabilities of the defined benefit pension fall as the value of the assets fall.
This seems to contradict the very idea of a defined benefit in that the risk of shortfall is on the employer. The value of the bond portfolio decreases as yields rise but if the business has to pay a fixed annuity to the employee for so many years how is the risk of them paying out not affected?
Hi @FPP TAX when you work out the present value you discount future cash flows. The idea is that by matching the duration of your assets and liabilities when interest rates rise you discount the liabilities and the assets by the same amount. You can enter into an interest rate swap that ensures your asses an liability durations match _very_ closely. This duration matching in turn is imposed on pension funds via regulation so they have no choice but to do this. Thanks, Ramin.
Thank you so much. Hope you have a nice day.
Mona Dohie needs to refresh her math. If 0.1% rise is 1m in margin calls then 1% = 0.1%*10 equates to 10m in margin calls. Close enough i guess....
Anyway love your channel and your work and your thinking. Please continue to enlighten us. Thank you!
It’s ignorance of amateur new govt. I am a market practitioner and the amateur team so frustrate me. Even their fuel solution re fracking shows ignorance of financial markets.
Hey Ramin! Could you do another video on your current thoughts on UK housing market? And how to buy at a good value considering the uncertainty and over inflation of property prices since covid?
UK has entered into a long process of the financial crisis. UK treasury bonds yield downward process obviously would devalue its national currency, British Pound. It is a process of printing more money, that process would lead to increase inflaion.
Thankyou. That was an excellent presentation.
I realise the issue of buying US stocks using low-value pounds, but some of the US stocks I am buying are currently down 20-30% and pay good dividends, obviously paid in dollars. Should this equal things out? (Also, can we please stop thinking the current government is competent. Where would we be today if the BofE had not stepped in? The UK could have potentially CAUSED a financial crash on par with 2007-8 or worse.)
I do remember last October there were warnings from financial experts from a variety of institutions about accelerating inflation and that the BOE and the FED were starting to get behind the curve. Additionally the forward thinking was this inflation was serious and unlikely to be transitional.
If the right amount of interest rate hikes were not put in place then further down the road then emergency rate hikes would be the likely outcome. Then the BOE and FED will start to lose credibility.
Nicely done. Thank you 👍
Thanks for watching @AverageNiceGuy
Thanks so much for this information. Scary stuff.
Glad you enjoyed it @Mr C
@@Pensioncraft I listen to all your podcasts and watch your videos and it’s really appreciated the info you share.
I'm so glad I found this channel. ❤💛💚🤙
Welcome aboard @Vegan4life not just4fashion
wow, this education is amazing
Glad you enjoyed it @Callum Dempsey
Watching todays events and waiting to get home and watch your guide to understand it all …. In…a…bit…more….detail…! Excellent as always, thank you!
Glad it was helpful @Rod McClair-Burgess
I'm 58 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, we are finding it impossible to replace it. We can get by, but cant seem to get ahead. My condolences to anyone retiring in this crisis, 40years nonstop just for a crooked system to take all you worked for
Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Financial management is a crucial topic that most tend to shy away from, and ends up haunting them in the near future. Putting our time and effort in activities and investments that will yield a profitable return in the future is what we should be aiming for. Success depends on the actions or steps you take to achieve it. "You're not going to remember those expensive shoes you bought ten years ago, but you will remember every single morning when you look at your bank account that extra 0 in there. I promise, that's going to be way more fun to look at everyday", I pray that anyone who reads this will be successful in life
Best begin prepping as best you can. @ PENSIONER PREPPER
I am very sorry that you are experiencing this stress, best wishes.
The chaos in the bond market is a direct result of massive direct payments to individuals and businesses in 2020. That sowed the seeds of inflation, the chaos would have come regardless of the budget. Pension funds are loaded up on illiquid investments, entered into over recent years. The canary has sung, chickens coming home to roost for the pension funds and the BofE
So Central bank stepping in to bail out pension funds, who were using derivatives to take bigger risks on their members retirement savings in order to make bigger profits for themselves and now the scenario that has ‘never happened before’ is happening. History repeats.
very knowledgeable. Thank you
So nice of you @Tanvir Arafat
Excellent presentation! Anxiously awaiting my next pension statement...
I’m due my annual pension statement on my DB scheme and am 3 years away from it kicking in. My DC investments have both dropped about 3-4% in the last week or so. Hopefully they can recover over next3-4 years
Ramin tried hard to find a reason for this, but its probably CORRUPTION, hedge funds associated with Kwarteng, the Chancellor, were very likely shorting this stuff and made good money.
I follow the chanel relatively closely, and you have been very helpful in understanding markets. The priblem UK is in is created by UK, US and EU, and what we are seeing is the slow collapse, for now, of all Europe. The reasond for this collapse are: the rise in energy and food costs which impact on nearly everything else. We need to inform europe that to fix the root cause we have to stop the Ukr/Russia war and remove sanctions on the Russians. That is not inconsistent with the global disaster and democracy. The opposite ie what the US,UK and EU are doing against Russia is not destroying Russia its destroying the west. Tell them that so people can save themselves by removing all government that follow such lunacy.
Hahaha, they'll be eating dog sandwiches in Moscow this winter but yes Europe is collapsing 🙄
BoE intervention means they are purchasing back the damaged gilts or a significant portion of those available on the market?
Awesome video ! Thanks ! Very instructive!
Glad it was helpful @Slim
Hi Ramin, the bank of England says its going to stop emergency bond buying on Friday 14th Oct. How is this now going to effect pensions now?
Always excellent commentary - worked in the city during h financial crisis but this is 'unhinged'
Bank of England didn't help with a smaller than expected rate rise the day before the budget
Very interesting, thank you.
When your unelected 'independent' central bank is very clearly acting against the policies of your elected government then you know you've got one doozie of a problem brewing here.
Normally in any toss up between democracy and technocracy my money would be on the former for good or ill, but in this moment of extreme economic illiteracy from our government at the worst possible time I'm extremely reluctantly going to have to go with the technocrats.
Have a word with yourself!!!
That's exactly what they want you to feel....
I suggest you try to looking at Turkey and then reconsider your thoughts.
This is crazy. How can we have a lower base rate than the US. I am dumb but realise if a particular bank is offering a 2% interest rate and another bank is offering 4% (100% more interest) then I will put my money in the 4% bank. Oh look... That is the same difference as bonds in the UK and the USA. We will have no-one left wanting our bonds unless interest rates go up 2% today. We are screwed if it stays like this. SIMPLES,
Great answer on top ticking the housing market! and another great video 👍
Great commentary and well explained
Glad it helped @Paul H
Ramin, would the fall have happened if Bailey had put up The BoE interest rate by 0.75 or 1% instead of the 0.5% they did? Thanks so much for your explanations.
@22:36: who has more money ? Hedge or BOE ? What is the answer !
Love this dude. Such a well-crafted and well-delivered piece; his eloquent insights are truly gorgeous on top of serious knowledge of finance. However, sometimes I think he makes conclusions based on his own Pollyanna thinking. “The BoE is injecting $65 billion liquidity into a $3 trillion economy - 2% of GDP - that won’t contribute to inflation, because it’s targeted to a specific sector of the credit market? Sometimes this dude seems like he’s in denial. Awfully reminiscent of early 2008 when folks were saying subprime mortgages were a small sector of the credit market and the recession would be short and shallow. We’re heading into a global depression… better to accept it and be aware of it than to put makeup on it. That said, kudos to this dude for his incredible videos! He is a remarkable analyst
Dear Ramin, I am after some investment advice, should I contact you through this platform or directly via your website?
Hi @larry, if you could email us support@pensioncraft.com. Thank you
So basically the private sector - insurance/pensions companies - did not plan for such tail risks, and that once again we are bailing out a failed and failing profession class?! WE bailed out the banks. We bailed out energy suppliers. Now we bail pension fund and investment companies for their poverty of fiscal management?! Socialism for the rich yet again!
Thank you so much for this. Very informative.
When you show charts could you move your image so we can see all the graph?
@stopato Thanks for watching and sorry about my head being in the way. It was a mistake and I I didn't realise I'd done it until after the broadcast.
Index linked bonds dropped by 10% this morning and then were up 17% this afternoon, WTF they have become a crypto coin. Pension funds use these massively, especially leading up to retirement. There are a lot of funds that have lost over 40% nice if you are just retiring.
What are the tickers for index linked bonds please?
But this is basicly kicking the can down the road, right? This intervention is done with what resources? More debt? How is that additional debt gonna be handled in the future exactly?
So when markets price in the consequences of a unfinanced budget amidst a serious economic and geopolitical crisis, they're accused of malfunctioning ? And what about those pension funds that were pushed to take too much risk precisely because of low interest rates for so many years ? I feel like what's happening now would have happened sooner or later with out of control public spending and rampant inflation.
You could say that pension funds would be ill advised to go spread betting. But Mr Boring is beyond blame.
QE for gov bonds will not increase inflation? So what gov is going to do with the money look at it?
"Will this affect inflation? No it won't" - no evidence provided, just "trust me bro" - great content
The UK pension crisis is why I went all in silver and gold
I feel for you Brits, but I appreciate your putting the country on sale for us Americans! I’ve booked my flight and arrive on October 6. By then I expect USD GBP parity. Nothing like a 20% off sale!
What you interested in buying or investing in?
Don't gloat the US will follow just watch.
Will stocks drop more ?
Thank you for this! The part I don't understand is how the BoE intervention of buying UK gilts isn't inflationary? Where is this money coming from? Is it not printing money like with traditional quantitative easing?
Where is it going to is the question!
Yes vicious circle bubble will pop
The LDI you mentioned, was that only UK pension funds? Presumably US pension funds do something similar and if they had a yield shock the fallout would be pretty big for everyone?
Are there still large US pension funds? 30 years ago maybe, but I think they have been done away with almost completely now. We have to save for ourselves.
@@DanielFarrell Local, State and Federal employees still have pension funds. Most of these organizations would like to move away from a 'Pensionable' retirement to self-funded 401K type plans. My gut feeling is the US is probably playing these same games. All these 'alternate' investment strategies only work within defined boundaries that are known and understood at the beginning and get lost in time as the greed factor increases to the point of being reckless.
Most countries are betting against the pound, as the UK is over borrowing to buy back bonds which could save the old- fashioned pensions... Net instability due to high inflation and the inevitable rise in interest rates.
Gambling with the economy in tough times is very dangerous for the masses... Not for the rich!!
These measures may be temporary, but the damage may be permanent...if the goal of this 'gamble' was to entice foreign investment, well most other countries are not in a position to invest in li'l England
'Lil England' (world's 6th largest economy).
@@tastypymp1287 whatever ranking.... And falling fast!
@@gcdhvf4896 But it isn't.
excellent talk. A hug to all british friends. Don't Panic
Your website looks good.
Thanks
So - have U.K. pension funds been caught with their trousers down ? Did they binge on U.K. gilts and not diversify on other country treasuries ? Why were they so exposed ??
yield up price down, thanks professor
In 1976, the UK had to be bailed out by the IMF. Why didnt we do QE then and avoided the humiliation ?
You Voted it!
Why would the rise in 15 yr gilt yields cause mortgage rates to rise? You would need a change in base rate for this, no?
Great video Ramin! Thank you
Glad it was helpful! @Ryan
Let's throw more money into the economy while already at high inflation levels, what could go wrong?
El Salvador achieves 10.3% GDP growth for the last fiscal year and is on track to beat it this fiscal year. They also recently bought back sovereign debt with a maturity date out to 2025, not with printed money but actual cash reserves. All thanks to their adoption of a hard money Bitcoin standard.
Meanwhile the UK pivot is on with the restart of QE.
It won't be temporary and yes it will be inflationary. You can't taper a Ponzi, you can only kick the can down the road for so long, eventually the whole think collapses.
Could do with an update to this one !
If fund managers have put customer money in derivatives without client agreement they should go to prison. Preferably one where the governor lost his savings in the fund. An example needs to be set,not a public bailout.
How high could interest rates go?
Derivatives are stabilising until they aren't then they flip to the opposite.
i bought that fund this morning at the news its up nearly 20% today
What fund?
@@Bobsbud100 GLTL
Amazingly, fast insightfull quality content Ramin!
Very nice Video, I give thumbs up each time I hope you get many views!!!
Thank you very much @indie mery
I must confess I understood very little of this, but I do understand living beyond your means I was married a ling time ago bur my wife was borrowing and spending without telling me.
Of course no matter how much overtime I worked ends would just not meet! By the time I found out how much debt she had incurred there was no way I could work enough to pay it back! Net result was I lost everything, including my marriage and children!
Politicians always promise a " Bag of sweeties" to entice votes, and like silly children we always for for the trick!
No use having a General Election! Because the biggest bag of sweeties will always have the vote.
No candidate ever got elected by standing upon the truth,
Would you make a video on currency hedging S&P 500 investments, ideally with ETFs? Thank you
Should first time buyers wait or buy now before rates go up even higher?
Timing the market when buying a house never works. Buy a house when you can afford to do so.
I’m in the same boat, me and my gf are approaching 10% deposit but the prices are sky high and I imagine will drop in value but then interest repayment rates are going to be sky high. We can’t win, I’m going to ride out this initial financial situation and wait until next year, hopefully a lot of markets will stabilise but honestly I have no idea
@P J
I cannot save half a million before I retire ☹️
@P J go on... tell us the secret!
You should have rented! Rental yields in parts of London are below 3% Bargain.
can anyone recommend some basic info i can read please if I dont understand anything about whats going on. I only really realized the relevance of inflation this year for the first time, so am super ignorant. cheers all.
there is no such thing as an “unfunded tax cut”. the expression doesn’t even make sense. a tax cut reduces the governments income, it’s funding has been intentionally reduced. there is no funding a cut. what is needed is for governments to reduce their spending along with a tax cut so the cut is accounted for.
Unlucky with the bonds you bought 2 months ago, what should i buy?