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Innappropriate Investments
Comments
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I've read them. The Investors Chronicle one is using figures from Frontier Investment Management, an advocate of index trackers and hardly an unbiased source. FIM is campaigning on the basis of costs to try to improve it's own position - as the page notes, it's that campaign that caused it to be published. It's basically repeating PR from a passive management company.i'll agree it is quite an old document, but it does seem to have the same figures that are in the month old articles in the Investors Chronicle and Guardian. Have you managed to have a look at them?
The Guardian one gives some costs but without original source. It's not a concern for me that a fund manager may incur 1.4% in trading costs.
Both seem to grossly misrepresent the true position. The trades are being done for a reason: to make or avoid losing money, or because investors are buying or selling the fund and forcing the manager to buy or sell. There's inevitably a cost of trading but that's only half of the point, the other half is how much money was made or lost by the trades.
It's the old passive vs active argument where passive managers look at the costs and pretend that active funds work like passive funds and that trading is just a cost, not a way of making money. If you're a passive manager trading is just a cost, so it's no surprise that passive fans would want to treat it as only cost, not profit source.
That's OK. A widely cited source for spread data seems to be Angel, J., 1997, Tick size, share prices, and stock splits, Journal of Finance 52, which unfortunately isn't available to me because I'm not a subscriber.i'm not sure I agree with your method of working out the bid/ offer spread.
But part of its result is summarised in "Overall, the mean and median of relative spread is 0.255% and 0.237%, respectively, which are smaller than spreads on other markets. Angel (1997) finds that the median relative spread equals 0.65% on 15 major markets. Al-Suhaibani and Kryzanowski (2000) report that the mean and median relative spreads on the Saudi Stock Market, another emerging market, are 1.79% and 1.60%, respectively."
I've got to go now so I'll comment on the rest later, if I do.0 -
I've read them. The Investors Chronicle one is using figures from Frontier Investment Management, an advocate of index trackers and hardly an unbiased source. FIM is campaigning on the basis of costs to try to improve it's own position - as the page notes, it's that campaign that caused it to be published. It's basically repeating PR from a passive management company.
The Guardian one gives some costs but without original source. It's not a concern for me that a fund manager may incur 1.4% in trading costs.
That's OK. A widely cited source for spread data seems to be Angel, J., 1997, Tick size, share prices, and stock splits, Journal of Finance 52, which unfortunately isn't available to me because I'm not a subscriber.
But part of its result is summarised in "Overall, the mean and median of relative spread is 0.255% and 0.237%, respectively, which are smaller than spreads on other markets. Angel (1997) finds that the median relative spread equals 0.65% on 15 major markets. Al-Suhaibani and Kryzanowski (2000) report that the mean and median relative spreads on the Saudi Stock Market, another emerging market, are 1.79% and 1.60%, respectively."
I've got to go now so I'll comment on the rest later, if I do.
I would say that the Investors Chronicle is a fairly good source of information though, i'd imagine they must have a fair amount of faith in what they publish. The information in the Guardian was from a firm of consultants to the Treasury. You think the Treasury commissioned a bunch of cowboys to write the report?
It looks like the information you have provided largely reinforces the FSA's claim of a 1.8% "round trip". It might be a little less in a market in the US with high turnover and no stamp duty, however it's likely to be a lot more in an emerging market.0 -
This year, I got a paper hat. It was exciting.LOL, tell us what you get in your christmas cracker this year, last year you got an IFA qualification. might be something better this year.
The joke read "What is the difference between a unit trust and a tracker", and the answer was "Ask darkpool for the punchline".I am an Independent Financial AdviserYou should note that this site doesn't check my status as an Independent Financial Adviser, so you need to take my word for it. This signature is here as I follow MSE's Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
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I enjoy most of your posts but you dissapoint me with comments like that.you stay with your mum?
.
(Of all the worst people I can think of, none of them live with their mum.)“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Glen_Clark wrote: »I enjoy most of your posts but you dissapoint me with comments like that.
(Of all the worst people I can think of, none of them live with their mum.)
fair one, but he does my nut in with his posts that assume people can telepathically guess what point he is making. if he disagrees with me fair enough - but the least he can do is make a clear point explaining why he disagrees.
I can only assume he is a wanna be IFA - i just hope he managed to get lucky with a christmas cracker and got the qualification.0 -
fair one, but he does my nut in with his posts that assume people can telepathically guess what point he is making. if he disagrees with me fair enough - but the least he can do is make a clear point explaining why he disagrees.
You are using out-of-date documents as the basis for your information: the FSA document from which the figures are quoted is from 2000, and is stated at the bottom of this last article that you used, and is also on the cover of the very same FSA document that you referenced back here. 12 years old, and its estimations are superceeded by modern reporting practices. Not much point in saying that anyone else's posts aren't clear when it is quite clear that you don't even read your own 'evidence' before posting it.
That FSA document is estimating trading costs using data between 1987 and 1998. Reporting trading costs in annual reports was not a requirement back then, but it is now. Why guess at something when the facts are now there? It's a bit like estimating the width of a river in order to build a bridge - no doubt, the sort of practice that would lead to time and cost over-runs...
Individual investors are also subject to these very same trading costs, e.g. bid/offer spread, stamp duty, market-maker commissions etc. No different to the ones to which fund managers have to pay, except that FMs are more likely to be able to bring down some of those costs compared to individual investors, due to the sizes of their transactions.
Of course, if you do have evidence that the trading costs being falsely reported in the financial statements of annual reports then please do provide the proof to the FSA (or The Queen, or The Who, etc - you have the email addresses already, I believe). Just think of the name that you could make for yourself...
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I tend to treat others according to how they choose to conduct themselves. So given the manner with which you frequently choose to post on here, don't expect any sorrow from this quarter (or several others) if your head is being done in. If you want something better, then show something better. If you don't want to show something better, then don't bleat.I can only assume he is a wanna be IFA - i just hope he managed to get lucky with a christmas cracker and got the qualification.
I will merely respond with 'colon-rofl', and that 'crackers' and your 'nut' have so many different connotations... (and I am quite happy for other posters to clarify their them for you
) Living for tomorrow might mean that you survive the day after.
It is always different this time. The only thing that is the same is the outcome.
Portfolios are like personalities - one that is balanced is usually preferable.
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Ark_Welder wrote: »You are using out-of-date documents as the basis for your information: the FSA document from which the figures are quoted is from 2000, and is stated at the bottom of this last article that you used, and is also on the cover of the very same FSA document that you referenced back here. 12 years old, and its estimations are superceeded by modern reporting practices. Not much point in saying that anyone else's posts aren't clear when it is quite clear that you don't even read your own 'evidence' before posting it.
That FSA document is estimating trading costs using data between 1987 and 1998. Reporting trading costs in annual reports was not a requirement back then, but it is now. Why guess at something when the facts are now there? It's a bit like estimating the width of a river in order to build a bridge - no doubt, the sort of practice that would lead to time and cost over-runs...
Individual investors are also subject to these very same trading costs, e.g. bid/offer spread, stamp duty, market-maker commissions etc. No different to the ones to which fund managers have to pay, except that FMs are more likely to be able to bring down some of those costs compared to individual investors, due to the sizes of their transactions.
Of course, if you do have evidence that the trading costs being falsely reported in the financial statements of annual reports then please do provide the proof to the FSA (or The Queen, or The Who, etc - you have the email addresses already, I believe). Just think of the name that you could make for yourself...
I tend to treat others according to how they choose to conduct themselves. So given the manner with which you frequently choose to post on here, don't expect any sorrow from this quarter (or several others) if your head is being done in. If you want something better, then show something better. If you don't want to show something better, then don't bleat.
I will merely respond with 'colon-rofl', and that 'crackers' and your 'nut' have so many different connotations... (and I am quite happy for other posters to clarify their them for you)
well done, i read your post and i believe i get what point you are making. it must feel good not needing someone to translate your posts?
so you think all 12 year old documents are obsolete? or just this one?
so what do you think the cost of a "round trip" is? why don't you show some calcs to back your figure up as well. perhaps do it for a developed market and an emerging market.
why are you ignoring the evidence from the guardian and investors' chronicle? is it because they are only a month old? or is it because they contradict what you have been saying?
i hope you manage to respond to this post in plain simple language, and i don't mean you refering to a document and expecting people to guess what you mean.0 -
I have been hooked 3 times by different flavours of guaranteed equity bonds - every time there has been a market dip during the 5 year term resulting in capital repayment only. The fixed exit date is the real weakness.
However, I am now tempted to have a small punt on this structured beast -
<link blocked by site. Product is Morgan Stanley FTSE Kick Out Growth Plan 15, with 2.5% Moneyworld commission rebate>
which will pay out 60% after 3 years IF Morgan Stanley with it's A- rating doesn't default AND IF the FTSE has increased 10%. Any opinions please?Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam0 -
The fixed exit date is the real weakness.
Or it's strength if you get the right one.Product is Morgan Stanley FTSE Kick Out Growth Plan 15, with 2.5% Moneyworld commission rebate>
which will pay out 60% after 3 years IF Morgan Stanley with it's A- rating doesn't default AND IF the FTSE has increased 10%. Any opinions please?
I believe that one failed our due diligence checks. You have to decide if it passes yours or not. That is what comes with DIY.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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