Index Trackers

tomstickland

Quick question, can someone point me to an explantion of the parameters on this table:
http://www.trustnet.com/ut/funds/perf.asp?sort=17&ss=1&txtS=&txtSS=&columns=&page=0&booIMA=0&reg=uk&sec=ind&ima=all&unit=all&type=all
In particular "yield".

kinster_2

After picking an Index Tracker, what do I need to do? Do I just leave it like a savings account?

carnet

tomstickland wrote:

Quick question, can someone point me to an explantion of the parameters on this table:
http://www.trustnet.com/ut/funds/perf.asp?sort=17&ss=1&txtS=&txtSS=&columns=&page=0&booIMA=0&reg=uk&sec=ind&ima=all&unit=all&type=all
In particular "yield".

Fund yields are normally based on the gross dividend predictions of the managers ie the income they expect to receive from the assets they currently hold in the fund.

I think all the other headings are fairly self explanatory.

carnet

kinster wrote:

After picking an Index Tracker, what do I need to do? Do I just leave it like a savings account?

Really depends on what you want the investment for and your time horizon.

Trackers are passive investments and I suppose most investors in them buy for the long term (there's really not much point in actively investing in trackers, except perhaps to switch to a cheaper one ).

It is NOT a savings account. It is a stockmarket based investment with all the inherent risks of any other equity investment.

You can lose your money in a tracker, as in any other equity based investment.

EdInvestor

Well all I can say OB is that I'm glad you're not advising me on my investments.:rolleyes:

dunstonh

After picking an Index Tracker, what do I need to do? Do I just leave it like a savings account?

This is basically my whole point when dealing with these discussions.

"after picking an index tracker...." - you dont just pick one. Thats putting all your money into one place. It doesnt matter if you are pro tracker or pro managed funds or dont care either way what you have. You shouldnt place all your funds into just one sector.

kinster_2

dunstonh wrote:

This is basically my whole point when dealing with these discussions.

"after picking an index tracker...." - you dont just pick one. Thats putting all your money into one place. It doesnt matter if you are pro tracker or pro managed funds or dont care either way what you have. You shouldnt place all your funds into just one sector.

I've got my money in other places, like businesses etc and am thinking of putting some of this in stocks. Someone here did mention that picking an index tracker is the best place to start for stocks?

If I just set one up? What do I do? Do I need to set up my own strategy of picking stocks or does someone do this for you?

Thanks

dunstonh

Someone here did mention that picking an index tracker is the best place to start for stocks?

Thats a matter of opinion and debate. However, even if you decide to go with index trackers, you still shouldnt pick one index.

If I just set one up? What do I do? Do I need to set up my own strategy of picking stocks or does someone do this for you?

You pick the funds and the rest is left with the fund manager. If its a tracker, then the fund will purchase shares based on the same weighting of the index it is tracking.

If it is a small amount involved, say £2000 or £50pm (if regular), then one fund is fine. Although it should be looked at in conjunction with other liquid assets.

kinster_2

dunstonh wrote:

Thats a matter of opinion and debate. However, even if you decide to go with index trackers, you still shouldnt pick one index.



You pick the funds and the rest is left with the fund manager. If its a tracker, then the fund will purchase shares based on the same weighting of the index it is tracking.

If it is a small amount involved, say £2000 or £50pm (if regular), then one fund is fine. Although it should be looked at in conjunction with other liquid assets.

What do you mean that I shouldn't just pick one index? Isn't that the best way to start off learning about stocks and then slowly increase? I'm not putting all my eggs in one basket as I've got businesses and am looking to reinvest some of my 'spare' money, and making my money work for me.

ps. this kinda sounds similar to personal pension funds.

Regards

dunstonh

What do you mean that I shouldn't just pick one index? Isn't that the best way to start off learning about stocks and then slowly increase?

It depends on the ratio of the amount you are investing. I would say the best way to learn is to get it right first time and not find out the hard way.

ps. this kinda sounds similar to personal pension funds.

No different at all. A pension is just a tax wrapper. Exactly the same funds are available for pensions as they are for ISAs. Which is why it's always daft when you hear people complaining about the performance of their pension.