Advice and ideas on stock market, tracker funds, etc please.

cheerfulcat

Mamzie wrote: »

But I would be willing to put in the time myself, and try and gain a little. Think I would be kicking myself in 5 years time if the market had recovered and I hadn't bothered.

Hi, Mamzie,

There is a dedicated index tracker board on the Motley Fool - LINK. There is also a board for Exchange Traded Funds, which are also index trackers in a slightly different form - LINK.

Incademy ( LINK ) has a lot of information about investing in general.

HTH

Cheerfulcat

dunstonh

We have an IFA that deals with dhs pension pots, but when I've tried to ask about this sorta thing, I get the feeling that hes not really interested as its such a small amount.

Have a word with him. He may well stick it through on nil commission (if he is commission based) or nil fee basis (if fee based). Small transactions like this are often not worth the hassle of the full factfind and reporting but its very common on cases like this to put them through for you on nil initial commission.

Mamzie

I don't think he will, our IFA does work on commision, and I have been asking about doing something like this for about 2 years. He does seem goodish with the pensions through.

We had a 50k dollar inheritence for dh other 2 kids that he wasn't very helpful with late last year, and that I ended up converting and stick into 2 tsb savings accounts, as it needs to pay out 1/2 summer next year, and the other 1/2 in 2 yrs.

I just want to try and play with some money to try and get some for the younger 2 kids in 2020ish.

1694

There is a mathimatical fomula in a similar vein to the black scholes model of LTC that can tell you what the bottom of the market should be. Aslong as you buy below that you should will win medium-long term.

I can't work out the formula, but know there is a capcity to make on, and therfore some much smater than I have it and will use it. My advice, watch for powerfull but silent movers, not alan sugar or warren buffet, when they start buying back in, so do you.

Mamzie

I wouldn't even know where to look for them to see when they started buying again... Where can I set up a pretend portfolia please, and I think I may open a share account ready, is the a FAQ for these anywhere please?

Can I just check something please?

Is the difference is between share funds that are managed, and trackers. The fact that trackers buy every share in FSTE 100 or 250, while the other type picks and chooses?

And of course, I guess I could build my own fund and pick shares (but know that I have no idea about that.)

ulysses76

I was thinking of opening up a tracker fund also, but why the need for a mathematical formula to discover when the market is at bottom.
I would have thought that if you bought into a Tracker fund just now, when the FTSE is at 4000 & if say, in 3 years the FTSE sat at 6000, how can you not have made money from its rise.
Am I overlooking something here?
:eek:

dunstonh

A tracker is not a bad idea at all. However, its not as clear cut as many people seem to think. Common misconceptions are that trackers outperform most managed funds. They dont. Many think they are lower risk. They are not. Often they are higher risk than many funds in the same sector.

They are cheaper but you need to place that charge in context. Its not a great difference and markets move by more than the difference in the amc in half a day. So, you don't want to compromise your investments by only restricting your choice to trackers as you will miss a lot of areas that are not covered by trackers.

Trackers are better than passive managed funds typically and better than managed funds with the same investment aims. However, a lot of funds in the same sector dont have the exact same aims and objectives. For the last 15 years the FTSE100 trackers have been near the bottom or actually bottom of their sector whilst FTSE 250 trackers were spending much of the time top. Neither was in those places because they were trackers but because the areas they were in were the best place or the worst place to be investing. The FTSE all share trackers consistently come in mid table as you would expect them to.

New investors are generally more cautious than experienced investors. So, selecting a meidum/high risk fund and going 100% in to that doesnt fit with the "typical" individual. If you are accepting of that risk then thats ok but given the number of posts on here from people with concerns that it has gone down then its clear they werent accepting of the risk.

You can water the risk down by spreading your contributions over multiple funds covering different sectors. A FTSE100 tracker is so poorly diversified although large caps may be the place to be in the coming years. Although would you want to stick to just the UK large caps or look towards European as well?

~Chameleon~

For someone like myself who only wants to make some small (approx £1k) investments in shares would I be better just buying via an online broker rather than looking at managed funds?

Mamzie

dunstonh wrote: »

New investors are generally more cautious than experienced investors. So, selecting a meidum/high risk fund and going 100% in to that doesnt fit with the "typical" individual. If you are accepting of that risk then thats ok but given the number of posts on here from people with concerns that it has gone down then its clear they werent accepting of the risk.

You can water the risk down by spreading your contributions over multiple funds covering different sectors. A FTSE100 tracker is so poorly diversified although large caps may be the place to be in the coming years. Although would you want to stick to just the UK large caps or look towards European as well?

What is a large cap please? My dh is a low risk type of person, I am a comps and MSE nut, so quite enjoy a gamble/ hunt for best returns if that makes any sense.

We have a fair bit of savings, reasonable pension pot, the 2 k is money that if I lost it, I could replace it for the kids, but if I could get a much better return from it, I would be very happy to improve things for them.

I am thinking more of a FSTE 250, possibly a smaller FSTE 100 and maybe some shares. I do feel that some big firms are going to struggle greatly.

I don't know much about shares but my general feeling is that, retail is very dodgey, but I would hope that oil and energy firms would be diversifying in anticpation of fossil fuels needing to be replaced/aided by other products, and I am very interested in greenish firms, recycling, reclamation, etc.

Would 2k be big enough to split into 4 funds? Do people buy shares or funds in £10, £100, £500, lumps etc?

Mamzie

ulysses76 wrote: »

I was thinking of opening up a tracker fund also, but why the need for a mathematical formula to discover when the market is at bottom.
I would have thought that if you bought into a Tracker fund just now, when the FTSE is at 4000 & if say, in 3 years the FTSE sat at 6000, how can you not have made money from its rise.
Am I overlooking something here?
:eek:

This is something I completely don't understand.

I get if I buy a share at £1 and it gets to £2, then I have doubled my money, less charges. But what happens with trackers and funds, how do I know what a 100, 500, etc point rise is actually worth please?