House prices may halve warns Vince Cable

Kenny4315

StevieJ wrote: »

Most of the equity funds can be covered by trackers (I agree with you on the use of trackers), the others are worth paying a fund manager for (to facilitate diversity).

I have increased my net asset position by around £400k in the last 2 years, so I ain't changing my 'flexible' system. I want to know what I'm getting into and montior getting out.

StevieJ

Kenny4315 wrote: »

A FTSE 100 tracker is a reasonably diversified portfolio.

http://investing.thisismoney.co.uk/companyresearch/50058/FTSE_100/company_charts.html

As this graph since 1996 shows it is unwise to have a fixed time plan.

Go to main setting and put ALL (instead of 6 months) and draw. Can't seem to get the link to work properly.

28.7 % increase since 1996 to date

Throw in the dividends, and aknowledge that is is not exactly the fairest time to draw up chart. I don't know, but it would not surprise me if the return beat cash.

StevieJ

Kenny4315 wrote: »

I have increased my net asset position by around £400k in the last 2 years, so I ain't changing my 'flexible' system. I want to know what I'm getting into and montior getting out.

Kenny, I thought we were discussing what Mr Average should do? I am sure you are a pretty shrewd with investments.

Generali

StevieJ wrote: »

What about the dividends?

A very good question. Typically, dividends make up about half your returns from equity investment. Reinvesting dividends is what makes for fantastic returns over the very long term in a pension for example as you get the glorious magic that is compounded interest.

I don't know of a graph for the FTSE that includes dividends.

Einstein supposedly said either that compound interest is the most powerful force in the universe or that its discovery was the greatest thing in mathematics.

I'd be surpirsed if returns over the past 10 years have beaten cash if moved to a top 10 account every now and again. I also believe that is the only 10 year period where shares haven't done better than cash.

The Economist looked at returns from different investments. Shares were top, BTL was bottom showing (IIRC) an average return over 10 years of -0.5% pa.

Kenny4315

This is the whole point, mr average can see a simple FTSE 100 index on ceefax, can see x% per annum on his cash, but on more complxed stuff they'd be better off staying clear, as they won't be able to control the outcome or get out when the time is right. Stick to want you know and can control, don't follow everyone and in particular don't always listen to fund managers who win when it goes up and when it goes down, regardless of whether the investor does ..... aka current credit crisis.

StevieJ

Kenny4315 wrote: »

This is the whole point, mr average can see a simple FTSE 100 index on ceefax, can see x% per annum on his cash, but on more complxed stuff they'd be better off staying clear, as they won't be able to control the outcome or get out when the time is right. Stick to want you know and can control, don't follow everyone and in particular don't always listen to fund managers who win when it goes up and when it goes down, regardless of whether the investor does ..... aka current credit crisis.

Unless you are Bill Mott and all your own pension fund is in there.

Generali

Kenny4315 wrote: »

This is the whole point, mr average can see a simple FTSE 100 index on ceefax, can see x% per annum on his cash, but on more complxed stuff they'd be better off staying clear, as they won't be able to control the outcome or get out when the time is right. Stick to want you know and can control, don't follow everyone and in particular don't always listen to fund managers who win when it goes up and when it goes down, regardless of whether the investor does ..... aka current credit crisis.

IMO, most investors are best off dripping their money into the cheapest tracker 2 funds they can find each month, a share one and a bond one.

Kenny4315

Aren't shares sold ex div, etc

StevieJ

Generali wrote: »

A very good question. Typically, dividends make up about half your returns from equity investment. Reinvesting dividends is what makes for fantastic returns over the very long term in a pension for example as you get the glorious magic that is compounded interest.

I don't know of a graph for the FTSE that includes dividends.

Einstein supposedly said either that compound interest is the most powerful force in the universe or that its discovery was the greatest thing in mathematics.

I'd be surpirsed if returns over the past 10 years have beaten cash if moved to a top 10 account every now and again. I also believe that is the only 10 year period where shares haven't done better than cash.

The Economist looked at returns from different investments. Shares were top, BTL was bottom showing (IIRC) an average return over 10 years of -0.5% pa.

OK, we need somebody to root out are chart of the FTSE ( all-in) over the last 12 years, PURCH any chance.
It isn't very fair to wait for the Ftse to bottom (probably trade 4000-4500/5000 for the next six months) and then compare to cash. Perhaps a better measure would be to use the 200 day moving average, on the basis that markets tend to return to trend.

StevieJ

Kenny4315 wrote: »

This is the whole point, mr average can see a simple FTSE 100 index on ceefax, can see x% per annum on his cash, but on more complxed stuff they'd be better off staying clear, as they won't be able to control the outcome or get out when the time is right. Stick to want you know and can control, don't follow everyone and in particular don't always listen to fund managers who win when it goes up and when it goes down, regardless of whether the investor does ..... aka current credit crisis.

I do not disagree with you on that, I think it better to invest in a Ftse tracker than cash only, drip feeding is the safe bet, although chucking it all in while the market is at a bottom would be my preferred option, then again I have a high risk tolerance.