First time funds investor

db7

DiggerUK wrote: »

db7,
Me and Mrs.D. were about 10 years older than you when we cleared our mortgage.
Trust me, you can save, and even gamble, all you want when that money going out of your A/C each month stays there.
Work and a wage is not guaranteed, if you secure the roof over your head now you can survive anything coming round the bend, be that boom or bust.

To have your mortgage gone by 40 is an unrealisable dream for most, I urge you to make it a reality.
You can always gamble each month with what you made in repayments after that, with no risk to your home.

Seriously, all the best.

I appreciate your views and am sure many (maybe most) people would agree with you. But my opinion is that using your ISA allowance each year is more important than paying off your mortgage. As the Telegraph quoted someone at the weekend - people should make the most of tax-free allowances while they're around. Paying off my mortgage and losing all the tax-free wrappers just wouldn't make sense to me. And I'll be very disappointed if my investments don't exceed the 5% mortgage rate.

DiggerUK

db7 wrote: »

I appreciate your views and am sure many (maybe most) people would agree with you.

Most people, quite rightly, regard the man as bonkers and have him on their ignore list, you should join them.

FATHEROFTWO_2

Unless you know what you are doing you are basically gambling.

Best to look at a fund of funds.
Do you know what they are?
They are a bit more expensive but you can utilise a fund that specialises in picking funds that have a god asset allocation and it will offset risks in various sectors.In other words it will stop you putting all your eggs in one one basket

db7

FATHEROFTWO wrote: »

Unless you know what you are doing you are basically gambling.

Best to look at a fund of funds.
Do you know what they are?
They are a bit more expensive but you can utilise a fund that specialises in picking funds that have a god asset allocation and it will offset risks in various sectors.In other words it will stop you putting all your eggs in one one basket

A fund of funds? Is that like the HL Multi-Manager Inc & Growth Portfolio?

Aegis

FATHEROFTWO wrote: »

Unless you know what you are doing you are basically gambling.

Best to look at a fund of funds.
Do you know what they are?
They are a bit more expensive but you can utilise a fund that specialises in picking funds that have a god asset allocation and it will offset risks in various sectors.In other words it will stop you putting all your eggs in one one basket

See, I'd say that it's worth putting in the extra time and picking some funds yourself. If you want a starting point, you can even go into a fund of funds, see what they invest in, then pick some of their top holdings and the starting point.

While the automatic asset allocation is nice to have, a fund of funds needs to seriously outperform its benchmark to get any real return. With TERs in the region of 2.25-2.75% you need to outperform that AND inflation to actually get a positive real return. Couple that with the fact that funds of funds tend to assume that people are low risk investors and you get a high-charging and fairly low return vehicle.

There may be exceptions, but I've so far been unimpressed with most funds of funds that I've seen to date.

sabretoothtigger

It might be better to invest in the pacific in general rather then just china

dunstonh

HL's multimanager funds are poor. You find many cheap balanced managed funds come in better. That said, there are some good externally managed fund of funds which are better for the smaller and inexperienced investor. Would I personally have one? no. However, its better that someone that doesnt know what they are doing uses one of those than invest well above their risk profile with no rebalancing and strategy.

As it stands, the fund choice has no strategy and is mostly very high risk. Its a punt.

db7

dunstonh wrote: »

HL's multimanager funds are poor. You find many cheap balanced managed funds come in better. That said, there are some good externally managed fund of funds which are better for the smaller and inexperienced investor. Would I personally have one? no. However, its better that someone that doesnt know what they are doing uses one of those than invest well above their risk profile with no rebalancing and strategy.

As it stands, the fund choice has no strategy and is mostly very high risk. Its a punt.

Do you think I'd be better off seeing an IFA rather than choosing funds myself and getting them via HL? Or should I just reduce the risk by reducing emerging markets. I'm also confused by the charging structure at HL - would I be saving much by going to them rather than an IFA who takes commission? Of course, I suppose another option is to pay an IFA a fee.

lisyloo

But my opinion is that using your ISA allowance each year is more important than paying off your mortgage

I agree with you db7.
I am a 40% tax payer with a mortgage rate of 0.99%.
It's a no brainer to save/invest - even your repayments.

You can knock your mortgage down when you get an inheritance or pansion lump sum or bonus.
You cannot stick a large lump sum into ISAs, you have to build them up over time.

We have a large amount in ISAs (not quite 6 figures but getting there).
We could pay off a lot of the mortgage at the drop of a hat.
To my mind that's just as good as actually paying it off (I'm talking about cash baked by FSCS guarantee, obviously there is a risk with investments).

So I'm with you on that one.

I'm not an expert on investments, so we pay an IFA an extra 0.5% in charges to manage our portfolios. They are reviewed and changed if necessary on a monthly basis. We jsut agree (or not).

Rollinghome

db7 wrote: »

And I'll be very disappointed if my investments don't exceed the 5% mortgage rate.

So be prepared to be disappointed. The return on the markets might well be 5% but if you use unit trusts you'll be paying TERs close to 2% out of that. I've got large sums invested but I wish it was as easy as you assume.

One of the most successful managers of the Balanced Managed funds aleady mentioned is Martin Grey who runs the Miton Special Situations Pf. If you look here as at 30 November http://mitonam.com/pdf/factsheets/uk/CFMitonSpecialSituationsPortfolio-Factsheet.pdf only around 30% of the pf is now in equities with most of the rest in cash. He could be getting it completely wrong but you perhaps need to ask what is it you know that he doesn't?

The problem is that we're currentlyly in uncharted waters and no one quite knows how it will pan out. The huge rebound for equities was due to the unprecedented use of quantative easing and untra-low interest rates around the world. What will happen to equity prices and the cost of your mortgage when that policy ends?

We don't know the details of your mortgage but what you would be doing is is to use borrowed money for a flutter on the stock market at a very unpredictable time.