Funds - the more risky type - Advice pls.

jep49

Going through my portfolio today. Getting a bit nervous about commodities and america , what with recent gains. So sold a couple to get a capital gain. But where to go next ? Are we at a top or is this the start of a dip. What the general oppinion. I was looking to dump a whole lot of cash into funds, but am a bit nervious.

jep49

DiggerUK wrote: »

phsycy,
You make no mention of gold portfolios, paper gold in ETF's, or mining companies. Huge area to overlook.
Considering the track record of all things close to gold, along with the ammount of funny money inflating currencies, I would advise these areas as amongst the safest plays for S&S ISA's.

Best of fortune.

Dont you think gold is a bit high now? I was planning to get an etf to add to a couple of mining funds, but cant figure where gold is going. What do u think?

Linton

jep49 wrote: »

Going through my portfolio today. Getting a bit nervous about commodities and america , what with recent gains. So sold a couple to get a capital gain. But where to go next ? Are we at a top or is this the start of a dip. What the general oppinion. I was looking to dump a whole lot of cash into funds, but am a bit nervious.

Suggest you dont try to time the market with funds. No-one really knows whether we are at the top, bottom, or somewhere in the middle: if lots of people knew the prices would move to the point where they didnt.

On average you will lose because of transaction costs. If you aim to hold your funds for a long period (5+ years) you should not worry too much about temporary movements.

If you sell up completely how will you know when to get back into the market? The only reason I can see for turning the lot into cash is if you need the cash.

You are better off having a wide range of different investments and accepting that over time some will do badly for a while and others will do well. If you have diversified effectively you should be able to make minor tweaks at regular but infrequent intervals to take profits from the well performing funds and buy into other funds that are hopefully temporarily cheap.

DiggerUK

jep49 wrote: »

Dont you think gold is a bit high now? I was planning to get an etf to add to a couple of mining funds, but cant figure where gold is going. What do u think?

Me and Mrs.D have 60% of our retirement cash savings in gold, so that should say how we feel.

Gold is only rising because currencies are failing, it is the debasement of currencies that is the main cause of golds rise.
As the full effect of QE has to work it's way through, then I see a lot further for gold to go.
In the here and now it could fall back to 700GBP an ounce, maybe less. Any rally in the pound is a good sign that it may be time to buy. Just buy on dips and troughs, little and often.

Paper gold in the OP's S&S ISA will follow golds fortunes, don't forget you can't put physical gold in any UK tax free savings investment. Deed box in bank is cheapest.

Rollinghome

Linton wrote: »

You are still axe grinding! Lets look at some facts from Trustnet etc, etc....

Are you seriously suggesting that a higher fee results in higher returns? By that logic the Cru Arch funds would have been right up your street with a TER of over 2.5% and double the usual trail commission offered to IFAs.

In fact of course they all collapsed. See:: http://www.mrscohen.com/personal/-/news/markets-companies-and-funds/content.aspx?ID=332979

Be sure to read the comments of those at the bottom of the page who were persuaded by their IFAs to put money into the Cru Arch by telling them it was a low risk investment.

Ask yourself, if funds with the highest fee could be relied upon to outperform then when why do the managers need to pay so much more commission than for the lowest cost funds to persuade IFAs to sell them? Is it because even if they were the best funds, IFAs couldn't be trusted to recommend them unless they paid a good level of commission?

I notice a grateful IFA has thanked you for your post encouraging us to ignore charges. Now why does that not surprise me?

Linton

Rollinghome wrote: »

Are you seriously suggesting that a higher fee results in higher returns? By that logic the Cru Arch funds would have been right up your street with a TER of over 2.5% and double the usual trail commission offered to IFAs.

No - I am saying that there is no useful correlation between the level of charges and the returns you will get.

A fund is a good or bad fund irrespective of the charges. Using the charges as a determining factor eg by condemning all high charging funds, could lead you to making some very silly decisions. The very low charging funds, FTSE index trackers, have been a very poor investment for more than 10 years.

If that's how you want to invest your own money, fine, but pls dont mislead the many inexperienced investors that use this board.

Rollinghome

dunstonh wrote: »

Adding to Linton's figures, over that same 5 year period

Asia Pacific Ex Japan sector average = 118.80%
HSBC Pacific index tracker= 93.35%
L&G Pacific index tracker = 100.59%

The trackers in that sector are not even keeping up with sector average.

Trackers do best in well-regulated markets. So if you look at Japan you see something very different: http://www.trustnet.com/Investments/Perf.aspx?univ=U&Pf_AssetClass=A:&Pf_Sector=U:JAP&Pf_sortedColumn=Performance[Cur].P60m,NameFull&Pf_sortedDirection=DESC

Of 55 Japan funds only 9 outperformed the trackers over 5 years.

They also do better with large caps than small caps.

Now if as an IFA you took as much interest in funds that pay you little or no commission as those which pay you the best commission you would have known that.

dunstonh

Now if as an IFA you took as much interest in funds that pay you little or no commission as those which pay you the best commission you would have known that.

Pathetic response from you as per normal. I think you must rate as the most ignorant poster on these boards.

Rollinghome

Linton wrote: »

No - I am saying that there is no useful correlation between the level of charges and the returns you will get.

A fund is a good or bad fund irrespective of the charges. Using the charges as a determining factor eg by condemning all high charging funds, could lead you to making some very silly decisions. The very low charging funds, FTSE index trackers, have been a very poor investment for more than 10 years.

If that's how you want to invest your own money, fine, but pls dont mislead the many inexperienced investors that use this board.

That's complete nonsense.

Unfortunately, consistently, the majority of managed funds underperform the FTSE indexes and the indexes that track them for obvious reasons. Of 315 funds in the UK All Companies sector only 25 have beaten the HSBC FTSE 250 tracker over 5 years and the bottom quartiles are occupied exclusively by high cost managed funds. The worst managed funds have been discontinued or merged and all of the disasterous New Star's funds had to be taken over by Hendersons due to bad performance.

One reason for that is that many managed funds are little more than trackers but with higher charges. Any index trackers that charge high fees in order to pay higher commision will have the same problem as managed funds.

That isn't to say that that all managed funds will underperform the index but the difficulty for investors is identifying them in advance. 20/20 hindsight is easy. Even managed fundsthat have outperformed can suddnly go very wrong as with Invesco Perpetual Income which may or may not recover. That won't necessarily be the case of all indexes worldwide where markets may be less efficient.

I assume you class yourself as an experienced investor which certainly isn't apparent from your naive posts. You even seemed totally unaware of the cost of buying equities. I'm haven't the time or inclination to explain it you so I suggest you read this useful thread http://forums.moneysavingexpert.com/showthread.html?t=2209297&page=4 and if you find it too complicated get a good book such as the FT publication "Smarter Investing" or a fee-based adviser to explain it to you.

Rollinghome

dunstonh wrote: »

Pathetic response from you as per normal. I think you must rate as the most ignorant poster on these boards.

Resorting to abuse in the face of facts is hardly a sign of erudition but not unexpected given your background.