Your views on locking in Unit Trust gains please

cloud_dog

Linton wrote: »

In addition there's the stress. With market timing there is the continuous worry about whether the timing is right and the self blame when you get it wrong. Go once a year and all you need worry about is the calendar.

If I could just add a comment.... about 4 years ago (beginning of 2006) I made the decision to move my invesment portfolio from passive (primarilly) funds based invements in to actively managed stocks investments.

In order to assess how I was performing I kept my old funds virtual portfolio in iii (https://www.iii.co.uk). Doing some quick calculations, over 4 years my funds have grown 22%, whilst my actively managed portfolio has increased by 98%. Whilst my investments are different they are similarly focussed, resources and emerging economies. One of the plusses for me was being out of this market in Mrch/April 2006 and then only about 50% invested in October 2007 and on.

Linton wrote: »

But I guess Cloud Dog is right, its a personal style thing. If you are a natural tinkerer and it keeps you happy how can I object!

Very much agree with this, you need to want to spend the time effort investigating, analysing, (worrying), BUT, going forward I am concerned we may have a number of years of being range bound, or at least increases with significant decreases.

As Linton said it is a style thing, you need to be comfortable with your approach, and if you are then it doesn't matter which way you go.

pete80

Thanks everyone for all your useful comments, this second page really shows our differences in investing styles. It shows I am probably in a minority with my current view but I will seriously consider some of these views when making my decision sometime in May.

I should have given a bit more info when I first posted on this thread, I am Non-Resident so CGT does not affect me and I do not get taxed on worldwide income or capital gains from outside of where I currently live.

Rebalancing has always played an important part in my investing but since I started spread betting as well 4 years ago I tend to take more notice of current news and views regarding the markets.

I will maybe consider leaving a couple of funds fully invested and take a chance on going with my original plan on the remaining funds.

Thanks again for your views

pete80

artha wrote: »

I dont necessarily agree. Tell that to the 10 year passive investors who started in 1999 and had to take their pot in early 2009.

According to statistics the average bull run lasts 1000 days so with that in mind surely the long term active investor should be prepared to either switch in and out of the market and/or move up/down in fund volatility according to their reading of the conditions and warning signs. I do agree however that perfect timing is probably more luck than judgement

Artha

Thank God that I was out of the market a few months before the tech bubble popped (that was good timing) and also the 2008 crash (that was sheer luck as doing a RTW trip and left my whole net worth in cash)

I remember seeing a discussion on CNBC where a few analysts and stock pickers all seemed to agree that buy & hold investing style was broken and that investors had to devote more time to their portfolios and make more decisions on a more frequent basis. This current bull run is only this great because of the huge drop we had in 08/09, the big annual rises in the markets like we had in the 80's and 90's may not return for some time.

Being an long term Active investor has it's merits and can pull in greater profits but it needs the extra time for reading financial articles and making own decisions from there. I have too much time on my hands now so that suits me well but I can also see the reasoning of passive investors too if they cannot spare the time to study the markets as much. At the end of the day Swings and Roundabouts really, whatever makes us happy.

ag359

always amusing to see people massively overestimating the impact of their 'timing' on their investment returns. It's just luck guys!

dunstonh

ag359 wrote: »

always amusing to see people massively overestimating the impact of their 'timing' on their investment returns. It's just luck guys!

Modern Portfolio theory has many research articles and information (often just to update the stats!)

Research by Brinson, Singer and Beebower has shown that by far the most dominant contributor to the variability of total portfolio returns is the asset allocation of that investment portfolio (that is the proportion held in shares, property, bonds and cash). According to this seminal study on the subject, asset allocation, on average, accounts for 91.5% of the variation of portfolio returns over time. Subsequent studies have realised similarly significant results.

91.5% was down to asset allocation
4.6% down to stock selection
2.1% down to "other" (luck and charges being the bulk of that)
1.8% down to market timing.

pete80

dunstonh wrote: »

Modern Portfolio theory has many research articles and information (often just to update the stats!)

Research by Brinson, Singer and Beebower has shown that by far the most dominant contributor to the variability of total portfolio returns is the asset allocation of that investment portfolio (that is the proportion held in shares, property, bonds and cash). According to this seminal study on the subject, asset allocation, on average, accounts for 91.5% of the variation of portfolio returns over time. Subsequent studies have realised similarly significant results.

91.5% was down to asset allocation
4.6% down to stock selection
2.1% down to "other" (luck and charges being the bulk of that)
1.8% down to market timing.

In a way I can agree with the above too dunstonh but asset allocation and timing seemed to go hand in hand for me from beginning of 2000 to 2007 when approx 95% of my invested net worth was in BTL, not a bad call whichever way you like to class it.

cloud_dog

pete80 wrote: »

....This current bull run is only this great because of the huge drop we had in 08/09, the big annual rises in the markets like we had in the 80's and 90's may not return for some time.

I do not believe this is a 'bull run', and it has primarilly been driven by the huge liquidity injected in to the financial machine.

Having said that there are 'things' on the horizon which may ensure stock markets (shares) continue to increase, nominally, for a while yet (bonds yield, whats China doing with its money before is re-values its currency, inflation, how much are the PPT interfering).

Its too late to even think about going in to this in more detail but there is food for thought out there for those of us who wish to look, and possibly increase our chances of being lucky