comments on my CRAZY portfolio please

Ginger_Red

All i know about funds and investing I've picked up from this site, a couple of sites like Citywire, and Smarter Investing by Tim Hale, but here goes:

It looks to me as though you've picked funds that appeal to you rather than deciding on sector allocation first.

Many people maintain that it's the sectors and the allocations to these which is more important than the funds themselves.

I did it like this:

1. Decided how much I could afford to invest, how much I wanted to get back, and so what growth I needed (you'll be very very unlikely to get 15% long-term)

2. Looked at all the different sectors, did a lot of research on them, and assessed which had the most growth potential, and the risk attached to each.

3. Decided what risk I was happy with (high in my case) and so decided how to split my investment into each sector.

4. Finally, chose my fund(s) in each sector.

Mine's not a million miles from yours but I probably have a smaller pot than you, so I only have it split across 7 funds, mainly Emerging Markets, but with some commodities, world-wide equities and a bond fund.

RobertR

I would be interested to know if there were any opinions here in favour of Global Property Funds? I just have a feeling the market has bottomed out and for anyone looking to diversify, this could not be a bad time to invest.

sunil1234

RobertR wrote: »

I would be interested to know if there were any opinions here in favour of Global Property Funds? I just have a feeling the market has bottomed out and for anyone looking to diversify, this could not be a bad time to invest.

I have about 5% in that. Hopefully contributes over the longer term ....again went with global rather than just a UK fund as you say.

riskyb

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Should we start our own ISA Millionaires (TO BE) club on money saving expert.

http://www.ft.com/cms/s/2/836a4c76-d309-11df-9ae9-00144feabdc0.html
Isas values rise to £1m for some investors

By Steve Lodge
Published: October 8 2010 19:35 | Last updated: October 8 2010 19:35

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Linton

IMHO too unbalanced. In particular I think you are too dependent on Resources. One problem with emerging funds IMHO is that they tend to invest significantly in things like Russian and Brazilian oil companies which will follow the oil market rather than the intrinsic growth of the local economy.

Some possibly long term lucrative areas to consider to improve the diversification: technology, far east (excluding Japan), property, special situations.

The other thing you need to do is to ensure that you rebalance regularly (but not too often). So you need, say, a fixed % of safer investments not too correlated with equity (eg gilts, corporate bonds, even fixed rate cash). Then when the riskier investments are doing well you can cream off some of the gains and conversely buy when prices are low.

Like others, I think your target return is too high. Some of the funds will achieve it, but may be too susceptible to major falls.

jamesd

100% emerging markets and natural resources would be fine if you're willing to accept the drop to 30% of value that you'll see sometimes. For a long timescale that's OK if you can handle it. Don't expect to be able to sell funds before losing money in a drop, you wont be able to sell fast enough even if you could recognise it immediately.

It seems that you have experienced a large drop so you know what you're potentially in for and how you'll react to it when it happens.

I'm not keen on as high a Chinese specific portion as you're using. I'd personally be inclined to swap most of that into Aberdeen Emerging Markets. That would cut the potential volatility a lot.

DiggerUK

riskyb,
I am always puzzled, why some posters who exhibit a 'right on' acceptance of attraction to risk, and an avowed preference for a "crazy portfolio" appear to have an aversion for gold.

As gold has gone from 187GBP 10 years ago to 856GBP today, well in excess of your wish for annual growth of 15%, why do you not have any gold exposure?
http://www.lbma.org.uk/pages/index.cfm?page_id=53&title=gold_fixings&show=2000&type=daily

And don't forget, there are plenty of ways to get exposure to gold, beyond just the physical.

sunil1234

DiggerUK wrote: »

riskyb,
I am always puzzled, why some posters who exhibit a 'right on' acceptance of attraction to risk, and an avowed preference for a "crazy portfolio" appear to have an aversion for gold.

As gold has gone from 187GBP 10 years ago to 856GBP today, well in excess of your wish for annual growth of 15%, why do you not have any gold exposure?
http://www.lbma.org.uk/pages/index.cfm?page_id=53&title=gold_fixings&show=2000&type=daily

And don't forget, there are plenty of ways to get exposure to gold, beyond just the physical.

hi, i think his resources funds have exposure to gold mining companies (if that correlates):)

Linton

DiggerUK wrote: »

riskyb,
I am always puzzled, why some posters who exhibit a 'right on' acceptance of attraction to risk, and an avowed preference for a "crazy portfolio" appear to have an aversion for gold.

As gold has gone from 187GBP 10 years ago to 856GBP today, well in excess of your wish for annual growth of 15%, why do you not have any gold exposure?
http://www.lbma.org.uk/pages/index.cfm?page_id=53&title=gold_fixings&show=2000&type=daily

And don't forget, there are plenty of ways to get exposure to gold, beyond just the physical.

You can do much better for the same sort of risk - for example my holding in JPMF Natural Resources has increased at 28% per annum since buying in 2003.

Another quite different fund I hold - First Asia-Pacific has increased in value at about the same rate as gold since I bought in 2002.

My principal disagreement with the gold bugs is the focus on a single resource. IMHO diversification is essential if you want a portfolio of higher risk investments. If you want to hold some gold as part of a high risk strategy - fine, but I personally wouldnt dare risk more than, say, 10% of my portfolio in such an investment.

DiggerUK

sunil1234 wrote: »

hi, i think his resources funds have exposure to gold mining companies (if that correlates):)

Yes, it would count. The component part of such funds is not my speciality.
It perhaps would be more appropriate if I criticised the paucity of gold exposure, not the absence.

Miners, ETF's, Allocated or Unallocated gold holdings, futures trades are all options that are very lacking riskyb, just a thought for you.

As 'Paper Gold' can be put in your SIPP, what are you waiting for, only Allocated Gold holdings, and Physical Gold cannot be put in your SIPP, any type of gold exposure that means you 'do not have pride in possession' can be put in a SIPP.