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Advice for first time pension planner

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  • jem16
    jem16 Posts: 19,584 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 4 April 2011 at 5:26PM
    The government then takes taxes from it and decides how to spend it.

    Along with all the taxes from the public sector workers.
    Most of this money goes on the non-productive part of the economy - namely the public sector.

    I'd like to see the country run without the public sector.
    Labour expanded this non-productive part of the economy to the point where it was bigger than the private sector (a big mistake). That's part of the reason we are in the financial mess we are in.

    The other (main) part being the obscene bonuses being paid out to the private sector bankers.
    It's about time the public sector was cut back and the overly generous final salary schemes were brought back to reality

    Yes those overly generous public sector pensions which on average are £7kpa and the majority of which are less than £5k - much better than Fred Goodwin's miserly RBS pension. ;)
  • jem16
    jem16 Posts: 19,584 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 6 April 2011 at 9:04AM
    WARNING !!! It's even worse than I thought. Placing your trust in Dunstohn and his friends will severeley damage your wealth.

    The only thing that will damage my wealth is following your much too simplistic advice.

    For example in the 5 years till November 2010 the top active managed fund in the UK All Companies sector was L&G UK Alpha which returned 110.35%. The top tracker in the same sector was Scottish Widows UK All Share Tracker with a return of 30.46. At the moment those two same funds are 118.8% and 19.4% respectively. That's quite a difference.

    http://www.trustnet.com/Investments/Perf.aspx?ctr=QS&univ=O&Pf_AssetClass=A:&Pf_Sector=O:UKALL&Pf_sortedColumn=Performance.P60m,NameFull&Pf_sortedDirection=DESC

    You'll need to click on the above link and then click on the 5yr performance to sort them - link isn't behaving.

    The best thing that anyone can do is to have a properly diversified portfolio which may well contain a mixture of trackers and managed funds depending on the sector and timing. It's not all about sticking £5k into a single index tracker.
  • mickflynn39
    mickflynn39 Posts: 174 Forumite
    You do realise that fool take their data from the US where that is the case and not the UK where taxation is different and tracker funds. In the US tracker funds have a tax advantage over managed and it makes most managed funds near impossible to outperform. That tax difference doesnt apply to the UK?

    Would you like to explain how a FTSE all share tracker is mid table if its mean to be beating 90% of the funds?

    Would you also like to explain why fool have more recently started going into stockpicking and selling it as a service if they believe that tracker is best?

    I don't want to turn this into a tracker vs managed debate as that isnt the issue. Plus, the pros and cons of both are not as simple as made out would not be understood by mickyflynn (or he would choose not to understand them but just keep an opposite view). I fear any attempt to balance the debate with pros and cons would just be taken as a polarised view by him.

    You really are clutching at straws now. The site is a UK site. Here's another link from a UK company saying the same thing. http://www.lovemoney.com/isas/information/trackers-versus-managed-funds.aspx You only ever look at data selectively (and twist it) to try and make your point. My comments relate to the long term not the short term. You however, pick whatever period of time suits your spurious argument. This is where you constantly fall down. You obviously don't want to turn this into a tracker vs managed debate because you have so blatantly already lost the argument and must be very embarrassed at your earlier pronouncements. Do the decent thing and contact all your clients and refund your commission and then advise them to read my posts for some excellent investing advice. They will save a fortune and have a much better retirement.
  • mickflynn39
    mickflynn39 Posts: 174 Forumite
    You'll need to click on the above link and then click on the 5yr performance to sort them - link isn't behaving.


    You think 5 years is the long term? In my book 20 years or more is long term. You fall into the trap of dunstonh by picking time periods to suit your argument.
  • mickflynn39
    mickflynn39 Posts: 174 Forumite
    Progress at last.


    Let me keep it simple. If say 80% of index trackers beat managed funds then 20% of managed funds will beat index trackers. Therefore the best managed fund is obviously going to beat an index tracker. What is so hard to understand about that? You really are being pedantic.
  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    Let me keep it simple. If say 80% of index trackers beat managed funds then 20% of managed funds will beat index trackers. Therefore the best managed fund is obviously going to beat an index tracker. What is so hard to understand about that? You really are being pedantic.

    Is it 80% or 90%?

    Your bold bit is also completely wrong. In the USA index trackers do, a lot of the time, beat managed funds. This is because the costs involved are completely different. Surprisingly, the UK has a different cost system to the USA, this is why index trackers do not beat the managed fund 80% of the time in the UK.
  • Linton
    Linton Posts: 18,154 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Hung up my suit!
    I hardly consider a journalist's somewhat meaningless summary of undisclosed data good evidence.

    In what sense is the FTSE All Share THE benchmark? Does this total, if it's correct, include cautious funds where performance is deliberately sacrificed to avoid major fluctuations, gilt and bond funds which provide in general much lower growth but less fluctuation etc etc?

    Is the data actually correct and based on the UK situation rather than a regurgitated US report. Who knows?

    Perhaps I can supply you with good evidence. There seems to be no data for more than 5 years, so where the Which report got its data from is unclear.

    Taking the past 5 years using all the 1512 funds which have been running for 5 years listed on www.trustnet.com I find.

    The best FTSE all share tracker - Scot Widows position 589
    The worst FTSE all share tracker - Halifax position 1049

    So one could say that choosing a FTSE all share tracker at random will give you much the same average chances as chosing any fund at random.

    But of course although you may as well choose an AllShare tracker at random you are unlikely to choose a niche managed fund at random.

    Look at the sorted Trustnet list. The really well performing funds, far better than any AllShare tracker are concentrated in specific sectors as are the really badly performing funds. It did not take great insight 5 years ago to chose the well performing sectors - Far East and other Emerging Markets, Natural resources. Investing in these areas would have given you 3-7 times the return of any AllShare tracker.

    Anyone who bases their investing strategy on All Share trackers deserves the return they will get. Anyone who advocates other people use that strategy is grossly irresponsible.
  • Hi everyone

    Please try to back up what you feel are facts with the source. If you don't have a source then please don't present it as fact, just say it's your opinion.

    While "feeding the trolls" may be fun it gives us a lot more work if you're also going to report them. We've had to remove many posts from this thread with the aim of keeping it open to help the original poster.

    Please help them by bringing your posts back to answering their posts please.

    Thank you!

    Andrea :)
    Could you do with a Money Makeover?


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  • mickflynn39
    mickflynn39 Posts: 174 Forumite
    edited 7 April 2011 at 7:27AM
    I hardly consider a journalist's somewhat meaningless summary of undisclosed data good evidence.


    Here is the link to the report which Linton refers to. http://www.which.co.uk/money/savings-and-investments/guides/different-types-of-investment/active-vs-passive-investment/ I consider 'Which' to be an excellent source of information. When scouring the net I have found many other reports which say much the same thing as 'Which'. In my opinion the evidence is overwhelming that over the long term (which I consider to be more than 10 years) index trackers will perform much better than the vast majority of actively managed funds. I've yet to find a report that argues differently. If you don't believe me then do the same exercise and scour the net. Here are a couple more links to back up what I say. http://www.lovemoney.com/isas/information/trackers-versus-managed-funds.aspx
    http://www.fool.co.uk/Your-Money/guides/Index-Trackers-Vs-Managed-Funds.aspx

    All these reports refer to the UK not the US.
  • mickflynn39
    mickflynn39 Posts: 174 Forumite
    It did not take great insight 5 years ago to chose the well performing sectors - Far East and other Emerging Markets, Natural resources. Investing in these areas would have given you 3-7 times the return of any AllShare tracker.


    Hindsight is a wonderful thing. Historically it has been virtually impossible to pick the best performing funds. There are far too many variables at work and none of us have a crystal ball. Well done if you guessed right but that is what everyone does when they make an investment decision.
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