Independent Financial Advisers fees vs Novice Investor!

jem16

Janeybo wrote: »

And that is the other thing re. thousands of funds, just from looking at HL site I can see loads of funds, and I think that's why people chose to see an IFA.

Probably quite right.

saveonarola wrote: »

As I said in my earlier long post, picking funds is a small part of the investment process. In fact, it's quite a simple, mechanical thing, once you've decided how to invest your money. Trying to build or understand a portfolio without first understanding asset allocation and the other basics of investing is like trying to build a house without first laying the foundations.

It's really all important. However once you have narrowed down the sectors to invest in, you can still have hundreds of funds to choose from.

saveonarola

jem16 wrote: »

However once you have narrowed down the sectors to invest in, you can still have hundreds of funds to choose from.

Okay, maybe I was exaggerating. But my point to Janeybo was that the more you know about investing, the easier the choice becomes. For a novice investor, seeing the enormous number of funds available from a broker like Hargreaves Lansdown can be very intimidating. But once you understand the roles played by different types of funds in a well-planned portfolio, it becomes a lot simpler. To use another metaphor, if you went to Tesco and you didn't know the difference between fruit, bread and beer, you wouldn't know where to start. A fund supermarket is no different.

Of course, it can still be intimidating, even if you do know a bit more about it, which is why I said previously that using an adviser is a perfectly legitimate decision if you don't feel that you have the time or the inclination or the confidence to do the research and make these decisions yourself. Better to spend the money than make random choices of your own and lose the lot!

gadgetmind

saveonarola wrote: »

But once you understand the roles played by different types of funds in a well-planned portfolio, it becomes a lot simpler.

As Warren Buffet said, "Investing is simple but not easy."

How would you choose (say) a global equity fund? I am genuinely interested in the selection/filtering approaches that people have used.

After saying three "Tim Hale Marys", I'm prepared to confess that I do still hold six funds with "global" in their name, funds which I've picked up over the years and occasionally added to,

These are -
First State Global Emerging Market Leaders - not global equity.
First State Global Listed Infrastructure - ditto
First State Global Resources - ditto
JP Morgan Global Equity Income - kind of, but with filtering
M&G Global Basics - dunno, what do you think?
Rathbone Global Opportunities - golly, this might qualify!

The weightings are towards M&G, Rathbone, and the FS EM fund, with the others being stocking fillers.

If I flogged the lot (which I'm considering) and went for a low-TER global tracker, would it all average out the same over the period that I've held? I'll have to crunch some numbers and see as it's an interesting question!

They haven't been a bad bunch, but I strongly suspect that I'm holding a high-TER closet tracker.

darkpool

Lokolo wrote: »

No but a lot of other users, in other threads, are in the same situation. And instead of continuing reading the responses like you have, will give up and not return to MSE. Hence the "Please do not derail threads" comments to darkpool as he has a habit of doing so.

LOL!! I thought you threw a strop because i was exposing how feeble your arguments for UTs were. I bet if you thought you were winning the argument you wouldn't have thrown the toys out the pram.

Never mind, you can tell me another day why a single fund that does well is proof that active management works, while a fund that loses money hand over fist isn't proof that active management is over priced and over hyped.

gadgetmind

Can I perhaps suggest that we all put a lot of work into disagreeing without being disagreeable?

darkpool

Janeybo wrote: »

Quick reply, Yes thanks I did understand, sorry it's language again, I realise that to say 'track' means something else here.

you seem smarter than most of the people here. you should really consider the merits of paying for active management. perhaps get a few books and just consider if the fees entailed by active management are worth it.

I'll agree that most of the people on this thread swear by unit trusts, however sometimes the minority has the right idea and the majority are wrong

fairleads

darkpool wrote: »

however sometimes the minority has the right idea and the majority are wrong

Alleluia

(with apologies for cherry picking your comment)

Ark_Welder

Indeed. By far, the majority seem to feel that they need to benchmark their performance against stock market indices.

gadgetmind

Ark_Welder wrote: »

Indeed. By far, the majority seem to feel that they need to benchmark their performance against stock market indices.

Why shouldn't they? If the subset of the market that they hold via funds underperforms holding the whole market via trackers, then isn't that something worth knowing?

Ark_Welder

gadgetmind wrote: »

Why shouldn't they? If the subset of the market that they hold via funds underperforms holding the whole market via trackers, then isn't that something worth knowing?

Merely agreeing with the sentiments previously expressed, which are that the minority could be right. You appear to be implying 'the majority' to mean 'index tracker investors'.