Innappropriate Investments

jamesd

It's the sort of product that might be worth a small portion of your money. Diversifying in time and investment - including counterparty - is one of the tools you can use to increase your chance of not being a loser. Have a look at structuredproductsreview.com and see what it has to say about various things and the credit ratings of the counterparties.

Ark_Welder

darkpool wrote: »

so you think all 12 year old documents are obsolete? or just this one?

Some 12-year old documents will be obsolete, but other 12-year old documents will not. There is no 'one' or 'all' about it - unless you are a Musketeer.

However, jamesd has already given an answer to that in this thread if you would like things to be a bit clearer.

darkpool wrote: »

so what do you think the cost of a "round trip" is? why don't you show some calcs to back your figure up as well. perhaps do it for a developed market and an emerging market.

You are still assuming that Portfolio Turnover Rate is an accurate indicator of churning - or 'round trip', if you prefer. Because you suggest trackers as investments, perhaps you could explain your understanding by providing answers on this thread. I had intended to do so, but now I look forward to yours...


I think that the cost of a round trip would be no different for a fund than it would for an individual - except that I would expect that the fund would be in a better position to reduce its costs. This is not a charge which applies only to actively managed funds.

[@jamesd: the Barclays/HSBC example refered to earlier is from the 2007 article that darkpool brought up]


Sourced from today's FT web-site @15:48 with a 15 minute delay:

HSBC Bid/Offer: 490.35/490.45 giving a bid/offer spread of 0.0204%

Using my highest commission charge of a fixed £12.50, on a £10,000 trade that would be 0.12%

Would £10k in HSBC be enough to move the price higher before I make the purchase? I doubt it - certainly not on its own, but perhaps as the result of others looking to buy at the same time, so price impact could be anywhere from zero to something higher. In fact, I have made purchases and the price a few minutes afterwards has been lower than I paid....:)

Add in Stamp duty and PTM levy (being as the purchase amount is £10k) and you can add it all up yourself.


An important point to remember about emerging market equities is that purchases are not subject to UK stamp duty, so anyone that has an interest in working out theoretical trades should factor this into their own calculations.

darkpool wrote: »

why are you ignoring the evidence from the guardian and investors' chronicle? is it because they are only a month old? or is it because they contradict what you have been saying?

jamesd has already given an answer to that in this thread. Perhaps the IC will eventually update its articles with current costs rather like Which? magazine eventually did - presumably, that is why you no longer quote them.

darkpool wrote: »

well done, i read your post and i believe i get what point you are making. it must feel good not needing someone to translate your posts?
.
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i hope you manage to respond to this post in plain simple language, and i don't mean you refering to a document and expecting people to guess what you mean.

:dance:

sabretoothtigger

Gaining 6x what the FTSE gains sounds too good to be true. Such products do exist but they involve loss of all capital if wrong, otherwise known as options or derivatives

Brightwater

I've gone for the Morgan Stanley product. I will be looking at alternatives next year and the year after to spread exit dates and with different counterparties to spread risk.

Brightwater

I am considering the Castle Trust 5 year growth Housa -

Term...Return if HHPI rises...Return if HHPI falls

3 Yrs...1.25 x HHPI % rise.......0.75 x HHPI % fall

5 Yrs...1.50 x HHPI % rise....0.50 x HHPI % fall

10 Yrs..1.70 x HHPI % rise.......0.30 x HHPI % fall

I understand and accept the investment risk. What isn't clear to me is what happens if Castle Trust goes bust. The prospectus says "backed by J C Flowers" and mentions FSCS. There doesn't appear to be a counterparty.

Anyone else bought or considering this who may be able to clarify please?

sabretoothtigger

Are they borrowing money because otherwise the trust owns the land/housing. Other firms are just managers?

Brightwater

Brightwater wrote: »

I've gone for the Morgan Stanley product. I will be looking at alternatives next year and the year after to spread exit dates and with different counterparties to spread risk.

Woohoo it paid out 160%.

Does anyone know please are there any Aussie index structured products available?