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Financial Industry think their clients are "muppets"?
Comments
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Financial advisers and 'diversified portfolios' don't acknowledge that simple truth.
Err, yes, they do. You just sound stupid saying things like this.
Investing goes in cycles, and there are plenty of ways of taking advantage of the ups and downs. Just because stocks have had a bad decade doesn't mean they're going to be bad going forward, in fact it's been a great period to pick up shares on the cheap. If you're investing for the next 20-30 years it doesn't really matter if you have a down year, or even a down decade.
Inflation hasn't always been 4% and it won't always be 4% going forward. 4% isn't even that high historically.
Here, read this. Even commodities investors think an outsize position in gold is laughable:
http://commodityhq.com/2011/seven-reasons-to-hate-gold/0 -
What needs to be acknowledged is that this crisis is real, and not something cooked up by the lunatic fringe of the precious metals community.
Financial advisers and 'diversified portfolios' don't acknowledge that simple truth. To stay in business they need the muppet's.
..._
This muppets done alright since the downturn set in, 30% fixed term cash and 70% equities (of which around 60% emerging/asia 40% Uk/US, not very diversified but the way I like it. I am well up on RPI through those troubled times, then again I don't use a financial advisor:)'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Investing goes in cycles, and there are plenty of ways of taking advantage of the ups and downs. Just because stocks have had a bad decade doesn't mean they're going to be bad going forward ...
And just because equities have a good decade/period does not mean they are going to be good going forward. Nevertheless that's what the whole equity selling pitch depends on. Let's repeat the old mantra once again, just in case it has slipped anyone's mind : The FTSE100 index has not yet matched its peak of 1999.
'Ah well', they will say, 'That's just the FTSE100' (albeit it's actually the bulk of the plc share capital), 'You have to diversify into other areas :- smaller caps, emerging markets, bonds, commodities. Also you have to get the timing right, and preferably drip-feed into funds over a period, or continuously.'
'And how do I know how to do all that ?' says the average punter (not particularly financially savvy or interested).
' You need to get an IFA to do it for you !!'
HmmmmmNo-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
GeorgeHowell wrote: »And just because equities have a good decade/period does not mean they are going to be good going forward. Nevertheless that's what the whole equity selling pitch depends on. Let's repeat the old mantra once again, just in case it has slipped anyone's mind : The FTSE100 index has not yet matched its peak of 1999.
'Ah well', they will say, 'That's just the FTSE100' (albeit it's actually the bulk of the plc share capital), 'You have to diversify into other areas :- smaller caps, emerging markets, bonds, commodities. Also you have to get the timing right, and preferably drip-feed into funds over a period, or continuously.'
'And how do I know how to do all that ?' says the average punter (not particularly financially savvy or interested).
' You need to get an IFA to do it for you !!'
Hmmmmm
The evidence in favour of equities has built up over many decades. And even over your arbitrarily chosen worst possible period from 1999, an equity investor would have done rather well if they were making regular monthly investments.
It's not rocket science, you don't need an IFA (although some would gain some value from seeking advice) and you can expect to beat the returns of cash quite comfortably over a reasonable time period.0 -
What robmatic said. Also,GeorgeHowell wrote: »'You have to diversify into other areas :- smaller caps, emerging markets, bonds, commodities. Also you have to get the timing right, and preferably drip-feed into funds over a period, or continuously.'
'And how do I know how to do all that ?' says the average punter (not particularly financially savvy or interested).
Well there's quite strong evidence that market timing is impossible, at least for your average investor, but apart from that there's nothing particularly difficult about what your saying. Setting up a nicely diversified portfolio can be as simple as choosing a single fund (such as the Vanguard LifeStrategy funds which are preconfigured with various stock/bond splits across a wide range of markets), and drip-feeding is as simple as setting up a direct debit for most investment providers.
It's not exactly rocket science, but if you want more guidance or assurance, or you don't understand how it works, then you should by all means see a financial advisor.
Trying to make out that the simple answer is just to buy gold is completely stupid and ignores the extreme risks of such a strategy. In fact, I'd say it's downright irresponsible for the gold nutjobs around here to try and foist this as a viable strategy for mainstream investors.0 -
Trying to make out that the simple answer is just to buy gold is completely stupid and ignores the extreme risks of such a strategy. In fact, I'd say it's downright irresponsible for the gold nutjobs around here to try and foist this as a viable strategy for mainstream investors.
Indeed
http://inflationdata.com/inflation/inflation_rate/gold_inflation.asp'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0 -
What robmatic said. Also,
Well there's quite strong evidence that market timing is impossible, at least for your average investor, but apart from that there's nothing particularly difficult about what your saying. Setting up a nicely diversified portfolio can be as simple as choosing a single fund (such as the Vanguard LifeStrategy funds which are preconfigured with various stock/bond splits across a wide range of markets), and drip-feeding is as simple as setting up a direct debit for most investment providers.
It's not exactly rocket science, but if you want more guidance or assurance, or you don't understand how it works, then you should by all means see a financial advisor.
Trying to make out that the simple answer is just to buy gold is completely stupid and ignores the extreme risks of such a strategy. In fact, I'd say it's downright irresponsible for the gold nutjobs around here to try and foist this as a viable strategy for mainstream investors.
Point missed completely, I was quoting what IFAs typically say, not stating what I think.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
The evidence in favour of equities has built up over many decades. And even over your arbitrarily chosen worst possible period from 1999, an equity investor would have done rather well if they were making regular monthly investments.
It's not rocket science, you don't need an IFA (although some would gain some value from seeking advice) and you can expect to beat the returns of cash quite comfortably over a reasonable time period.
The evidence has built up if one assumes that past performance is an indicator of future trends. But I don't accept that. The chosen worst possible period happens to be that between the all-time peak ... and now -- hardly arbitrarily selected just to make a point. And I would have thought that 12 years is a reasonable time period -- how much longer should a 1999 investor expect to wait to even get their money back ?
It's the same old arguments which the financial advice industry has to keep putting up in order to try to survive. But they just don't hang together.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
GeorgeHowell wrote: »Point missed completely, I was quoting what IFAs typically say, not stating what I think.
And you missed the point. If IFAs say that sort of thing about creating portfolios then they are quite correct in doing so. Whether or not an investor needs to go to an IFA to get that advice depends on the investor's preference.GeorgeHowell wrote: »And I would have thought that 12 years is a reasonable time period -- how much longer should a 1999 investor expect to wait to even get their money back ?
They didn't have to wait very long. A simple buy and hold strategy over the last 12-13 years would have produced a positive real return if only due to the dividends from stocks. A slightly more complicated asset allocation including bonds with some rebalancing and regular investment would have been higher still.
You need to stop paying attention to bare FTSE (or other index) numbers, and include re-invested dividends and other portfolio strategies if you're going to get a good idea of how good an investment stocks are. For example, looking at the FTSE All-Share, an investor starting in 1999 would still have a positive nominal return even at the market bottom in 2008 due to the power of dividends and compounding interest.
http://www.bestinvest.co.uk/article/7672/The-Power-of-Dividends
Gold, on the other hand, produces no income to help temper downswings.0 -
Which is as helpful as saying that pigs don't produce sheep........Gold, on the other hand, produces no income to help temper downswings.
You don't put savings in to gold for an income, you do it for a future return when you sell. My opinion, is that it's a long term investment, that ticks all the boxes for security of returning what you put in, with a bit on top.
Recent massive short term returns are out of the ordinary run of things. There will come a time when they will be far more modest.
Putting funds in to gold is more akin to putting by in the fat years, for when the lean years arrive. Stating the obvious serves no purpose.
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