A few questions on investing

Radiantsoul

I think it is a good book btw and enjoyed it. It was certainly thought provoking.

I do feel you rather biased your argument when it comes to funds by pointing out people enter them at the wrong time and using this to show a lower return than appears. Meanwhile with cash savings you assume that people are savvy enough to switch to the highest rate. My guess is there a lot of people with thousands stuffed in current accounts earning close to zero interest. Probably the reason that so many ISA have rates that drop away is that most people leave their money at the end of the tied in period.

Rollinghome

Well done for writing the book Pete and for raising the issue of the very exaggerated ideas that many people, not only newbie investors, have about the likely returns from equity investment.

People too often rely on the numbers from the Barclays Equity Gilt study without any understanding of how the numbers are calculated. It's an Issue that SnowMan and I have been banging on about for quite a while.

Nor is the problem solely with investors. I recently asked three IFAs, including one of the better ones, and not one of them understood how the claimed return on cash was calculated. Clearly a reasonable understanding of the data being used to make investment decisions is a minimum requirement for making sensible decisions. Just clutching on to what we'd like to be true isn't very helpful.

Another issue is how so many investors are determined to rely on history and underestimate just unpredictable the future will always be.

I've yet to read the entire book but will be doing so.

srcandas

Monkeywithapin wrote: »

Many thanks to all of you ....

And many many thanks to you. I had plans for this Saturday but spent most of it reading your book - from monkey to cover - and what a good investment of time it has turned out to be :beer:

It put facts to suspicions, has increased my armoury, been an enjoyable read, and raised lots of questions (as any good book should ) . I'll certainly refer back to it and look forward to any updates.

Just one thought - I do feel you could have given a mention to the buzz and enjoyment many get from playing the market. When I do retire I look forward to having the time to enjoy being a hobbyist investor. And if the changes you propose towards the end of the book come about then it will be even more enjoyable.

Well enough; I need to hop down the pet shop and see if they have any dart throwing monkeys

gadgetmind

Monkeywithapin wrote: »

Many thanks to all of you who replied on this subject. I'll quote you on that in v2 of the book!

These two links may help.

http://monevator.com/income-units-versus-accumulation-units-difference/

http://monevator.com/income-tax-on-accumulation-unit/

Accumulation funds make it *very* hard to track dividends versus capital gains to ensure you pay tax correctly so I would never hold such funds unwrapped.

gadgetmind

BTW, I registered to download the book but didn't get an email.