JP Morgan Natural Resources

sorcerer

Just to clarifty I want to start to de-risk is 12 years time, then give myself a further 5 years to sell everything. So at 17 years I won't to be totally out of equities and mainly in cash. At least that's the plan. The 100% was before inflation by the way.

JohnRo

sorcerer wrote: »

I have about 12 years left before I wan't to de-risk and become more cash driven. So I have to consider is 12 years long enough for this fund not only to return to profit but also make me the 100% profit target I want to achieve. It certainly is a difficult decision to make.

That's a big ask from any investment though, isn't it?

You would require an average annual growth of around 10% over the whole 12 years given a nominal 4% inflation adjustment and no tax to pay.

My own personal requirement for investment is to beat inflation and more importantly, high street savings rates. I have tried to manage my expectations and avoid reacting badly to certain situations and part of that process for me has been to employ a financial adviser to manage fund allocations. I view investing as preserving wealth rather than banking on getting rich off the back of it.

If any of my funds did double in value due to market movement then I'd be on the phone and looking at the best way to realise a very large chunk of that gain pronto.

srcandas

Sorcerer first I'd say good on you for having a good high target. You may not make it but I feel if your target is low you for sure will not make a high one

The JP fund has a similar performance profile to my preference Oceanic Australian Natural Resources GBP.

I have just jumped in and aim to top up over the next 12 months. Then await a recovery. And I'm reinforcing that with a number of high risk se asia funds. So - for my two pennies worth - I'd hang on in there. If you look at the past volatility you might well expect to see a good opportunity to bail out with a profit in the next 5 years.

Also if you look at the profiles over the last 6 years you might say that 12 years is an enormous unpredictable timeframe. In 6 years there have been large ups and downs

But good luck and above all enjoy the ride :beer:

sabretoothtigger

It's just a reminder that investing is, to a very large extent and varying degrees, gambling on future outcomes.

Investing in a working business is not gambling, its more like a loan of money which they should return with profits.

Gambling would be naked futures dealing, hoping the price of corn or a stock might be at a certain price in future. Also you receive no earnings and have no rights over the company until you actually claim the option to buy a real share. Hence thats not investing its speculation or gambling.

I like the idea of to speculate while investing, hold some and sell some when it goes up. Buy it back when it goes down again.
All this euro debt trouble has us like a rollercoaster, not impossible to get lucky and get the dips right. I'd say its still not gambling unless I cannot afford to own outright, futures are usually done on borrowed money and they are doomed if we go down in price even if the company is fine.

Most supermarkets marking down a good is seen as great for customers. But not for stocks, not for houses, not for debt or government bonds. Hence inflation is the subsidy of government by the people who hold and earn plain currency. If you ever meet a real Richie Rich its almost always through capital gain of asset value - and they have to sell before inflation attacks customers of that business so that is gambling I guess

Most shares dealt are done with borrowed money, they call it hot money. If interest rates ever go up it will cause alot of selling of these borrowed share holdings. They cannot afford 10% interest, neither can anybody actually. Rollercoaster got no brakes

JohnRo

sabretoothtigger wrote: »

Investing in a working business is not gambling, its more like a loan of money which they should return with profits.

Unless the investment is secured by a guarantee you are gambling on future outcomes, there is nothing inaccurate about calling investment in funds or other vehicles derived from stock prices, from which you hope to gain, a gamble. There are of course varying degrees of risk.

sabretoothtigger

I think the main difference on anything is the intention by owning. Buying a house is as sensible as it gets except when you overpay hoping to make money by selling a year later. A house is obviously a twenty year purchase and it might take that long just to break even

Now we got house bears! saying owning your own house is a stupid idea. Its not if its done right

So yea if you buy a share price its a gamble hoping you can sell for more. But you own an investment not a bet slip and it can take 10 years to pay properly with dividends or whatever.

Unless the investment is secured by a guarantee you are gambling on future outcomes

Buffet I think says the way to buy a share is as if you are going to own the entire company entirely yourself.
So he is basically saying, forget the market gossip because ultimately this is a company that has to produce profits.
I dont exactly agree about future, because a share is ownership of an asset today. IF you bought all the shares, you can close the company and sell it all. Ther would be no future business yet people who do this might make a profit if the share were that cheap, thats usually when I want to buy my piddling little 100 shares and thats not a gamble.

People can say who the **** cares but dont forget large parts of the world ban gambling, speculation and money lending.
If a company wants a wider access to money markets it has to be seen as dependable regular business, predictable in its returns

investment is secured by a guarantee

You own the assets of the company. So it is a secured contract. Compare that to cash which has no definition and its less risky if anything in absolute terms.
The reason for risk would be business taking on debt which out ranks shares, then it starts being a big gamble and banks are the most obvious.
The future aspect is most shares trade above their current cash or asset value, hoping for future earnings. Its not always the case, I bought FTSE100 shares at their bank balance value

sorcerer

I realise it might appear that 120% growth over 12 years is a big ask, but this is based on the funds pervious performance and the higher risk the fund takes. So for higher risk I expect higher gain. I would not expect this for example from a fund in corp. bonds or gilts (at least not normally).

jamesd

You do know that the fund manager changed not that long ago and that the reduced performance roughly coincided with that, though I think largely coincidentally. natural resources funds do well or badly based on expectations of global growth and economic recovery. Not much expectation of that at the moment so it's been a bad time for such funds. Which just means that regular buying now is likely to pay off in a few years. Whether you trust the new manager of this fund or want a different fund is a different question.

JohnRo

sorcerer wrote: »

I realise it might appear that 120% growth over 12 years is a big ask, but this is based on the funds pervious performance and the higher risk the fund takes. So for higher risk I expect higher gain. I would not expect this for example from a fund in corp. bonds or gilts (at least not normally).

There is the rub, what is normal and was there ever such a thing?

The world is changing all the time and it won't be going back to how it has been in the past any time soon if ever, what has been is done and gone. In the words of the ample investment warnings given, the past is no guide to the future or words similar.

All you can hope is that the funds adapt and grow with the changing world around us.I'm just being realistic, looking at past performance plots alone and expecting that to be repeated is a tad optimistic in my view.

jamesd wrote: »

You do know that the fund manager changed not that long ago and that the reduced performance roughly coincided with that, though I think largely coincidentally. natural resources funds do well or badly based on expectations of global growth and economic recovery. Not much expectation of that at the moment so it's been a bad time for such funds. Which just means that regular buying now is likely to pay off in a few years. Whether you trust the new manager of this fund or want a different fund is a different question.

There are several natural resource funds that share a remarkably similar performance plot to JPM natural resources, as you might expect. Even the Blackrock Gold and general mentioned up thread is remarkably similar, albeit with a higher return over 3 years from large gains made in late 2008 and early 2009.

sorcerer

I realise off course that the past is not a guide to the future, but unfortently their is a little else to go on when deciding what the best fund is, other than your guess at what the future might be like. Between Jan 09 and Jan 11 the fund returned over 110%. And over the longer term 500%. So I thought 100% sounds like a reasonable result to aim for over 12 years. But like you said, nobody really knows what will happen. If I did, I would be a rich man :-)