A tale of 4 IFA's... (subtitle - why is it so hard?)

fairleads

gadgetmind wrote: »

Excellent, so now please give references to the data sources you used and show your workings. All we ask is that you repeat this calculation such that we can see it and provide references.

I was invested during the 80s and 90s, and it was like a rocket sled. Since 2000 some asset classes and territories have done well, so I've continued to thrash RPI and cash interest, but not in quite the same way.

http://group.barclays.com/corporates-and-institutions/research/equity-gilt-study

There may be a fee though

fairleads

jem16 wrote: »

Please provide your evidence to support this claim.

http://group.barclays.com/corporates-and-institutions/research/equity-gilt-study



This seems to be your stock answer to anyone who disagrees with you. It's rather boring.

Then don't read my posts

fairleads

dunstonh wrote: »

I cannot get any data to compare that. What is your evidence?

I just pulled data using an old UK Equity fund from 1985 to date and compared it with 5% p.a. compound interest. The fund returned 725.44%. 5% interest returned 291.96% (source FE Analytics).

You would have needed interest at 8% p.a. every single year for that to be beaten.

Comparing cash Vs equities using average returns is faulty. Cash always gives positive returns whereas equities don't. So if we have massive equity out performance in the early years followed by less generous returns later, then the average return flatters to deceive.

jem16

fairleads wrote: »

http://group.barclays.com/corporates-and-institutions/research/equity-gilt-study

There may be a fee though

Now you have given the reference, please show your workings as to exactly how you have calculated the return for the FTSE 100 tracker and cash from 1985 to 2012.

fairleads wrote: »

Comparing cash Vs equities using average returns is faulty. Cash always gives positive returns whereas equities don't. So if we have massive equity out performance in the early years followed by less generous returns later, then the average return flatters to deceive.

What matters is the total return. Are you saying that the total return from cash would have beaten the total return from a FTSE 100 tracker from 1985 till 2012 or are you not?

fairleads

jem16 wrote: »

Now you have given the reference, please show your workings as to exactly how you have calculated the return for the FTSE 100 tracker and cash from 1985 to 2012.



What matters is the total return. Are you saying that the total return from cash would have beaten the total return from a FTSE 100 tracker from 1985 till 2012 or are you not?

What i'm saying is that an investment into cash over the period in question would have given a better end result than a similar amount invested in the Ftse 100 tracker when held with in a pension fund.

Aegis

fairleads wrote: »

http://group.barclays.com/corporates-and-institutions/research/equity-gilt-study

There may be a fee though

According to the previous year's study, which is available for free, the real return of investing in equities was 5.6% average per annum from the end of 1985 to the end of 2011, resulting in a holding period return of 312% ahead of inflation.

In December 1985, CPI stood at 107.600, while in December 2011 the level was 224.939, a rise of 109%.

In nominal terms, therefore, the equity investment would have increased by about 652%, representing a nominal annualised return of about 8.1%. Let's assume 6.5% after charges are accounted for. (EDIT: incidentally, I think this would be wildly exaggerated if you were invested into good value trackers over that timescale, but this should make a reasonable point)

I'd be really surprised if you could find cash accounts consistently paying anywhere near that much over that period.

GhIFA

fairleads wrote: »

What i'm saying is that an investment into cash over the period in question would have given a better end result than a similar amount invested in the Ftse 100 tracker when held with in a pension fund.

Yet others have provided figures that would appear to disprove this assertion, whilst you (depsite being asked) can't/won't.

So, please could you post the figures to show us how this works.

Daniel_Elkington

Proxy wrote: »

Not in fund management, if that is your point...

Not at all, we use an independent firm who build asset allocations for a living. Most of these individuals have a Phd or equivalent in their specific fields. That wasn't intended to be insulting, just that as in any industry you have a lot of people working in a field with a standard level of qualification and a small group with a higher level of qualification. It is these with the higher level that tend to find themselves in the more high-profile and sought-after positions.

re; acutarial software: I admit I am guilty of both dramatising a serious issue and a reductive fallacy and apologise for both. However, if being an actuary and building asset allocations was easy then we'd all be doing it.

Regarding FTSE 100 returns, I think others have proved wrong the argument that cash is better than FTSE over the past 20-30 years, have presented that argument with a good degree of eloquence. This is a startling claim, and before shouting inaccuracies or, worse, lies from the rooftop; I would suggest having the evidence to back up this claim.

gadgetmind

fairleads wrote: »

What i'm saying is...

Yes, but you're then failing to back this up with any evidence, and meanwhile the evidence strongly suggesting that your statement is way beyond wrong continues to stack up against you.

I ask again, what is the factual basis behind your statement? How much contrary evidence would it take for you to start to question your current view?

RedVulpine

fairleads wrote: »

So please enlighten me. On the other hand don't bother, you're clearly either an IFA or have a vested interest in the financial services industry

My interest is my own portfolio. I'd measure out any deserved crtiscism or praise for the fiancial services industry wherever warranted. Does everyone who corrects a mistake have a vested interest? I'll remember to keep my guard up when I correct the next person who thinks that Sydney is the capital of Australia. I may be accused of being a jealous Melburnian :eek:

If you provide the actual figures you are using then one of two positive things will happen:

1. Someone here might actually be able to point out what you are doing wrong and help you not to make the same mistake in future.

2. You will prove your point and help educate others on the forum in the errors they have made

I certainly have the humility to be proved wrong. Do you?