Obsessed with investments?

ColdIron

teepee83 wrote: »

I really like this approach, this might feed my tinkering habit by adjusting monthly contributions rather than whole funds.

It's a good approach that you can combine with your asset allocation. If you have fixed targets by % for each fund (which you should anyway) you can adjust your monthly contributions to be paid into the funds that have drifted below your target % i.e. the cheapest ones. Gives you something to do and re-balances automatically

System

Just need to sort my portfolio now!
thanks for all the advice!

sabretoothtigger

redbuzzard wrote: »

Human nature being what it is, we tend to sell the funds that have performed badly (i.e. are cheap) and buy the funds that have performed well (i.e. are dear) thus achieving the opposite of a profitable trading strategy, which would be to buy cheap and sell dear
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I got to call this one. Buying into strong funds or 'dear' might be the best strategy.
I think we are talking timeframes here.

Is it strong for a month, a year or a decade. If you overpay in one year then lose even half your money (ie. your buy timing was awful) but this fund grows over a decade then you still chose well.

The bad strategy is to actually favour weakness. I know this is definetly true of shares, like HMV was cheap in theory they had money and assets but really their share growth was shot through

Regular buying works not sure about selling or rebalancing so much. In 2008 that worked great, I stuck with a fund that almost halved and it doubled again and I had got more every month. price got bad but didnt see the companies underneath overwhelmed by debt or an 'extinct' business model