Managed fund selection advice!

quentinfarquar

I set up an Isa with Fidelity a couple of weeks ago (through cavendish). I am pleased with the selection so far and I have currently made back all the fee's and am £38 up.

Current holdings are:

JPM Emerging Markets £250
JPM Natural resources £500
Jupiter Ecology £250
Jupiter UK Growth £500

Just wondered what sort of investment type would be best next. Been watching AXA Framlington Japan and someone mentioned Fidelity money builder uk index.

Any thoughts?, at this stage I am up for a high/medium risk, but think in funds I can get a good balance of risk.

dunstonh

Any thoughts?, at this stage I am up for a high/medium risk, but think in funds I can get a good balance of risk.

A this stage your holdings are at weighted towards high/speculative. Only the Jupiter UK Growth is bringing you down with a 7/10 risk (cash = 1 as the starting point). The others are 9 and 10.

You appear to be understating the risks.

quentinfarquar

Should I not be taking this level of risk thou, I have cash Isa's which are safe and money in savings if I need some quick. Plus the benifit of doing this on my own and online I that I can move and responed quickly.

I have freinds with Isa's that are managed though IFA's and they seem to see no growth after all the fee's.

What type of fund would bring the risk down a bit further then?

pamaris

I reckon that the experts will tell you that you should only take on that level of risk if you are comfortable with it; if you can sleep at night. How much time do you have and how much of a nosedive can you endure your holdings to take before you freak out and bail?

I am not an expert though; that's just what I've learned from reading the posts of the experts.

quentinfarquar

At the level I am at, I'd be happy to lose half, but would stick it out longterm as I arn't planning to use this cash for at least 30 years.

dunstonh

Should I not be taking this level of risk thou, I have cash Isa's which are safe and money in savings if I need some quick. Plus the benifit of doing this on my own and online I that I can move and responed quickly.

Risk is a personal thing. What you do should be right for your risk profile. If you are happy facing a potential loss of 50-70% in a given 12 months on the equity content, then its fine. (which is the loss potential of yours)

I have freinds with Isa's that are managed though IFA's and they seem to see no growth after all the fee's.

They are telling porkies then or are including the period of the stockmarket crash or invested the wrong side of a correction. Crashes/corrections will impact on you regardless of how you buy your investments.

Also, if it is more recent, then low risk areas haven't had a good 12 months. North American funds have almost been at a standstill due to exchange rates and Japan has been in decline.

The average IFA commission is 1.8% on new business (published by the FSA and updated Dec 06). The annual management charges are the same. So, that one off 1.8% is the only difference. People that invested in March this year on a 1% initial charge (which is what I charge so I can only supply data on that basis) are already 2-3% up.

The funds you are using are the same funds the IFAs will use. The only difference is the initial charge.

The bulk of investment returns are based on where you invest. The charges actually play a very small part of the overall return.

What type of fund would bring the risk down a bit further then?

fixed interest, commercial property, UK equity income.

kedj

quentinfarquar wrote: »

I set up an Isa with Fidelity a couple of weeks ago (through cavendish). I am pleased with the selection so far and I have currently made back all the fee's and am £38 up.

I wouldnt base anything on the on performance over a couple of weeks! The markets are constantly fluctuating. If you log back in next month and find you are £100 down will you be disappointed??

quentinfarquar

"I wouldnt base anything on the on performance over a couple of weeks! The markets are constantly fluctuating. If you log back in next month and find you are £100 down will you be disappointed??"

I think anyone would be disappointed at losing money, but if you want longterm growth that out strips cash savings and you want to have a few quid in later life you have to take a risk, otherwise everyone would do it!!

kedj

True. But your investments will probably be up and down quite a lot in between. Its best not to be too hung-up on short-term performance.

debbie42

kedj wrote: »

Its best not to be too hung-up on short-term performance.

I couldn't agree more, though I confess to checking my portfolio far too often.

Has anyone seen this graph before? Although it's funny, I'm all too aware that it does describe the psychology of (some) "investors" all too well. I have it pinned on my board just to remind me that it could be me if I panicked unnecessarily!

http://www.retro.ms11.net/InvestorMind.gif

quentinfarquar

what about putting some in Investico perpetual income, would that help lower my risk profile?