Investment Bug

sabretoothtigger

lose 80% tomorrow

depends how we define lose. Judging by price sure but assets I would hope not, when it comes to possible international wars you are taking high risks.

If its not long term, take the profits. Invest gradually in something where -80% would make you happy because you still have alot to put in and a cheap price is good

redbuzzard

Dear Flockers,

I've just read the thread so far.

Unless I've overlooked it, nobody has pointed out what distinguishes the Vanguard funds from the others mentioned here, which is that they are PASSIVE.

That is also the reason they are cheap (despite your aversion to the dilution levy and the platform fees, they are. HL's platform fee makes them unattractive for small holdings, but that's not a fund charge).

Nobody is sitting there researching and picking stocks for the Vanguard funds, day after day. They are index funds, and funds of index funds. They track different markets, but the idea is that if you hold them you get the market's return, less (low) charges.

This doesn't intuitively sound sensible. Surely it must be more sensible to have some people with big foreheads and degrees researching the markets and buying only the choicest stocks?

Up to a point. Around three quarters of actively managed funds will fail to match their benchmark index, if there is one. The "why" is interesting and if you took the earlier advice, which somebody must have given, to read Smarter Investing you will know why. I have to go and make the tea in a minute.

The best holding I have had since I started a SIPP with a lump sum in 2009 is a FTSE all share index fund. All it does is slavishly follow the basket of all shares in FTSE - it performs, to all intents and purposes, as if it is invested in all the shares on the FTSE in proportion to their individual market capitalizations. On a total return basis (dividends are reinvested in the accumulation class) it is up 85%.

Most proper (long term) investors would be happy to get the market return, or close to it. Most fund managers don't manage it, after charges.

The second point to mention, which is not rocket surgery but needs to be said to anybody who has only ever invested in a rising market, is that "a rising tide lifts all boats". I'm sure you've heard that one. You (more importantly the fund managers) didn't have to be clever to make money in 2013 so far.

One last point. Reading between the lines of your posts in this thread, you have been evaluating relative attractiveness of funds by comparing past performance. When you are comparing funds with similar objectives and strategy, past performance is a VERY POOR guide to future relative performance. It really is. Again refer to Smarter Investing for more detail on the why - or google "regression to the mean", which will also explain why, where there has been a spate of accidents, you nearly always have fewer accidents afterwards whether you site a speed camera there or not.

I am not saying you have made a grave error with your choices BTW.

All the best.

bowlhead99

A_Flock_Of_Sheep wrote: »

Maybe but I am learning. That said my Turkey Fund has gained just shy of £700 in one calendar month so can't grumble at that. The Japan Fund had grown £550 approx so can't grumble at that either.

I don't know how significant £700 or £550 in a month is, as it's relative to what you invest. If it's significant, a standard approach would be to rebalance the portfolio back into your target allocations.

Clearly instead you could just "monitor it closely", as no doubt you are, but presumably if it drops a couple of percent on monday you won't sell it, nor if it drops 4% on tuesday if it goes back up 1% on wednesday. Then when you look at it on Friday morning and see it closed down 12% on Thursday, you can put your order in, which may be executed on Monday which is down a further 20% for an overall 37% loss. Monitoring something closely does not eliminate risk, particularly when it's something other than an exchange traded fund or IT that can be dealt on in seconds.

So £1200+ in one calendar month can't be sneezed at - some people work all month 40 hours a week for that.

I would certainly not turn my nose up at a month's wages for free with no risk. Of course, that's not what this is. And someone who only earned £1200 per month would probably not be so overexposed to equities that they could win or lose a month's wages over the course of a month on one single element of their portfolio. So it's a bit of an irrelevance.

grizzly1911

Just plugging those funds into trustnet (£1k each invested 1-3-13)apart from Turkey which it doesn't have data for, that gives a risk score of 69 (comparative to UK equity income funds), adding Turkey, high risk, would push that higher. (Japan at 151).

Without including Turkey it projects a total return over 1 year of 38%.

The average return across equities is typically accepted as 8 - 9%?

If something seems too good to be true.....

Think more balance, think at 8- 9% return and that saved 1% in TER makes a big difference long term.

Good luck while it lasts BTW not saying there is anything intrinsically wrong with funds themselves.

bigfreddiel

A_Flock_Of_Sheep wrote: »

I have just searched for Vanguard on H&L

if we're talking about costs and vanguard being very cost effective - am i not right in saying your six funds cost £2 each/month in platform fees?

so thats £144 a year before any fund expenses

hopefully you have a few tens of k invested so itss quite small percentage

and your other post about 'earning' £1200 in a month - it could just as easily have been a loss of £1200 - but no one's been a loser in the last 12+ months - my very simpler equity/bond portfolio put on £1300 in the last 4 days and it has a ter of about 0.3% with no platform fee (it's built with etf's which also attract no stamp duty or dilution fee on purchase)

cheers

fj

A_Flock_Of_Sheep

But all funds and shares and investments have risk. I've looked at all the vanguard ones and they all fluctuate. Please link me to a an investment on HL that has no fluctuations and a straight line of growth of say 15% a year with income twice a year thrown in. I can't find one. If the market crashes so would all the vanguards and trackers and schroders and invescos etc etc.

A_Flock_Of_Sheep

bigfreddiel wrote: »

if we're talking about costs and vanguard being very cost effective - am i not right in saying your six funds cost £2 each/month in platform fees?

so thats £144 a year before any fund expenses

hopefully you have a few tens of k invested so itss quite small percentage

and your other post about 'earning' £1200 in a month - it could just as easily have been a loss of £1200 - but no one's been a loser in the last 12+ months - my very simpler equity/bond portfolio put on £1300 in the last 4 days and it has a ter of about 0.3% with no platform fee (it's built with etf's which also attract no stamp duty or dilution fee on purchase)

cheers

fj

The funds I hold have no platform fee. They probably do in the annual fee somewhere. On IP-HI for example the annual fee is 1.25%

My total initial holding was about £17k split amongst funds. In April there were some losses and it was on the downside for about 10 days or so I think but is now on the upside. My portfolio is not made of many 10s of thousands of pounds and us under 20k at present.

So in IP High Income I have about 5k - there was no entry fee and an ongoing annual fee of 1.25%

jem16

A_Flock_Of_Sheep wrote: »

The funds I hold have no platform fee. They probably do in the annual fee somewhere. On IP-HI for example the annual fee is 1.25%

As the clean version is 0.75% you are paying an extra 0.5% to HL. Part of that is the platform fee and part is HL's cut. As HL also own the platform they get all of that.

A_Flock_Of_Sheep

jem16 wrote: »

As the clean version is 0.75% you are paying an extra 0.5% to HL. Part of that is the platform fee and part is HL's cut. As HL also own the platform they get all of that.

The website and service, staff wages etc has to be funded somehow I guess.

I find the HL website to be user friendly and comprehensive.

jem16

A_Flock_Of_Sheep wrote: »

The website and service, staff wages etc has to be funded somehow I guess.

It does, yes. However remember that this will have to change as currently HL is not RDR (or more importantly platform review) compliant. Other platforms may well be cheaper.