ISA Millionaires

Lakeuk

gadgetmind wrote: »

I've always been big on tech but never really "got" Pace. Perhaps that's because I worked with them a lot, but I've also worked with the other two ...

I watched Pace in 2002 when it was around 15p and Freeview was just starting out, thought they had great technology at the time and the only competition to them in freeview at the time were the cheap bush/alba brands, but I didn't take a punt in the end as I thought they were selling their freeview decoders to expensively and the high street retailers could never get stock in from Pace. I thought they'd missed an opportunity to get a good market share of freeview so stayed clear, they're turned it around though a few years later in satellite decoders.

gadgetmind

They were always too dis intermediation prone for my liking.

barak

atush wrote: »

you don't need an advisor for buying lifestyling funds, or a spread of low cost trackers.

Long term S&S PEP/ISA holders should have done well, but could not possibly have become millionaires by investing in trackers! [No secret that I favour active management ]

gadgetmind

Trackers as they exist nowadays haven't been around for most of the time we've had PEPs and ISAs. However, given the high fees you used to have to endure for a lot of active funds (5% bid/offer spread, 2.5% pa in fees) it's a good job that the 80s and 90s were kind to investors, and that post-millennium we've increasingly been able to at least avoid those fees.

lisyloo

you don't need an advisor for buying lifestyling funds, or a spread of low cost trackers.

It's not like going to Morrisons and buying crisps.
How does the unsophisticated investor know which ones to buy and in what proprtions and from whom?
It requires some knowkedge and research.

I would suggest again that it's not that easy for the unsophisticated invetor to buy these without advice or knowledge.

Of course they could choose to get the knowledge if they wanted and it suited their appetite for risk and that's what they wanted to do in their spare time.
However that still doesn't apply to everyone.

I don't think they should complain but I think you need to accept that there are people out there without the capability to understand, interest or inclination

I'm not trying to defend any course of action, but I am saying that is the way the world is.

Personally I have the intelligence and appetite but not the inclination, so I pay people to do the things I don't want to do.
I have advisors who charge 0.5% per annum and I'm very pleased with their service, however that won't work for everyone.
You can't unfortunately walk into an advisor and get a good low charging advisor who will advise you in your best interests. Unfortunately the unwary just get ripped off which is a shame, so even for finding someone else to do it for you requires a certain amount of research and knowledge.

So no, I don't think you can spend a few minutes on the web and pick a selection of funds as you would pick your groceries.
I'm sure you'd agree it's not that easy.

gadgetmind

lisyloo wrote: »

So no, I don't think you can spend a few minutes on the web and pick a selection of funds as you would pick your groceries.
I'm sure you'd agree it's not tht easy.

But how do you know what groceries to buy? And after buying them, how do you know how to fillet the fish, how to prepare the vegetables, what kind of sauce to make, and how to cook everything?

Surely you didn't learn all of that from just a few minutes on the web?

If you don't want to pay extra for someone else to do the hard work, yes you need to pay the extra and get a ready meal. Or put in the time to learn how to cook and how to invest, save yourself a fortune, and potentially get better results.

I say "potentially" as you can make a mess of things, particularly in the kitchen!

atush

It is probably easier to pick a wide spread range of trackers than it is to source, buy and prepare ingredients for complicated or labor intensive dishes such as hand made ravioli, dim sum, Pho etc.

Stock for Pho can take a day or more to make lol. Imagine how much research you could do into portfolio building.investing during that time?

Rollinghome

gadgetmind wrote: »

Trackers as they exist nowadays haven't been around for most of the time we've had PEPs and ISAs. However, given the high fees you used to have to endure for a lot of active funds (5% bid/offer spread, 2.5% pa in fees) it's a good job that the 80s and 90s were kind to investors, and that post-millennium we've increasingly been able to at least avoid those fees.

PEPs were introduced in 1986 and as I remember it wasn't too long after that L&G introduced their low cost trackers with a barrage of newspaper advertising.

I held their both their European Index launched in 1989 and their UK Index launched in 1992 from that time. The big cost advantage was the low AMC (then 0.5% for the UK fund and a fraction more for the European) and no initial charge but also that there was no additional charge for holding them in a PEP.

As you say, in contrast it was then not possible to avoid a 5-7% initial charge on most other UTs and brokers made a hefty charge for holding shares including ITs inside a PEP.

If we mean holding a million in an ISA for couple rather than an individual then I wouldn't think that would be too difficult if full advantage was taken of every allowance including TESSAs, PEPs, and single company PEPs. We aren't far off even though we didn't always take up our full allowance, usually because the costs then sometimes appeared to make the advantage marginal.

gadgetmind

Rollinghome wrote: »

PEPs were introduced in 1986 and as I remember it wasn't too long after that L&G introduced their low cost trackers with a barrage of newspaper advertising.

What did they count as "low cost" back then?

I think they were also mostly FTSE trackers. I've always gone for a fairly decent global spread with plenty of US, Pacific and EM.

Rollinghome

gadgetmind wrote: »

What did they count as "low cost" back then?

I think they were also mostly FTSE trackers. I've always gone for a fairly decent global spread with plenty of US, Pacific and EM.

The L&G UK Index, which is an All Share tracker had an AMC of just 0.5% and no initial charge (though there was a small bid to offer spread of about 0.2% in the early days). Their European Index had an AMC of 0.65%. So not too different to what they are now.

They also offered several other trackers including a Japan index from 1989, an Asia ex-Japan, and a US Index from 1992. I didn't buy other than the FTSE all-share and European trackers (used ITs for other areas) but I believe the others were about the same cost as the European one.

I always bought directly from L&G inside a PEP for no additional charge. They were even more of a bargain then, when 5% plus initial charges for managed funds were charged in full, than they are today but of course were usually kept well away from the punters by "advisers".